PORTUGAL LAW AND PRACTICE Contributed by: João Gonçalo Galvão, Carolina Cardoso Alves and Miguel Paquete, CS’Associados
terms and conditions, limited however by some mandatory rules (as further detailed hereunder). In general, the parties may freely determine the rules applicable to the duration, termination and renewal of leases for commercial purposes. The NRAU general regime applyies if the parties do not expressly regulate differently. The parties may also freely establish rent values and the evolution thereof as well as an intended rent update regime (see 6.5 Rent Variation and Maximum initial term duration of 30 years. In the absence of express stipulation, duration shall be of five years, with no limitations existing regard - ing minimum duration. Renewal Except if stipulated otherwise, agreements shall be automatically renewed for periods of time equal to the initial duration (or five years, if shorter). Maintenance and Repair Unless the parties agree otherwise, the landlord shall be responsible for performing ordinary and extraordinary maintenance and repair works, as well as works required by mandatory law or by the purpose of the lease. However, common practice is for the tenant to be responsible for ordinary maintenance and repair, as well as for works required by the lease purpose. Rents Rents correspond to a periodical payment, and though they may be determined on an annual basis, payment is made in monthly instalments. Unless agreed otherwise, the first rent is due 6.6 Determination of New Rent ). 6.4 Typical Terms of a Lease Duration
with the execution of the agreement and the fol - lowing at the beginning of the month preceding the month to which it refers. The parties may agree on the advance payment of rents corre - sponding to a period not exceeding two months. Termination The parties may freely determine terms for lease termination via break option or objection to renewal. If no express stipulation is made, upon the lapsing of one-third of the initial term, the tenant may terminate it at any time with a 120-day or 60-day prior notice (in case the initial duration, respectively, is equal to or exceeds one year or is lower than one year). Pre-Emption Right The tenant is entitled to a legal pre-emption right in case of sale of a premises leased for more than two years. 6.5 Rent Variation Rent may vary according to pre-negotiated cri - teria, including any rent exemption periods and/ or value adjustment causes or milestones. The parties may also freely establish the intended rent update regime (see 6.6 Determination of New Rent ). 6.6 Determination of New Rent The most widely used rent update criterion – which applies by default – is the official index determined by the National Statistics Institute as published yearly in the official journal and apply - ing to the following year. This index is based on CPI variation (excluding housing) for the past 12 months up to 31 August. The first rent update is capable of enforcement by the landlord one year from commencement of the lease agreement, and the following successively one year as of the previous adjustment.
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