Ending a Brazilian lease early: notice, penalty, exceptions

The tenant’s early exit

Article 4 is the rule. During the agreed term the landlord may not retake the property. The tenant may return it, “paying the agreed penalty, proportional to the period of performance of the contract, or, failing that, the one that a court sets”. Two practical consequences follow.

1. Read the penalty clause. Many leases state the penalty as a number of months of rent. The Act then asks that it be reduced in proportion to the time already served. As a formula, and only as a reading of the wording: penalty due = agreed penalty × (months remaining ÷ total months of the term). Whether a court applies exactly this proportion in a given case is a question for a lawyer, and Payotte read no case law on it.
2. A clause that charges the full penalty whatever the date of departure conflicts with the word “proportional” in the article.

Job-transfer exception. The penalty is waived “if the return of the property results from a transfer, by the employer, private or public, to provide services in a locality different from that where the lease began, and if the tenant notifies the landlord in writing at least thirty days in advance” (article 4, single paragraph). Notice should be in writing and keep a proof of receipt. The article speaks of a transfer by the employer; a voluntary move to a new job is not described there.

Non-residential exception. In the special case of a built-to-suit commercial lease (article 54-A), the penalty agreed for early departure cannot exceed the total of the rent still to come until the end of the term. This applies to commercial leases, not homes.

Open-ended leases

When a lease has no fixed term, or has become open-ended by operation of law, the tenant may end it with written notice of at least 30 days (article 6). Without the notice, the landlord may demand one month’s rent and charges (article 6, single paragraph). The guarantee lasts until the property is actually returned (article 39), so give the keys back against a signed receipt.

Other ways a lease ends

Article 9 lists the grounds for undoing a lease: mutual agreement; a legal or contractual breach; non-payment of rent and charges; and urgent repairs ordered by the authorities that cannot be done with the tenant inside, or that the tenant refuses to allow.

• Mutual agreement. Put it in writing. If the agreement is signed by the parties and two witnesses and gives the tenant at least six months to leave, the landlord has a fast-track route if the tenant then fails to leave (article 59, paragraph 1, I); see eviction in Brazil.
• Long repairs. If urgent repairs owed by the landlord last more than 10 days, rent drops in proportion to the excess; if they last more than 30 days, the tenant may end the lease (article 26).
• Sale of the property. The buyer can end an unregistered lease with 90 days’ notice (article 8); see Brazil’s tenancy law.
• Death or divorce. On the tenant’s death the spouse or partner, then the necessary heirs and dependants living there, take over a residential lease (article 11). After a separation the lease continues with the partner who stays (article 12). Where a guarantor exists, the change must be notified in writing to the landlord and guarantor, and the guarantor has 30 days to withdraw (article 12, paragraphs 1 and 2).

What the landlord may and may not do

A landlord cannot end a fixed-term lease early. After the term, in a written lease of 30 months or more the landlord may end an extended lease at any time with 30 days to vacate (article 46, paragraph 2). In a shorter lease the landlord may retake the home only in the article 47 cases, including after five years without interruption, own use, or approved works. A landlord who retakes the property “for own use” and then does not use it for that purpose within 180 days, or does not use it for at least a year, commits a crime of public action punishable by three months to one year of detention, and the tenant can claim a fine of 12 to 24 months of rent in separate proceedings (article 44, II and single paragraph).

Which professional to consult

A lawyer registered with the OAB can read the penalty clause and draft the notice or the written agreement; see the property lawyer page. A real-estate administrator can run the handover inspection. For a foreign tenant leaving the country, a power of attorney can allow someone in Brazil to return the keys; see power of attorney from abroad.