New Law on Urban Lease

Size: px

Start display at page:

Download "New Law on Urban Lease"

Beverly Wood
5 years ago
Views:

1 Page 1 of 9 Subscribe Share Past Issues Translate RS Veja este no seu browser OCT 2015 New Law on Urban Lease Law No. 26/15, of , approves the Law on Urban Lease ( LAU ), which establishes the new legal regime on urban lease. The LAU is not applicable in the following cases: Lease to non-permanent housing (eg beach houses, spas or other transitory purposes.); Lease of home occupied by the Landlord during the Landlord s temporary absence; Lease of non-habitable spaces (namely, for display of advertisements, warehousing, car parking or other limited purposes, unless the parking lease is done in combination with lease for residential/housing or non-residential purposes); Leases that are subject to special legislation. The LAU provides as follows: a) the general regime applicable to all Lease Agreements; b) he special regime applicable to the Lease Agreements for housing purposes and the other for the non-residential Lease Agreements. A. GENERAL REGIME I. Formal and Substantive Requirements The Lease Agreement shall be in writing. The following leases shall be subject to public deed: 1. The leases for non-residential purposes (commercial, industrial and related to liberal professions);

2 2. The leases subject to registration. Page 2 of 9 The lack of public deed shall not preclude the Lease Agreement from being deemed validly concluded, provided it is in writing. The receipt is a suitable evidence of the Agreement. Under the LAU, the following requirements shall be included in the Lease Agreement: Identity of the parties; Identification and location of the leased property; Purpose of the lease; Term and date of conclusion; Value of the rent and regime on update of the lease; Horizontal Property Regulation, if any; Dwelling Permit (its omission gives rise to the application of a penalty to the Landlord and it must be under 6 years). II. Rent and Update The rent shall be necessarily established in national currency (Kwanzas). The clause fixing the rent in foreign currency shall be void. With the entry into force of the LAU, in January 21, 2016, all agreements (including those that are already in force) must comply with the requirement of the lease to be fixed in Kwanzas. The update of the rent can be made in the following situations: a) Annually, based on the coefficients fixed by the Official Gazette in October, upon 60 days notice, including the existing rent, the used coefficient and the new value of the rent; b) By contractual arrangement: a. If the Lease Agreement is for residential purposes under a mutually determinable lease; b. If the Lease Agreement is for commercial or industrial purposes and is longer than 5 years or if the period has not been agreed; c) Extraordinary maintenance or improvement works, administratively imposed; When the Tenants have property for housing in the municipality where they live; The Tenant may object to the annual update of the rent made on the basis of coefficients, in case of error in the relevant factor or in the application of the law. The refusal shall be explained and made within 15 days after receipt of the communication of the update. Then, the Landlord may reject the rent mentioned, within 15 days, under penalty of having to accept the indicated value. If the Landlord rejects the amount the Tenant may require that the amount of the rent is fixed by a special commission. The tenant that does not agree with the new rent may within 15 days terminate the Lease Agreement. The parties may stipulate an advance rent payment that shall not exceed three months. Rents become due until the repayment of the damages of the leased property (and not until the Lease Agreement has expired). The mutually determined rent, the conditioned rent regime and the supported rent regime for Housing Lease are also laid down. III. Period and Termination of Lease Agreement A minimum supplementary period of 2 years and a maximum period of 30 years are also laid

3 down. Page 3 of 9 The Landlord may only terminate the Lease Agreement as provided by Law, without prejudice to the limited duration regime mentioned below. IV. Works, charges and expenses The parties may specify upon whom rests the responsibility for the charges and expenses. In the event it is not established in the agreement, the following expenses shall be borne by: a) the Tenant: expenses of the provision of goods and services related to the leased property; b) the Landlord: the expenses related to the management, maintenance and benefit of the common areas of the property and the common interest services; taxes, insurance premiums, water treatment levy and the administrative requirements for the cleanliness of the leased property; the ordinary and extraordinary maintenance works of the leased property (if certain conditions are met, these works may give rise to the update of the rent). If the Landlords do not do the works to which they are attached under the Law: The Tenant may substitute the Landlord, by deducting the costs on rents; The Administrative Authorities may determine the compulsory implementation of works, proceeding with the eviction and occupying the property up to one year after completion of the works. V. Termination of Lease Agreement The Lease Agreement shall end by agreement, rescission, expiration, termination or other reasons established in the Law. When performed by the Landlord, the communication for the termination of Lease Agreement must comply with the terms laid down in the procedural Law. a) Rescission The Tenant may rescind the Lease Agreement based on breach by the Landlord. The rescission of the agreement by the Landlord must be ordered by the Court and may be grounded on the following breaches by the Tenant: a) Not paying the rent; b) Use or allow others to use the leased property for a different purpose other than that for which it was intended; c) Use the property repeatedly to illicit, imoral or dishonest practices; d) Carry out, without written consent of the Landlord, works in the property which substantially alter its external structure or the internal structure of its divisions, or to perform any act that may cause considerable damages; e) Sublet or loan, in whole or in part, the leased property, or to transfer their obligations under the agreement, in cases where these acts are unlawful; f) Collecting from the sub-tenant a higher rent than the rent allowed under article 1062 of the Civil Code; g) Keep closed/unused the leased property, for more than a year; h) Failing to provide the owner or the Landlord with the personal services which led to the occupation of the property. The action for rescission must be filed within one year from the date on which the claimant

4 gained knowledge of the practice serving as the basis for the action, under penalty of expiration. In the case of continued practice the period of one year shall run from the date when the practice has ceased. Page 4 of 9 Eviction Notice, Immediate Eviction and Warrant of Eviction The eviction notice shall be established with a summary procedure, in the declaratory phase, with some particularities: 1. It becomes possible to cumulate the request for termination of a Lease Agreement with an application to order the Tenant to pay the accrued rent and rent due and/or compensation; 2. In their defense, the Tenants may submit counterclaim for improvements performed in the leased property or seek compensation, where this is legally justified. In any case, regardless of the amount of the claim, either party may appeal the decision to a Higher Court. It is also laid down, pending the Eviction Notice, the Immediate Eviction, on grounds of nonpayment of accrued rent. The Landlord may require the Warrant of Eviction whenever the Tenant does not hand over the property on the date specified in the sentence. The warrant may be suspended when the holder has not been summoned and shows a certificate to occupy the property or when the eviction notice of properties occupied by the State or other public bodies has been granted. The judge summarily decides whether the warrant suspension decision shall be maintained or whether the warrant shall be executed. b) Revocation of the Agreement The agreement to revocate the Lease Agreement must be in writing whenever (i) it is not immediately carried out or (ii) if it provides for compensatory or ancillary clauses. c) Expiration The Lease Agreement shall be terminated by expiration, as provided for in the Civil Code, without prejudice to special regimes. d) Termination The Lease Agreement shall cease with termination by the tenant, who may prevent the automatic renewal of the Lease Agreement. The landlords may terminate the Lease Agreement for the expiry of the period or the renewal, only in the following cases: a) When they need the property for their housing, or to build their residence there, or their first line descendants, or ascendants residence (including the spouse or the unmarried partner s descendants or ascendants); b) When they intend to extend the property or to build new buildings in order to increase the number of leasable areas and have their layout plan approved by the competent administrative authority, which will be subject to legislation regulating such competence; c) When the property is found damaged and its improvement or repair is not advisable and the layout plan is approved by the competent administrative authority, which will besubject to legislation regulating such competence; The termination by the Landlord has to be made in a lawsuit, at least 6 months prior to the end of the contract term, but it does not require the eviction until three months have elapsed on the final decision.

5 The termination for housing depends on the fulfillment of cumulative conditions. It requires the payment of compensation corresponding to six months of rents at the time of eviction. Page 5 of 9 B. SPECIAL REGIME B.1. Special Provisions of Housing Leases When the lease of the property for housing is made together with the lease of the furniture to the same tenant, the entire agreement shall be considered urban lease and the rent includes everything. The Tenants may still exploit any domestic industry, even if taxed, as long as they do not take more than three salaried employees. Unless otherwise provided by the agreement, besides the Tenant, the following people are allowed to live in the Property (i) those who live with them in the same household; (ii) a maximum of three guests. 1. Rent Three rent regimes are laid down: I. Mutually determined: Established by free negotiation between the parties. II. Conditioned: a) The initial rent of the first or new leases results of free negotiation between the parties, it shall not exceed per month one twelfth of the product resulting from the application of the rate of conditioned rent to the present value of the property, in the year of conclusion of the agreement. b) The following leases shall be subject to this regime: a. Established under the right of a new lease: b. Properties which were built for residential purposes by the State and its autonomous bodies, c. Properties built by low cost housing cooperatives, residents associations and housing and building cooperatives which have benefited from subsidies to the financing or building from the State, local authorities or public institutions; d. In the other cases provided for by special legislation. Although the wording of the law is not entirely devoid of doubts, it seems that the requirement imposed in the preceding paragraphs b. to d. ceases 25 years after the date of the first transfer of the property, unless specifically provided otherwise. III. Supported: The amount of rent is subsidized and there are very specific rules for its determination and update. It applies to properties constructed or purchased for housing lease by the State and its autonomous bodies, public institutions and local authorities and the private institutions of social solidarity with the financial support of the state. This regime is subject to specific legislation. 2. Transfer Whatever the matrimonial property regime is, the position of the Tenant shall be

6 communicated to a surviving spouse or surviving unmarried partner. Page 6 of 9 It is up to the court to decide who obtains the position of the Tenant, bearing in mind the financial situation of the spouses, the interest of children and the grounds for divorce. a. Transfer by death The lease for housing does not expire by death of the original tenant or of the one to whom has been assigned their contractual position, if the following persons survive them: a) Spouse without de facto separation ; b) Person living with the tenant in non-marital partnership for more than 3 years c) Descendant with less than 1 year old or who lived together with the tenant for over a year; d) Ascendant who lived with the tenant for over a year; e) Kin, under the conditions laid down in the aforementioned paragraphs b) and c); The right to transfer shall not be applicable if the holder of such right has residence in the respective locality at the time of death of the original Tenant. The supported rent regime is applicable to the transferred agreements in the following circumstances: To descendants over 26 years old and less than 65 years old; To ascendants with less than 65 years old and kin, under the same conditions To descendants or kin under 26 years old, when they reach that age and provided one year has passed since the death of the Tenant. The assignee must notify the landlord by written declaration, of the date on which they turn 26 years old, at least 30 days in advance. The supported rent will not apply in the following circumstances: (i) the descendant is invalid with a degree of incapacity higher than 60%; (ii) the descendant or ascendant are retired due to absolute invalidity, or not benefiting from invalidity pension, they suffer from total incapacity for work; (iii) the kin meets the conditions referred to above. The assignees must notify the landlord, of the death of the original Tenant or the surviving spouse, notification which shall be sent within 180 days following the occurrence, gathering the authentic or authenticated documents proving their rights. In those situations where the Lease Agreement expires (if the deceased is not the original Tenant but any other that has followed him) the following people are entitled to a new lease: (i) everyone who is included in the household of the Tenant, provided they live with the Tenant for more than three years, except for those who live in the leased property by virtue of a legal transaction that does not directly pertains to housing; (ii) the subtenant, when the sublease is effective against the Landlord, choosing among several, the oldest. In any case, there will be no right to a new lease if the holder of such right has residence in the respective locality at the time of death of the original Tenant. The limited duration regime shall be applicable to the new Lease Agreement. However, the Landlord may refuse the new lease in the following cases: a) If they intend to sell the property or the leased building unit; b) If they need the place to reside there or to build their house there because they reside in a place that does not meet the family s own housing needs or in a leased home, terminating the respective lease; c) If they need the place for their parents or kin housing (in the event these reside in a place that does not meet the familiy s own housing needs or in a leased home, terminating the

7 respective lease); d) If they intend to use the area for a different purpose other than housing, obtaining for this purpose the required permit from the competent authority. e) If they intend to expand the property or to build a new building, to increase the number of leased areas. Page 7 of 9 The right to the new lease must be exercised by a written statement to the landlord within 30 days of the expiry of the previous agreement. The Landlord has 30 days to invoke any exception. The non-observance of the deadline entails the expiration of the respective rights. 3. Limited duration agreements It is given to the parties the power to set a period for the actual duration of urban leases for housing, provided that the respective clause is inserted in the written text of the agreement. The period shall be at least five years. When the Landlord terminates the Lease Agreement, the Tenant is not entitled to any compensation. On the other hand the Tenant may (i) terminate the Lease Agreement or (ii) revocate the Lease Agreement at any time upon prior notice of 90 days. The Law does not specify about the period the Landlord must comply with in order to terminate the Lease Agreement, i.e to prevent its renewal. Thus, it is not clear whether the supplementary period of termination of article 1055 of the Civil Code shall be applied (which until now was only applicable to the Tenant regarding the urban lease) or if there is another period deemed more appropriate. As for the Tenant, we are of the view that the minimum termination period is 90 days, although that is only expressly stated regarding the revocation of the Lease Agreement. The LAU is not clear about the period for which the Leased Agreement is renewed, when it is not terminated by either party. We do not believe that after the period of 5 years the Lease Agreement expires. However, the question about the renewal period remains to be cleared up, as there is no provision in this regard. Again, the question arises as to whether it is appropriate to apply the supplementary period of one year, established in article 1054 of the Civil Code. The rules for deferment of the evictions shall not apply to the limite duration agreements. The eviction may be suspended on account of sickness of the Tenant. B.2. Special Commercial or Industrial Lease Provisions The lease of properties or areas of urban properties or rural properties used for purposes directly related to commercial or industrial activities shall be considered as commercial or industrial lease. It shall not be considered as lease of urban or rural property, the agreement where the exploitation of a commercial or industrial establishment installed there is transferred temporarily and with charges to other, together with the benefit of the property. However, if any of the following circumstances occurs, the agreement shall be considered as leased property: a) When the transfer is not accompanied by the transfer combined with the facilities, tools, commodities or other elements that are part of the establishment; b) If, after the benefit of the property has been transferred, another commercial or industrial

8 activity takes place, or when, generally speaking, it is used for another purpose. Page 8 of 9 The commercial lease agreement shall be made in writing, otherwise it should be void. The lease does not expire by the death of the Tenant, but the successors may waive the transfer right, by informing the Landlord within 30 days that they want to terminate the agreement. The sucessor who wants to continue the agreement shall inform the Landlord in writing about the Tenant's death, within 180 days following the occurrence and shall also include the authentic or authenticated documents proving their rights. If the lease is terminated by expiration or termination by the Landlord, the Tenant is entitled to a compensation, when the rental value of the leased property has increased because of the Tenant. The compensation is set by the court, on the basis of considerations of equity, but it shall not exceed twice the annual rent. It is not clear whether the termination by the Landlord established here is the termination established for the housing lease, where there may be a specific arrangement for a period regarding the Lease Agreement or if it corresponds to the termination established in the general part of the LAU. The termination provided for in the general part of the LAU already covers the payment of compensation, so it is not clear whether this termination laid down is the termination without cause (ie, one that occurs by fixing a period of limited duration) or whether this provision is just to safeguard the tenant who invested in the leased property, establishing a higher compensation than that laid down in the general part. It has also been established the possibility of transfer (for business) of the Tenant s position, without permission from the Landlord, in the event of take over (transfer) of the commercial or industrial establishment. However, there will be no transfer: a) When the transfer is not accompanied by the transfer combined with the facilities, toold, commodities or other elements that are part of the establishment; b) If, after the benefit of the property has been transferred, another commercial or industrial activity takes place, or when, generally speaking, it is used for another purpose. The transfer shall be concluded by means of public deed, under penality of nullity. The Landlord of the leased property has a pre-emption right in the transfer. Taking into account that a regime of the actual duration for the commercial and industrial urban leases has not been expressly established, it seems obvious that such option shall not apply to this kind of leases and that such leases shall not be freely terminated by the Landlord or subject to a limited duration. However, Article 38, no. 1 b) allows another interpretation by expressly establishing that the rent can be updated in commercial or industrial leases or in leases related to liberal professions where it has been established a period of the actual duration of the agreement of more than 5 years. It seems to us that the legislator expressly admits the possibility of the Urban Commercial and Industrial Lease Agreements to have the actual duration of the agreement (limited). The LAU also establishes that the provisions included in the special part regarding the commercial and industrial leases shall also be applicable to the leases related to liberal professions.

the Landlords (or sublessors) receive from their Tenants other amount that is not for rent payment; c) In the event that the Tenants receive an amount that are not due to them in order to vacate the

9 Page 9 of 9 Crime of Speculation The LAU establishes the crimes of speculation: a) The refusal of the Landlord to issue a rent receipt; b) In the event that the Landlords (or sublessors) receive from their Tenants other amount that is not for rent payment; c) In the event that the Tenants receive an amount that are not due to them in order to vacate the leased property, when the lease has terminated. Entry into force The LAU shall enter into force within 90 days after its publication, on 21 January MORE NEWS Euromoney: ADCA is the Best Real Estate Legal Advisor in Angola Euromoney, the leading global financial publication, has again announced ADCA Law Firm as the Best Real Estate Legal Advisor in Angola, in the Real Estate Awards This recognition results from a survey to decision makers, consultants and lawyers in the industry, undertaken by Euromoney analists. read more ADCA Advogados Edifício Presidente, nº3, 2ª Piso, 253 Luanda - Angola T E. adca.info@adca-angola.com 2015 ADCA Advogados Carvalho & Associados Esta newsletter é de distribuição individual, sendo vedada a sua cópia ou circulação. A informação disponibilizada é de carácter geral e não dispensa o recurso a aconselhamento jurídico na apreciação das situações em concreto. Caso pretenda deixar de receber a nossa newsletter, visite o link seguinte para remover a sua subscrição.

IMMOVABLE PROPERTY (SPECIFIC PERFORMANCE) ORDINANCE 2012

Ordinance 16 of 2012 Published in Gazette No. 1657 of 25th June 2012 IMMOVABLE PROPERTY (SPECIFIC PERFORMANCE) ORDINANCE 2012 Contents 1. Short title and commencement 2. Interpretation 3. Formalities necessary