How much can landlords charge for late rent payments?

At a time when we are facing an economic crisis, it is possible that there may be some delays in rent payments. One question on the minds of Portuguese who are faced with this situation is how much landlords can charge for late payment of these rents.

The answer, according to Article 1041(1) of the Civil Code, is The answer, according to Article 1041(1) of the Civil Code, is compensation equal to 20% of what is owed, as well as the value of the rents themselves. This means that if the rent arrears amount to 1,000 euros in total, the landlord can ask for an additional €200 in compensation.

The law also provides for an exception: compensation for what is owed cannot be claimed if the contract is terminated on the grounds of non-payment.

If the tenant pays the rent arrears within eight days of the start of the arrears, the landlord loses the right to compensation. In this case, the contract cannot be terminated for the delay, unless the delays are recurrent.

In the event of rent arrears, the landlord has the right to refuse to receive future rent and to terminate the lease. And even if they receive the rent for subsequent months, the landlord can still terminate the contract and demand the 20% compensation.


What if there are guarantors?

If there are guarantors on the lease and the tenant fails to pay the rent arrears within eight days, the landlord must send a registered letter with acknowledgement of receipt to the guarantor within 90 days, informing him of the arrears and the amounts owed.

The landlord can demand that the guarantor pay the rent arrears, as well as the 20% compensation, after giving notice.

If the rent arrears and the 20% compensation for the arrears are paid, the arrears cease. If the landlord refuses to accept payment of these amounts, the tenant - or the guarantor - can resort to a deposit, thus also putting an end to the arrears.

 
What happens if the tenant doesn´t pay?

If we assume that late payment of rent can be caused by a difficult financial situation, this is only worsened by the landlord charging an additional 20% on the rent.

If the tenant fails to pay the rent for three or more months, the landlord has the right to terminate the contract. This right, it should be noted, also applies if the tenant delays paying the rent by more than eight days “for more than four times, consecutive or interpolated, in a period of 12 months.”

To terminate the contract, the landlord must send a registered letter with acknowledgement of receipt to the tenant explaining his decision and the grounds for it, based on the terms of the law. This notification can also be made by a legal representative, such as a lawyer or solicitor.

In the event that the tenant refuses to leave, the landlord can turn to the Balcão Nacional de Arrendamento (BNA), a body that has competence for “the processing of the special eviction procedure.” To appeal to the BNA, the landlord must submit the necessary documentation and pay the associated court fee of €25.50 within 10 days.

Only landlords whose accounts with the state are up to date can use the BNA. Once payment has been made, the BNA notifies the tenant by registered letter with acknowledgement of receipt that they have 15 days to leave the property.

These evictions can be lengthy and may be opposed by the tenant if they pay the rent arrears and the associated penalty.




Source: Doutor Finanças