Regulation of Housing Framework Law

On November 3rd, 2021, the Decree-Law no. 89/2021 was published in the Portuguese Official Gazette, which regulates several Housing Framework Law provisions  regarding the guarantee of alternative housing, the  pre-emption legal right and the supervision  of housing conditions (hereinafter the “Decree-Law”).

The  aforementioned  Decree-Law  aims  to regulate several provisions  of Law no. 83/2019, of September 3rd (hereinafter the “Housing Framework Law”), which approved a first level legal framework, enforcing the duty to regulate some specific matters,  namely: i) the obligations of public entities regarding the guarantee of an alternative housing; ii) the terms in which  such entities have the  legal pre-emption right in the sale of   real estate housing transaction; and iii) their  supervisory powers of the habitability conditions within the scope of housing leases.

 In this regard, article 3 of the Decree-Law defines an “effective housing shortage situation”, for the purposes set forth in paragraph 6 of article 28 of Law no. 81/2014, of December 19th, in its current wording (hereinafter the “Supported Housing Lease Regime”). It is thus  considered that individuals in a housing shortage situation  are "those who do not have, or  have an actual risk of losing, a property and have no housing alternatives".

Adequate housing is considered to be any building unit or building destined for habitation purposes,  suitable to worthily satisfy the habitation needs of an  individual or of a  certain housing aggregate,  considering, namely, its composition, the  house typology, and its habitability and security conditions. The legal framework  excludes as alternative housing the one that imposes a change to the pre-existing housing aggregate to the  shortage situation, except if this change results from a request or  if the written agreement of all the parties involved is obtained.

The Decree-Law also imposes  a specific duty of action for public entities, establishing that it is their responsibility, within the scope of protection and accompaniment during eviction, to provide the necessary support to households in  an effective housing shortage situation , as well as to ensure the referral to a housing response, in the first line, through permanent housing of the existing public housing stock and, in its absence, to ensure temporary accommodation solutions.

 Furthermore, it is also established a duty of articulation between the various entities of the State and the municipalities,  in order to proactively solve the situations of  individuals in an effective housing shortage.

 Regarding the housing social function, the Decree-Law promotes its effective use, granting the municipalities the possibility, within the scope of the procedure for classifying a real estate for housing use as vacant, when it is located in an area of urban pressure, to present a proposal to lease the property to its owner, for subsequent sub-leasing or,  in cases where, after  a supervision, it is concluded that the real estate is in a poor state of conservation, to use the procedure of classifying the real estate  as vacant to determine the execution of works required to correct bad security or health conditions, under the terms  foreseen in article 89 and following of Decree-Law no. 7/2005, of April 16th. The Decree-Law also clarifies the cases in which the property is classified as vacant, in order to determine the execution of works necessary to correct bad safety or health conditions, under the terms set forth in Article 89 and following of Decree-Law no. 555/99, of December 16th, in its current wording (hereinafter the “Legal Framework of Urbanization and Building Edification”).

The Decree-Law also clarifies the cases in which, in addition to the other situations  foreseen in the applicable law, there is a  pre-emption right in the onerous transaction of real estate housing : i) in an area of urbanistic pressure, delimited on the basis of  lack or inadequacy of supply, under the terms set forth  in Article 2-A of Decree-Law no. 159/2006, of August 8th, in its current wording; and ii) in territories identified in the Portuguese National Housing Program  on the basis of the lack or inadequacy of supply referred to in the preceding subparagraph. 

There is a graduation of  preference hierarchy between the various public entities and it is foreseen that this mechanism operates within the scope of the legislation already in force for this purpose, in particular, the Decree-Law no. 263 -A/2007, of July 23rd, which already guarantees the dematerialisation and simplification of this procedure.

The period foreseen for the exercise of this right is of 10 (ten) days, without prejudice to the fact that, in the event of plural exercise, the  entity with the best rating shall prevail.

Finally, and regarding the supervision of housing leases, the Decree-Law defines the competences that the Institute for Housing and Urban Rehabilitation, I.P. (hereinafter "Instituto da Habitação e da Reabilitação Urbana, I. P.” – “IHRU, I.P."), as a State institution  to whom it was attributed the responsibility in this field and will  have  such competences from now on (cf. articles 8 and 9 of the Decree-Law).

Within this scope, we highlight that when IHRU, I. P.  is aware of facts that may substantiate the existence of deficiencies in the habitability conditions of leased or sub-leased real estate, it may request the local Municipal Council to determine the level of conservation of the respective leased premises and, in this way, in articulation with the local authorities,  may contribute towards solving the problems detected in the habitability conditions of the leased properties.

At last, it should be noted that it is also foreseen  that the advertising of real estate for lease  must be accompanied by mandatory information in order to allow the prospective tenant to have prior knowledge of the building or building unit to be leased, thus providing more transparency and credibility to this market, avoiding the publishing  of real estate which does not have an authorized residential use or which does not meet the required conditions for that purpose (cf. article 10 of the Decree-Law).


To access the full text of the new Decree-Law, please click here.

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