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Portuguese Government Creates Instrument to Protect Landlords and Tenants
19 February 2018
The Portuguese Government will create an instrument covering rental contracts that will protect landlords in case of non-payment of rent and renters in case of a sudden fall in income. The Secretary of State for Housing, Ana Pinho, stated that the instrument would have three components, namely “non-compliance, multi-risk coverage and sudden fall in income,” thus “exempting tenants from the for guarantors and deposits.”
According to the official, who was speaking at the opening of the Seminar on Urban Rehabilitation, Housing and Tourism, organized by the Institute of Legal and Political Sciences of the Faculty of Law of the University of Lisbon, there is an established idea in the market that “leasing is high-risk business” due to the possibility of tenants’ non-compliance in the rent payment.
However, “the default rate is below 0.5%” in the rental market, “which means that it is more than 10% below the home mortgage default rate,” said Ana Pinho, cited by Lusa.
Based on data from 2015 and 2016, the Secretary of State indicated that “from the beginning of legal action, whether through the National Rentals Desk (BNA) or in court, a decision or an eviction order” takes, on average, less than six months.
In addition to reducing risk in the rental market, the government is working on “gathering information” regarding prices per square meter (m2) in rental contracts, Secretary Pinho stated, arguing that it the data is a basic requirement to regulate the market. “At the end of the first quarter, we will release data on prices per square meter on leases in the previous year,” she said.
Original Story: Idealista
Photo: Gtres
Translation: Richard Turner