Subletting a Real Estate in Brazil
Subletting or subleasing real estate is a common practice in most countries around the world, but in Brazil this practice is not necessarily so common and widely accepted. We will cover in this article aspects related to the subletting of offices and residential real estate.
Subletting practice in Brazil
Subletting, or sublocação in Portuguese, has been a controversial subject in Brazil for a long time, especially because subletting arrangements are often performed without the necessary legal base, there are even cases where both the original tenant and subtenants are not aware that they are breaching the law.
According to tenancy law, also known as Lei do Inquilinato, total or partial subletting is allowed in Brazil, but the practice is only legal with the landlord’s consent. What causes the illegal practice to be so widespread is that most standard rental agreements used by real estate agents prohibit subletting of not only the property, but also other areas attached to properties like parking spaces.
In reality, most cases of illegal subletting are never reported by neighbours or uncovered by real estate agents or landlords. This practice is often discovered by the agent or landlord only when there are complaints from the neighbours regarding the behaviour of the original tenant or subtenant. In order to conceal this illegal practice, tenants often don’t want to sign subletting agreements nor accept payments by wire transfer or cheques.
Consequences of illegal subletting
When the landlord or the real estate agent discover that subletting is taking place, some measures will be taken to protect the landlord. In this case both the original tenant and subtenants may be subject to punishment which are often:
- Termination of the rental agreement
- Contractual fines related to early termination of the agreement
- Eviction proceedings of the original tenant and subtenants
All compensation related to illegal subletting or possible damages caused by the subtenant to the property may, in most cases, still be the responsibility of the original tenant. The same goes for any unauthorized modifications performed by the subtenant.
How to sublet legally
Even if the rental agreement is already signed, it is possible for the tenant to request the authorization to sublet the property from the owner or the real estate agent that was responsible for managing the agreement. In this case the request may be accepted or denied.
If you are the original tenant planning to sublet, here are a few important points to keep in mind:
- The landlord of the property must be in accordance with the subletting practice. It is totally inadmissible to sublet anything without the landlord’s authorization
- An amendment to the rental agreement highlighting that the subtenant will be responsible for the payment of the rent to the landlord must be signed, in cases where the entire property is sublet
- You will lose the preference rights to renew the rental agreement of the property, and the renewal possibility will be offered to the subtenant first
- The subletting period cannot be longer or the same as the rental agreement signed with the tenant
If you are going to sublet a property and become a subtenant, here is some important information:
- Make sure that the rental agreement includes the activity you plan to conduct in the property
- If the original tenant is defaulting, you can both be evicted from the property. In this case there are two alternatives: either the subtenant pays any debt due, or both (tenant and subtenant) must leave the property
- If the original tenant wants to end the contract with the landlord before the termination date, you are automatically required to leave the property without any prior communication