Commercial Lease Rights and Obligations in Brazil
Direct Answer
Commercial leases in Brazil are governed by Lei 8.245/91 (the Tenant Law), which grants commercial tenants specific rights, including the ação renovatória for compulsory lease renewal. Tenants who have operated the same business for at least 3 years and hold a written lease with a minimum 5-year term have the right to renewal, even against the landlord’s will. The law also regulates rent adjustments, lease guarantees, improvements, eviction, and property repossession. Learn more about our business law services.
The Tenant Law and Commercial Leases
Lei 8.245/91 is the primary legislation on urban leases in Brazil. For non-residential (commercial) leases, the law establishes a specific regime in Articles 51 to 57, with emphasis on protecting the tenant’s goodwill (fundo de comércio).
Differences Between Residential and Commercial Leases
| Aspect | Residential | Commercial |
|---|---|---|
| Usual minimum term | 30 months | Minimum 5 years (renewal) |
| Automatic renewal | Yes (indefinite term) | No (requires ação renovatória) |
| No-cause eviction | After 30 months | After term expiration |
| Key money (luvas) | Uncommon | Common |
| Improvements | Compensable (necessary) | Per contract |
| Rent review | Every 3 years | Every 3 years |
Ação Renovatória: The Right to Renewal
The ação renovatória is the legal instrument that allows commercial tenants to obtain compulsory lease renewal, protecting the goodwill built during the tenancy.
Requirements (Article 51, Lei 8.245/91)
To file an ação renovatória, the tenant must meet all of the following:
- Written lease with a fixed term
- Minimum 5-year term (can be the sum of successive, uninterrupted contracts)
- Same business activity for at least 3 consecutive years
- Filed within the limitation period: between 1 year and 6 months before lease expiration Learn more about our business law services.
Filing Timeline
| Event | Deadline |
|---|---|
| Earliest filing date | 1 year before expiration |
| Latest filing date | 6 months before expiration |
| Right forfeiture | If not filed within the period |
Example: Lease expiring on 12/31/2026. The ação renovatória must be filed between 01/01/2026 and 06/30/2026. After 07/01/2026, the right expires.
Grounds for Opposing Renewal (Article 52)
The landlord may oppose renewal on the following grounds:
- Insufficient rent proposal from the tenant
- Better offer from a third party (tenant has the right to match)
- Substantial renovation required by public authorities
- Own use or for spouse, ascendant, or descendant
- Transfer of existing business operating for over 1 year
In cases of repossession, the tenant is entitled to compensation for loss of the commercial point.
Key Money (Luvas)
Key money (luvas) refers to amounts paid by the tenant to the landlord or previous tenant as consideration for the commercial location. They are not expressly regulated by law but are well-established practice.
Legal Nature
- Not to be confused with advance rent
- Represent the economic value of the commercial location
- Negotiable between parties
- Should be expressly stated in the contract
Common Situations
| Situation | Who Pays | To Whom |
|---|---|---|
| New lease at premium location | New tenant | Landlord |
| Lease assignment (trespasse) | Assignee | Outgoing tenant |
| Renewal with location appreciation | Tenant | Landlord (controversial) |
Rent Adjustment and Review
Annual Adjustment
The commercial lease must specify the annual adjustment index:
| Index | Characteristics |
|---|---|
| IGP-M (FGV) | Most common historically, higher volatility |
| IPCA (IBGE) | Official inflation, lower volatility |
| INPC (IBGE) | Less common in commercial leases |
| IPC-FIPE | Used in São Paulo |
Judicial Review (Article 19)
Every 3 years of lease duration, either party may request judicial rent review to adjust to market value:
- The landlord may seek an increase if rent is below market
- The tenant may seek a decrease if rent is above market
- The amount is determined by court-appointed expert appraisal
Percentage-of-Revenue Rent
Shopping center contracts frequently adopt:
- Minimum rent + percentage of gross revenue
- Promotion fund (mandatory contribution)
- Double rent in December (13th rent)
Lease Guarantees
The Tenant Law allows one single guarantee per contract (Article 37):
| Guarantee | Characteristics |
|---|---|
| Security deposit (caução) | Up to 3 months’ rent, deposited in savings account |
| Personal guaranty (fiança) | Guarantor owning real estate |
| Rental insurance | Policy contracted by the tenant |
| Fiduciary assignment | Investment fund shares |
Important: Requiring more than one guarantee simultaneously is prohibited. Cumulation is void.
Improvements (Benfeitorias)
Classification
| Type | Definition | Compensation |
|---|---|---|
| Necessary | Conservation or preventing deterioration | Always compensable |
| Useful | Improve or help with use | Compensable if authorized |
| Ornamental | Aesthetic or luxury | Not compensable (unless agreed) |
Waiver Clause
It is common in commercial contracts for the tenant to waive the right to compensation for improvements. The STJ has consolidated the understanding that this clause is valid in commercial contracts (unlike residential contracts, where it is considered abusive).
Commercial Eviction
Grounds for Eviction
| Ground | Legal Basis | Vacate Period |
|---|---|---|
| Non-payment | Article 9, III | 15 days (cure period) |
| Contractual breach | Article 9, II | 30 days |
| Breach of mutual agreement | Article 9, I | Per agreement |
| No-cause (indefinite term) | Article 57 | 30 days |
| Own-use repossession | Article 52 | 6 months |
| Substantial renovation | Article 52 | 6 months |
Curing Default
In eviction proceedings for non-payment, the tenant may cure the default (pay the debt) within 15 days of service of process, avoiding eviction. This right may be exercised only once within a 12-month period.
Summary Eviction
The judge may grant summary eviction (vacate within 15 days) when:
- The contract lacks a guarantee
- The guarantor notified exoneration and was not replaced
- The tenant has been in default for more than 3 months
Assignment and Sublease
Lease Assignment
Assignment fully transfers the tenant position to a third party:
- Requires landlord consent (unless contractually waived)
- Transfers all rights and obligations
- The assignee assumes the right to ação renovatória
Sublease
Subletting is permitted unless contractually prohibited:
- Total sublease requires express consent
- Partial sublease is admitted unless prohibited
- The subtenant has no right to ação renovatória against the original landlord
Shopping Center Leases
Shopping center leases have specific characteristics:
Typical Clauses
- Minimum rent + percentage of revenue
- Res sperata: amount paid to reserve the location
- Promotion fund: marketing contribution
- Operating hours: mandatory per regulations
- Business activity: exclusivity or restriction (tenant mix)
- Closure penalty: fine for non-operating days
Ação Renovatória in Shopping Centers
Shopping center tenants have the right to ação renovatória, provided they meet Article 51 requirements. The shopping center administrator cannot prevent renewal based on tenant mix.
Conclusion
Commercial leasing in Brazil involves complex legal relationships requiring attention from initial negotiation through contract termination. Protection of goodwill through the ação renovatória is one of the most important tenant rights, but its effectiveness depends on strict compliance with legal requirements and deadlines.
The assistance of an attorney specialized in real estate law is essential for drafting balanced contracts, timely exercise of the ação renovatória, and defense of both landlord and tenant rights. Contact ZS Advogados for a specialized consultation.
This article is for informational purposes only and does not constitute legal advice. Each case has specific circumstances that should be analyzed by a qualified attorney.
