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Law No. 75-A/2020, of December 30th

Law No. 75-A/2020, of December 30th, proceeds to the seventh amendment to Law no. 1-A/2020, of March 19th, as well as to the third amendment of the exceptional regime for the situations of late payment of rent due under residential and non-residential urban lease agreements, in relation with the Covid-19 pandemic.

Legal Alert no. 140

On December 30th, 2020, Law No. 75-A/2020, was published in the Portuguese Official Gazette, which proceeds to:

a) the seventh amendment to Law no. 1-A/2020, of March 19th, which establishes exceptional and temporary measures in response to the pandemic situation; and
b) the third amendment of the exceptional regime for the situations of late payment of rent due under residential and non-residential urban lease agreements, in relation with the Covid-19 pandemic, set forth by Law no. 4-C/2020, of April 6th.

Thus, and with reference to the aforementioned amendment to Law no. 1-A/2020, it is extended until June 30th, 2021, and regarding the rents due from October to December 2020 and those due from January to June 2021, the suspension of the following:

a) effects of the landlord’s denunciations of housing and non-housing lease agreements;
b) forfeiture of residential and non-residential lease agreements, unless the tenant does not oppose to the termination;
c) effects of revocation, opposition to renewal of residential and non-residential lease agreements made by the landlord;
d) term indicated in article 1053º of the Civil Code, if the end of that term occurs during the period of time in which said measures are in force; and
e) Foreclosure of a mortgage on a property that is the property of the foreclosed party’s permanent residence.
It is also foreseen that in the case of a non-residential lease agreement related to establishments that, by legal or administrative determination of the Government, were closed from March 2020 and still remain closed on January 1st, 2020, the duration of the respective agreement is extended for a period equal to the duration of the closure measure, applying, during the new agreement period, the suspension of the effects above mentioned.

Finally, it should be noted that the suspension of the effects and the extension of the duration of the agreement will cease if, at any time, the tenant discloses to the landlord that he does not intend to benefit from them or the tenant is late on the payment of the rent due as from the date of reopening of the establishment, unless the regime of deferral is applied.
With regard to the aforementioned amendment to Law no. 4-C/2020, we highlight the following main changes:
In relation to what has already been established about the loss of tenant’s income, the household effort rate to be considered has been reduced to 30%.
Moreover, the Law under analysis creates a particular regime for establishments that, having been closed by legal or administrative determination of the Government in March 2020, remain closed on Januarty 1st, 2021.
Therefore, the tenants in question currently have the possibility to:
a) Defer again the rents due in 2020, with the debt settlement period starting on January 1, 2022 and extending until December 31, 2023, to settle the debt which is to be paid in 24 installments corresponding to the result of the apportionment of the total amount due, paid together with the rent related to the month in question or up to the eight calendar day of each month, in case of non-monthly rent;
b) Request the payment deferral of rents that are due in 2021 and that correspond to the months in which the establishments are closed.
In order for these tenants to benefit from the regime established herein, they must communicate their intention, in written, to the respective landlords within 20 days after the entry in force of Law no. 75-A/2020, of December 30th.
In this case, the landlords of the mentioned tenants may apply for a loan with reduced costs in relation to the due and unpaid rents of 2020 and 2021.
It should be noted that this regime does not apply to establishments that are part of commercial complexes that benefit, for the year of 2021, of a reduction or discount in the remuneration due under the agreement.
Finally, the Law under analysis establishes a non-refundable support for non-housing tenants who, in the year of 2020, suffered a loss in their turnover which will correspond, depending on the case, to 30% or 50% of the value of the rent, with a limit of 1,200.00 € and 2,000.00 € per month, respectively.
This Law takes effect at midnight of December 31st, 2020.

To access its full text, please click here.
 

For further information, please contact:

 João Pinheiro da Silva

Real Estate

Email: jpsilva@ctsu.pt

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