VERBAL RENTAL CONTRACT IN PORTUGAL: LEGALITY AND RIGHTS FOR TENANTS AND OWNERS

by | Jan 18, 2024 | Owners, Rentals, Tenants

In Portugal, a verbal lease agreement is an issue that raises several legal questions and implications for both parties involved: for both the landlord and the tenant. Understanding what characterizes this type of contract, its legal standing, and the rights and responsibilities  associated with such an agreement is crucial for both parties.

Definition of Verbal Rental Contract

A verbal lease occurs when there is no written document formalising the agreement between the owner and the tenant. Although it is much less common nowadays, it is still possible for this type of contract to occur, often for reasons of urgency or informality in the rental negotiation.

Legality of the Verbal Rental Agreement

The legality of such a verbal agreement in Portugal is a complex issue. Portuguese law establishes that all rental contracts must be put in writing (Artigo 1069.º of the Civil Code). However, in some situations, when there is a lack of time or it is logistically impossible to make a written contract, a verbal contract may be accepted, although this is an exception.

It is essential to highlight that, despite such contracts being accepted in specific circumstances, this type of verbal agreement lacks the guarantee, security and clarity provided by written contracts. Parties may face difficulties in resolving disputes and proving agreed terms in the absence of the correct documentation.

Tenant Rights with Verbal Contracts

The tenant’s rights in a verbal lease are similar to those in a written contract. The tenant has the right to use the property in habitable conditions, and is protected against arbitrary evictions and unjustified increases in rent. However, as mentioned above, the lack of a written contract can create ambiguities regarding the specific terms of the agreement. To protect the tenant’s rights, it is recommended that both parties document the terms of the rental in writing, even if occupancy has already begun. If this is not possible, the tenant should pay by bank transfer if possible so that all payments are registered, and make sure that all communication is documented and saved.

Owner Rights and Contract Validity

The landlord, even in a verbal contract, has fundamental rights, such as receiving the agreed rent and expecting proper maintenance of the property. However, the lack of a written contract can make it difficult to protect the landlord’s interests in situations under dispute. As for the validity of the verbal contract, this may be questioned if one of the parties denies the existence of the contract or disputes the agreed terms. The absence of tangible evidence, such as a written document, can make it difficult to prove the existence and details of a contract.

Conclusion:

In short, a verbal rental contract in Portugal is a practice that, although accepted in certain circumstances, lacks the legal guarantee provided by a written contract. Both the tenant and the landlord may face challenges in defending their rights in the event of a dispute. Therefore, it is highly recommended to formalise all lease agreements in writing, ensuring the necessary clarity and legal security for both parties involved.

(Original article in Portuguese kindly provided by Imoexpansão Imobiliária)