From deposits to advance payments of several months, here’s what the law says about frequent problems many people face when renting a property.
When moving to Portugal many people want to rent before they take the next step and buy a property. For many reasons, but especially to make sure that the area is nice and if that is actually the place where they really want to settle. However, what seems like a fantastic option can easily become a nightmare from the first day you start looking at properties online.
Although not compulsory, it is very common to see landlords asking for deposits and there is nothing wrong with this from a legal point of view. Landlords have the right to ask for a deposit.
The deposit works as a guarantee. The landlord can require the tenant to pay a deposit in order to prevent any damage the tenant may cause to the property during the period of time the tenant is living there.
According to Inês Pacheco, legal advisor at DECO: “the existence of a deposit and its amount should always be included in one of the contractual clauses. The law does not establish any limit, and it is up to the landlord and tenant to agree on the amount of the deposit. Normally, the amount is set taking into account the rent, corresponding to one or two months rent”.
If the property has been well looked after and the tenants have not caused any damage to the house, when the contract ends it is time for the landlord to give the money back to the tenant. However, there are situations that do not end like this.
According to Inês from DECO: “At the end of the rental contract, if there is no need to carry out any repairs, the landlord cannot keep the amount of the deposit”.
To avoid this type of problem, Inês recommends that tenants “do the inspection together with the landlord when leaving the property and evaluate together the state of the property. During the visit, the tenant can also take pictures of the property to prove that it is in good conditions. If this doesn’t work, tenants can take the landlord to court to get their money back.”
It is important to note that a deposit and the advance payment of rent are not the same thing. “The advance payment of rents means that the tenant, at the commencement of the lease, will pay more than one rent to the landlord. Once again, if such a regime is agreed between the landlord and tenant it must be included in the lease agreement”, she said.
Contrary to what happens in terms of the deposit, the advance rent payment has a maximum limit of three rents.
“In practice, when advance payment of the rent is made, the tenant will not need to pay the last rents set in the contract”, Inês added.
Another problem that many tenants complain about is the constant increase in rents. However, this is not legal unless it is done under the following terms.
The rent increase can only happen if it is written in a clause of the lease. Otherwise, it must follow the “coeficiente de atualização de rendas” for each year.
In this sense, the update can only be done after one year of the beginning of the contract, by registered mail with acknowledgement of receipt or delivered by hand with the tenant’s signature. This letter must mention the increase and from when it is due.
It is always important to remember that these increases can only take place after the 12 complete months of the lease and can never be superior to the referred “coeficiente de atualização de rendas” (unless written in the contract).