Member Article

On 11 March 2020, the World Health Organization declared a public health emergency of international concern (PHEIC) following the spread of SARS-CoV2 (Coronavirus) and the disease it causes, Covid-19.

A state of emergency was declared in Portugal by Decree of the President of the Republic 14- A/2020 of 18 March and was renewed by Decree of the President of the Republic 17-A/2020 of 2 April. Following such declaration, exceptional and temporary measures have been adopted in relation to the COVID-19 pandemic.

In this context, Law 4-A/2020 of 6 April and Law 4-C/2020 of 6 April have recently been approved. These laws have an impact on lease agreements and Law 4-C/2020 of 6 April also impacts other contractual relationships involving the operation of properties for commercial purposes.

1. Law no. 4-A/2020 - termination of lease agreements

Law 1-A/2020 of 19 March had created a set of exceptional and temporary measures in response to the COVID-19 pandemic and Law 4-A/2020 of 6 April now adds exceptional and temporary rules on the expiry and opposition to the renewal of residential and non-residential lease agreements.

The new wording of article 8 of Law 1-A/2020 of 19 March, as amended by article 2 of Law 4-A/2020 of 6 April, provides that – while the measures to prevent, contain, mitigate and treat the COVID-19 pandemic remain in place (as determined by the public health authorities) and until 60 days after the end of the measures – the following are suspended:

• The expiry of residential and non-residential lease agreements, unless the tenant has no objection to the termination of the agreement;

• The taking of effect of any revocation or opposition to renewal of residential and nonresidential lease agreements by the landlord;

• The period of six months provided for in article 1053 of the Civil Code (i.e., the period at the end of which the landlord can require the return of the property once the expiry of the agreement is confirmed) if this period ends while the above measures are in force.

Law 1-A/2020 of 19 March, in its original wording, had already suspended the effect of any notices to terminate residential and non-residential lease agreements given by the landlord until the end of the measures to prevent, contain, mitigate and treat the spread of COVID-19, as determined by the national authority for public health.

Furthermore, Law 1-A/2020 of 19 March suspended eviction actions, special eviction procedures, and actions to regain possession of leased property, when, pursuant to the final judicial decision, the tenant could be placed in a vulnerable position by being made homeless. Now, this suspension also applies when a situation of vulnerability results from some other overriding social reason.

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