PORTUGAL LAW AND PRACTICE Contributed by: João Gonçalo Galvão, Carolina Cardoso Alves and Miguel Paquete, CS’Associados
is subject to the landlord’s prior consent. Lease agreements may outline conditions for assign - ment or subletting, such as ensuring that the assignee/subtenant meets specific financial or operational criteria, or that the property’s origi - nal use is maintained. Additionally, the original tenant may be required to remain liable for the lease obligations. In respect of subleases, it should be noted that the tenant may not charge subtenants a rent (pro - portionally) higher than its own rent increased by The following do not require landlord consent: • transfer of commercial or industrial undertak - ing or business as a going concern, although, except if otherwise agreed, the landlord is entitled to a pre-emption right regarding such transfer; • temporary assignment of a business; • assignment to an entity that continues to perform in the leased premises the same independent profession/activity. 6.19 Right to Terminate a Lease The general principle is that any party is entitled to terminate a lease agreement if the counter - party commits a breach that, due to its materi - ality or consequences, renders the agreement such that it cannot reasonably be requested to the non-defaulting party to maintain it in force. The NRAU provides a non-exhaustive list of cases of breach that constitute fair grounds for termination of a lease by the landlord, namely non-payment of rents (with a delay of at least three months or four consecutive or non-con - secutive delays within a 12-month period in rent payment exceeding eight days), unauthorised 20% without the landlord’s consent. Transfer of Undertaking and Other
use/sublease by the tenant, unlawful use of the premises, failure to use the property for over one year or breach of health, noise or other regula - tions. The tenant is by law entitled to terminate the agreement if the property has a defect or devel - ops one that endangers the life or health of the tenant or if the tenant is deprived of its use, even if only temporarily, for reasons beyond its con - trol. The parties also retain the possibility of stipulat - ing other specific causes for termination. 6.20 Registration Requirements Lease agreements must be executed in writing, notarial intervention or other authentication for - malities not applying. Leases must be commu - nicated to the tax authorities before the end of the month following their execution, this trigger - ing the landlord’s requirement to pay stamp duty amounting to 10% of the value of one month of rent. Leases of urban properties entered into for an initial term of more than six years are subject to mandatory registration with the LRO in order to be effective vis-à-vis third parties, with tenants bearing the cost of registration unless otherwise agreed. 6.21 Forced Eviction Landlords may resort to the common courts to seek the early termination of a lease due to breach by the tenant and obtain an eviction order so as to reinstate vacant possession of the premises; this is, however, a lengthy pro - cedure that usually averages between one and two years (depending on the courts’ workload and the defence presented by the tenant, par -
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