PORTUGAL LAW AND PRACTICE Contributed by: João Gonçalo Galvão, Carolina Cardoso Alves and Miguel Paquete, CS’Associados
• prohibiting the performance of structural changes that may impact the property’s integrity; and • the requirement that the property is reinstated to its original status at the end of the lease. 6.15 Specific Regulations By design, the legal framework provides stronger tenant protections for residential leases, where - as it offers more flexibility for commercial leases. As described in 6.2 Types of Commercial Lease , there are no subtypes or distinct regulations within the commercial lease category. Although commercial lease agreements follow a shared framework, the parties fine-tune the respective terms and conditions depending on the specific category of leased asset and their operational requirements and concerns. COVID-19 legislation addressed asset classes separately, with residential leases benefiting from more extensive protections (including rent moratoriums and suspension of termination by landlords of the foreclosure of mortgages or of eviction processes). Commercial leases also benefited from protection, mainly in respect of suspension of termination by landlords and deferral of rent payments. 6.16 Effect of the Tenant’s Insolvency The tenant’s declaration of insolvency does not automatically suspend a lease agreement. How - ever, the insolvency practitioner has the right to terminate the lease with a 60-day prior notice, unless a shorter notice period applies. After the tenant’s insolvency declaration, the landlord cannot request termination of the lease based either on non-payment of rent for the period before the insolvency declaration or on grounds of deterioration of the tenant’s financial situation.
Portuguese law protects leased premises used by an insolvent debtor for personal and family life; in such a case, the insolvency practitioner is not allowed to terminate the lease, but unpaid rent due 60 days after the declaration of insol - vency may be considered a debt of the insolvent estate. In case of eviction due to unpaid rents, the landlord can claim compensation of up to a quarter of the rent. If there are guarantors under the lease agree - ment, they are also liable for payment of due rents. 6.17 Right to Occupy After Termination or Expiry of a Lease The general rule is that upon lease expiry the tenant is required to immediately hand over the premises, unless otherwise resulting from man - datory law or agreed by the parties. This rule is subject to deviations in cases of expiry of the lease other than due to the lapsing of the agreed term; for example, by default in a scenario of termination by the landlord, the tenant benefits from a one-month period within which to hand over the premises, whereas in situations of end of the lease due to expropriation or destruc - tion of the property, the handover can only be claimed after six months. If the leased premises are not handed over at the expiry of the lease, unless the parties agree differently, the landlord is entitled to a compen - sation equal to rent value corresponding to the handover delay, this amount being doubled upon the tenant being notified to comply. 6.18 Right to Assign a Leasehold Interest Assignment and Sublease As a general rule, the assignment of the tenant’s contractual position or total or partial sublease
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