Tenant Protections in Brazilian Lease Agreements

Brazilian law gives tenants with commercial and residential leases some protections if the owner wants to sell the property to a third party. However, there are still some steps you should take to further protect yourself.

According to Law No. 8.245/91, landlords must send written notice to tenants when they plan to sell a leased property. The notice needs to contain all details about the potential transaction, including the price, payment conditions and location where the proposed transaction documents will be available for the tenant to review.

The tenant then has thirty days before his right of preference expires to say whether he’ll purchase the property under the same terms. The clock starts after receipt of the notice, and within such period, the landlord would be free to proceed with the third party buyer only if the tenant has declined the offer.

Just expecting the owner to respect a tenant's right of preference can be risky though, right? That's why having the agreement in writing, adding a survival clause, and registering it with the local real estate notary office are all useful steps.

In short, registered contracts give notice to third parties that there's a lease in force on the property. Buyers will therefore know about the right of preference even if the owner doesn’t disclose it. In addition, the survival clause forces the new owner to maintain the lease.

So the next time you sign a lease in Brazil, make sure you take these three steps to protect yourself.