“Lifetime” contracts in Portugal, also known as Durable Real Right of Housing (DHD), are treated differently from traditional lease agreements. This regime was created to provide a stable and long-lasting housing solution, allowing tenants to reside in a property for life without the need to acquire it.
Characteristics of Durable Real Right of Housing (DHD)
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Nature of the Contract:
The DHD is a contract that grants the resident the right to reside for life in a property. This right is guaranteed through payment of an initial deposit and a monthly payment to the owner.
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Security and Stability:
This regime aims to offer an alternative to purchasing one’s own home or traditional rental, providing greater security and housing stability for families who do not have the means to acquire a house.
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Termination Conditions:
The resident may renounce the DHD at any time, provided they notify the owner with a minimum advance notice of 90 days. On the other hand, the owner can only terminate the contract in case of default by the resident or upon their death.
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Deposit and Monthly Payment:
The contract requires payment of an initial deposit, which may be returned in full or partially, depending on the resident’s length of stay in the property. In addition, the resident must pay an agreed monthly payment.
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Legal Impact:
This regime is distinct from traditional leases and was introduced by Decree-Law no. 1/2020 of January 9, reflecting a response to current housing needs and the socioeconomic conditions of Portuguese families.
Comparison with Contracts Prior to 1990
Lease agreements signed before 1990, often referred to as “lifetime”, have different characteristics. These contracts, due to legislative reforms, offer significant protection to tenants, many of whom are elderly, allowing them to maintain the property for long periods, often with controlled rents.
In summary, while traditional “lifetime” contracts refer to old leases with special protection, the DHD is a modern solution that offers lifetime housing security through a specific regime of deposit and monthly payment.