In Portugal, long-term residential rental contracts can be both renewable and non-renewable. So how do you know if your contract is renewable, how does such a contract affect your lease, and what conditions does this impose on the rental? Hopefully we can explain everything in this post.
Unless the contract specifies explicitly that the contract is not renewable (in Portuguese, não renovável), then it is a renewable lease. This means that even in the case where there exists an omission in the text, and the contract doesn’t specify whether the rental is renewable or not, by law it is considered renewable. In most cases, this will be explicit, and normally the lease will specify the initial rental period, that it is renewable and what the renewable periods are.
As an example, a 1-year lease beginning on 1st January 2026, and renewable for 1-year periods, could be described in the contract along these lines in Portuguese: “pelo prazo certo de 12 (doze) meses, tendo o seu início em 1 de janeiro de 2026 e o seu termo em 31 de dezembro de 2026, renovável por períodos de 12 (doze) meses“.
The above is a very common example of contracts signed regularly all the time in the Portuguese rental market, and in most cases, not only are the stated conditions complied with by both sides with no problems, but also most owners wanting to cancel the lease will only oppose the 3rd contract renewal, 3 years after the rental started, in a mistaken interpretation of the law.
This is because legally, the minimum renewable period for residential rental contracts is THREE YEARS, according to Article 1096 of the Civil Code. Now this article does mention that this 3 year minimum is the case “unless otherwise stated” (Salvo estipulação em contrário), which may lead some owners to write contracts with renewable periods of less than 3 years, believing that they are complying with the law. But this article must be read and interpreted in conjunction with the 3rd clause of the following one, Article 1097, which says that if the owner opposes the first renewal of the contract, this only takes effect three years after the contract is signed. If a contract is signed for 1 year, and is renewable for every year after that, there would be a conflict in the law, whereby the owner could take advantage of a loophole and oppose the SECOND renewal without having to wait 3 years. This would mean that not agreeing to the second renewal would actually take effect before not agreeing to the first one, which is obviously not the intention of the Portuguese law-makers, and is in accordance with the opinion expressed by every real estate lawyer we have ever consulted about this.
SUMMARY: By law, the minimum renewal period for residential contracts is 3 years. This means that legally, the minimum renewable residential contract is 1 + 3 = 4 years.
So, now that we have established what a renewable contract is, what’s the difference between a renewable and a non renewable contract?
Let’s start with the easiest situation, a NON-renewable contract. Basically, there is a start date and an end date, and the duration could be anything from 1 year to 30 years. When the contract terminates, on the end date, the tenant has no further rights and must leave otherwise they are illegally occupying the property. If the contract is longer than 1 year, then the rent can be legally increased every year by the official coefficient which is 2.16% for 2025 and will probably be 2.24% for 2026.
In contrast, with a renewable contract, the minimum validity of which is 1+3 = 4 years, the renewal occurs automatically after 1 year if the tenant doesn’t say anything. If the tenant does want to oppose the renewal, they must do so at least 90 days before the renewal date and by sending a registered letter with receipt to the owner at the address mentioned on the contract. Otherwise, as stated previously, the contract renews automatically with exactly the same conditions, except for the possibility of the official increase coefficient being applied as with non-renewable contracts.
So the main takeaways of all this would be (and this is despite the reality of the great majority of rental contracts signed in the market today):
– renewable contracts can be for an initial period of 1 year, but must be renewed for a 3 year period after that
– the owner can oppose the first renovation of a renewable contract that has an initial period of 1 year, but it will only take effect after 3 years. Also, since the contract has already been renewed for a further 3 years, this opposition only takes effect at the end of this renewal period, a total of 4 years after the contract started.
– non-renewable contracts would be a way of circumventing the above conditions/complications.