What Can I Do If My Tenant Stops Paying Rent?

Sara Ferreira | Lawyer

Landlords are often faced with non-payment of rents for the properties they rent.

When the Tenant is non-compliant with the payment of the rent, the Landlord can either ask for an indemnity or terminate the lease agreement (within certain conditions).

The Landlord is entitled to ask for an indemnity up until 20% of the amount of the rent that is due, but will be prevented from terminating the contract.

Hence, In order to set a limit to repeated non-compliance with the lease agreement by tenants, the Portuguese legislator stipulated two specific moments to justify the termination of the lease agreement:

1. Lack of payment of the rent for three months or more;
2. If the Tenant is more than eight days late in paying the rent, on more than four occasions, consecutive or interpolated, within a period of 12 months with reference to each rental agreement.

However, this right to terminate the lease does not last forever. 

The Portuguese Civil Code specifically stipulates that termination of the lease agreement on the grounds of lack of payment or delay on the payment must be effected within three months from the knowledge of the fact on which it is based, under penalty of forfeiture.

It is up to the Landlord, within his legally established rights, to enforce the termination of the contract, by notifying, in written, the Tenant of the termination, explaining the obligation the tenant has breached.

In order to avoid the termination of the contract, the Tenant is offered a chance to settle the amount of the rents that are due and, hence, extinguish the breach.

Subsequently, if the Tenant fails to extinguish the breach, in the situations permitted by law, the legislator provides two ways of reacting judicially and extrajudicially.

Special eviction procedure

The legislator thus established the special eviction procedure as a more speedy means of extrajudicial reaction to the tenant's non-compliance, enabling the Landlord to terminate the lease when the Tenant fails to pay the rent.

The special eviction procedure is an urgent procedure. Therefore, in order to access to this procedure it is mandatory to fulfil the following requirements:

1. Having a written lease agreement;
2. The landlord has paid stamp duty and complied with the legal obligations to register the contract. 

The special eviction procedure takes place at a virtual judicial office, which is responsible for notifying the Tenant to do the following:

1. Vacate the property and, if necessary, pay the applicant the amount requested, plus the fee paid by the Landlord;
2. Oppose the claim and/or request that the eviction of the Tenant is deferred.

Eviction action

If the requirements to access the special eviction procedure are not met, the legislator also allows access to another judicial remedy. 

In the Eviction action the right to terminate the lease for non-payment expires as soon as the Tenant, by the end of the period for opposing the legal action, pays, deposits or consigns to deposit the sums and the compensation due to the Landlord.

Afterwards, the law allows the Tenant to present his defence within 30 days. 

The Eviction action will then continue its normal procedure until the judge in charge of the case passes the sentence. 

If you have further questions regarding this matter, get in touch with Sara Ferreira and she will be delighted to assist you.