Lease Agreements in Portugal: Legal Principles and Practical Implications

Tomás Melo Ribeiro | Lawyer

Leasing in Portugal is a flexible and effective solution for both individuals seeking housing and businesses in need of commercial or industrial premises. The Portuguese rental market is well regulated and transparent, allowing the parties to define contractual terms with a high degree of freedom while maintaining a fair balance of rights and obligations between landlords and tenants. This combination of legal structure and adaptability makes leasing a practical and secure option, suitable for the diverse needs of the Portuguese real estate market.

In Portugal, lease agreements are primarily governed by the Civil Code and the Urban Lease Regime (NRAU), which establish the legal framework for residential and non-residential leases. These regimes seek to combine contractual freedom with the protection of each party’s legitimate interests, ensuring legal certainty and stability in the rental market.

Types of Leases

Lease agreements may serve residential or non-residential purposes. Residential leases are primarily intended for habitation, while non-residential leases include commercial, industrial, professional, or other non-housing uses. A particularly versatile arrangement is the lease with an option to purchase, which allows tenants to experience the property before committing to a purchase, postpone investment while arranging financing, and secure a fixed purchase price that protects against future market fluctuations. For landlords, this structure ensures continuous rental income during the option period, the potential receipt of a non-refundable option premium, and the opportunity for a direct future sale without intermediaries.

Essential Contractual Elements

All lease agreements must include certain mandatory clauses, such as the identification of the parties, a detailed description of the property, the purpose of the lease, the contract duration, and the rent amount with payment terms. Beyond these essentials, it is advisable to include clauses defining mechanisms for rent updates, the allocation of maintenance and repair responsibilities, expenses borne by the tenant, termination and renewal rules, and any restrictions on subletting or assignment. These provisions help prevent misunderstandings and potential disputes, ensuring transparency and legal certainty for both parties.

Rights and Obligations

Lease agreements in Portugal generally establish a balanced set of obligations for landlords and tenants to ensure proper use, maintenance, and preservation of the property, thereby avoiding conflicts. Landlords must deliver the property in good condition and suitable for its intended purpose, ensuring that it complies with all legal safety, hygiene, and habitability standards. They are also responsible for carrying out any structural or major repairs when necessary and for maintaining essential systems such as electricity, water, heating, and sanitation so that the property remains functional throughout the lease. Landlords must respect the tenant’s right to quiet enjoyment, allowing the property to be used without undue interference, and must provide all documentation required for legal or tax purposes, including proof of property tax payment and relevant technical certificates.

Tenants must pay rent punctually and cover all additional charges agreed in the lease, such as condominium fees or utilities. They must use the property exclusively for the purpose established in the agreement and maintain it in good condition, carrying out minor repairs and ensuring that any deterioration remains within normal wear and tear. Tenants may not sublet or assign the lease without the landlord’s consent and must allow reasonable access to the property for inspections or necessary repairs, with prior notice. These obligations are not mere formalities. They ensure that both parties understand and respect their respective duties, fostering cooperation, preventing conflicts, and creating a stable and legally secure leasing relationship in Portugal.

Duration and Termination

Lease agreements in Portugal may be concluded for a fixed term or, less commonly, for an indefinite period. In fixed-term contracts, tenants may terminate the lease once one third of the initial or renewed period has elapsed, provided that prior written notice is given. When the lease duration is equal to or longer than one year, tenants must give at least 120 days’ notice, while leases shorter than one year require a minimum of 60 days’ notice. Both parties may also oppose automatic renewal, with notice periods varying according to the contract length.

Landlords must give at least 240 days’ notice for leases of six years or more require at least 240 days’ notice before the end of the term. When the duration is between one and six years, 120 days’ notice is sufficient, and for leases shorter than one year but longer than six months, the required notice is 60 days. For very short-term leases of less than six months, the notice period must correspond to one third of the total lease term. For tenants, the deadlines are generally shorter but follow the same proportional logic: leases lasting six years or more require 120 days’ notice, those between one and six years require 90 days, and leases shorter than one year but longer than six months require 60 days’ notice. In leases lasting less than six months, the notice period must again equal one third of the total term agreed. This legal framework provides balance and predictability to the Portuguese rental market, ensuring that both parties have sufficient time to plan future arrangements while maintaining contractual fairness and stability.

Due Diligence and Tax Considerations

Before signing a lease, thorough due diligence is strongly recommended. This should include confirming ownership or authorization to lease, verifying the legal capacity of the parties, and reviewing relevant property documentation such as the energy certificate, use license, and tax records. It is also advisable to confirm compliance with registration obligations before the Tax Authority, as all leases must be declared for tax purposes. Rental income is subject to taxation under the Portuguese IRS or IRC regimes, depending on whether the landlord is an individual or a company.

Security Deposits and Guarantees

In practice, landlords frequently request a security deposit equivalent to one or two months’ rent. While the law does not impose a specific limit, the amount must remain reasonable and proportionate to the contractual risk. In some cases, landlords may also request additional guarantees, such as a guarantor (fiador) or a bank guarantee, to strengthen payment security and reduce default risk.

Non-Compliance and Enforcement

In situations of non-compliance, such as non-payment of rent, unauthorized use of the property, or breach of contract terms, the landlord may terminate the lease and initiate eviction proceedings. Recent legal reforms have streamlined this process through the national eviction procedure, known as Balcão Nacional do Arrendamento, which allows for a faster and more efficient resolution of cases.


Proper due diligence and careful contract drafting ensure compliance with Portuguese law, prevent disputes, and protect the interests of both landlords and tenants throughout the contractual relationship. A well-structured lease, supported by good legal advice, provides the clarity and confidence necessary for a long-term, secure, and successful tenancy in Portugal.

If you are considering a lease in Portugal and wish to ensure that everything is properly structured, our team at LVP Advogados will be glad to assist you.