There are several benefits to renting out a property in Lisbon. As well as providing you with a steady stream of income, it can also allow you to benefit from long-term capital growth. And that’s not all; renting out a property can give you security should your circumstances change in the future.
While all of this sounds great, there are some downsides to renting out a property. For example, landlords are expected to maintain their rental properties, meaning you will have to cover maintenance costs. As well as this, you will have to pay more stamp duty if you have more than one property.
Another downside of owning a rental property is that you must understand your tenants' rights. This includes things like what the minimum contract term is and whether you need the contract to be in writing. As well as this, you must understand how to give your tenants notice should you wish to regain control of your property.
If you’re a landlord in Lisbon, and you want to know how to give your tenants notice, then keep reading below.
What Legal Rights Do Tenants Have in Portugal?
In 2020, a few changes were made to rental and tenant laws in Portugal, which gave tenants more rights. This amendment is called “Cristas law”. Here are some of the amendments it includes:
Rental contracts must last for a minimum of one year
After the first year, contracts must be renewed for at least another three years unless the landlord wants the house back for themselves or a family member.
If your tenant is 65 or over or disabled, you cannot give them notice to leave unless you need to do significant work on the building or you want to demolish it.
If you try and force a tenant to move illegitimately, you can be legally punished.
Tenants can terminate the contract if they get fired or can't work because of an injury. They can also terminate it if a joint tenant passes away.
Tenants can demand to be reimbursed – if something happens to the property which is of no fault to the tenant, and they pay to have the property repaired, the tenant can demand to be reimbursed.
Due to the sheer number of rights tenants have in Lisbon, many landlords choose to work with a third party like UpperKey. Upper Key rents the property from you and guarantee your rent. They then rent the property out to their international clientele. Renting the property out like this ensures your property is maintained, you have maximum occupancy, and it is taken care of. However, before you let your property out to a company like Upper Key, you need to consider some essential things, such as your decorations and furnishings.
What Rights Does the Landlord Have in Portugal?
It’s not just the tenants who benefit from this law. Landlords get some pretty good deals too. One example of this is the longer the tenant remains in the property, the lower tax the landlord has to pay. The current tax rate in Lisbon is 28%, but this can be reduced by up to 10%. This is a massive benefit.
Giving Notice to a Tenant in Lisbon
While it can be great being a landlord, there are some situations when you may need to give notice to your tenant. For example, you may want to move back into the property, or you may want to sell it. So, how do you give notice to a tenant in Lisbon?
The first thing to be aware of is that Portuguese law is strongly pro-tenant. In Lisbon, the landlord may only end the lease agreement for a few reasons. These include:
Failure to pay rent
Tenant using the property for purposes that are not set out in the contract
Using the property for illegal reasons
Using the property for immoral, illicit, or dishonest purposes
Undertaking work in the property without the landlord's consent
Landlords can also oppose a lease extension to perform works on the property.
If the tenant has followed all of their legal obligations, but the landlord still wants them to leave, the landlord must give them judicial notice one year in advance of their lease maturity date.
How to Write a Notice to Vacate Letter to a Tenant
Once you’ve decided that you would like your tenant to vacate your property, you need to write a notice to vacate letter to them. There are several different letters that landlords can use while working with tenants. Here are some of the main ones:
Non-renewal of lease – this letter should be written if you or the tenant have decided not to renew the lease.
Lease terms were broken – if your tenant breaks the terms of your lease, but you’re not in a hurry to evict them, you can issue them with a notice to vacate letter.
No longer rentable – if you are remodelling the property and your tenant cannot live there while the remodelling takes place, you will need to send them a no longer rentable letter.
Any lease termination letter should begin with the following information:
The address of the property in question
The tenancy start and end date
Your name and contact details
The tenant's name and contact details
Next, you need to outline why you are asking the tenant to vacate the property, followed by the date you expect them to move out and the process. Finally, you need to put down information about who they should contact with any concerns or questions.
How Long Does it Take to Remove a Tenant in Lisbon?
If you’re renting the property out yourself and not using a company like Upper Key, the bad news is that it can take up to 31 months to remove a tenant from your property. This is much longer than it would take to evict a tenant in the UK or Malta.
Each year, thousands of people in Portugal choose to rent out their property. But why do they do this? There are many reasons why people choose to rent out their property. Some people do it to earn money, while others do it while they test the water in a new location. This allows them to return to their old home should their new home not meet their wants or needs.
While renting out a property can be an excellent investment, it can also have some downsides. One of these downsides is knowing where you stand when you want your tenants to leave. The good news is that giving your tenants notice in Lisbon is much easier than you’d expect. However, it can take a fair amount of time. So, make sure you plan in advance. If managing a property in Lisbon seems like too much work, owners can also consider using a Lisbon rental agency like UpperKey.