Lease
In the context of the epidemiological situation caused by the disease COVID-19, Law 4-C / 2020
of 6th April was approved, which establishes an exceptional regime for situations of delay in
the payment of rent due in urban housing and non-housing lease agreements.

This Law aims to minimize the impact on the household economy caused by the extraordinary
measures that have been implemented to combat the pandemic caused by Coronavirus.
The state of emergency imposed on the 18th of March and extended on the 2nd of April led to
the creation of support in several sectors, including the real estate market, namely renting.
As such, this exceptional regime was approved, which aims to protect those involved in rental
contracts who are in a situation of economic need resulting from the measures taken to
combat the epidemiological outbreak.

For a better framing of Law 4-C / 2020, we make a brief summary of the essential points.

This law applies to rents due after April 1st, 2020, for housing and non-housing lease
agreements.

The law foresees a set of benefits that are mainly directed to the tenants, having however also
foreseen, some financial supports that can be attributed to the landlords.

HOUSING LEASE

Who does it apply to?
Applies to tenants who verify:

a) A drop of more than 20% of the renter's household income compared to the income of the
previous month or the same period of the previous year; and
b) The effort rate of the lessee's household, calculated as a percentage of the income of all
members of that household, intended to pay the rent, is or becomes greater than 35%;

And landlords who verify:

a) A drop of more than 20% in the income of the landlord's household compared to the
income of the previous month or the same period of the previous year; and
b) This percentage of the loss of income is caused by the non-payment of rents by the tenants
under the provisions of this law.

What are the benefits?
1. Tenant's default
The landlord will not be able to terminate the lease on the grounds of failure to pay due rents
in the months in which the state of emergency is in effect and in the first subsequent month.

The tenant is granted the possibility of paying these rents within 12 months in monthly
installments of not less than one-twelfth of the total amount paid together with the rent for
each month.

Only if they are not paid during this period can the landlord terminate the contract on this
basis.

The compensation of 20% of the due amount provided for in paragraph 1 of article 1041 of the
Civil Code, regarding the delay in the payment of rents due in the months in which the state of emergency is in force and in the first subsequent month, can no longer be demanded.

2. Financial Support
Housing tenants, as well as, in the case of students who do not earn income from work, the
respective guarantors, who are in the situations of income breakdown mentioned above and
to students who have residence by frequency of educational establishments located at a
distance greater than 50 km from the permanent residence of the household, an interest-free
loan is granted by the Institute of Housing and Urban Rehabilitation, IP (IHRU, IP) to support
the difference between the amount of monthly income due and the amount resulting from the
application of a maximum effort rate to household income of 35%, in order to allow the
payment of the rent due, the remaining disposable income of the aggregate cannot be lower
than the social support index (IAS).

Housing landlords who have proven to have the aforementioned income drop and whose
tenants do not use the IHRU, IP loan is granted an interest-free loan to offset the monthly rent,
due and unpaid, whenever the remaining disposable income of the household drops, for that
reason, below the social support index.

NON-HOUSING LEASE

Who does it apply to?
It applies to the following establishments:

a) Establishments open to the public for retail and service provision activities closed or whose
activities are suspended under Decree No. 2-A / 2020, of 20 March, or by legislative or
administrative determination, pursuant to Decree-Law no. 10-A / 2020, of 13 March, in its
current wording, including in cases where they maintain the provision of electronic commerce
activities, or the provision of services remotely or through an electronic platform;
b) To catering establishments and alike, including in cases where they maintain activity for the
exclusive purpose of making food for consumption outside the establishment or delivery at
home, under the terms provided for in Decree No. 2-A / 2020, of 20 March, or in any other
provision that allows it.

What are the benefits?
1. Deferral of rent payments
Tenants who fulfill any of the situations mentioned above may defer payment of the rent due
in the months in which the state of emergency prevails and in the first subsequent month, for
the 12 months after the end of that period, in monthly installments not less than one-twelfth
of the total amount, paid together with the rent for the month in question.

2. Tenant's default
As a result of the aforementioned, the landlord cannot resolve, denounce or in any other way
extinguish the lease or compel the property to be vacated on the grounds of non-payment of
rents due in the months in which the state of emergency prevails and in the first subsequent
month.

Tenants to whom this law applies are not liable to pay any other penalties based on the delay
in the payment of rents that are due.

The compensation of 20% of the due amount provided for in paragraph 1 of article 1041 of the
Civil Code, regarding the delay in the payment of rents due in the months in which the state of
emergency is in force and in the first subsequent month, can no longer be demanded.

Cases in which landlords are Public Entities
When the landlord is a public entity, during the term of this law, it may:

i) Reduce rents to tenants who have proven to have an income drop of more than 20%
compared to the income of the previous month or the same period of the previous
year, when the same results in an effort rate greater than 35% in relation to income;

ii) Exempt from rent payments, tenants who prove that they have ceased to receive any
income after March 1, 2020;

iii) Establishing moratorium to its tenants.

Communications
Tenants who are unable to pay the rent and who meet the above requirements, if they choose
not to use the support of the Institute of Housing and Urban Rehabilitation, IP, must inform
the landlord, in writing, up to five days before the due date of the first rent in which they
intend to benefit from the regime provided for in this Law, together with supporting
documentation of the situation.

In the case of rentals due on April 1, notification may be made up to 20 days after the date of
entry into force of this law.

Termination on the Tenant's initiative
In the event that the tenant ceases the housing or non-housing lease agreement on his own
initiative, before the 12-month period provided for payment of the deferred rent, it is
required, from the date of the termination, the immediate payment to the landlord of the due
and not paid rents, corresponding to that period.