Terminating a rental agreement can be difficult, as it means an early termination of the agreement. Know what you should consider.
The termination of a rental agreement deserves special attention. Many still have doubts about how to proceed and what to consider in this situation and what is in the legislation in case of termination of the lease.
The first thing to do is to confirm what was agreed/agreed in the rental agreement. This is because it is he who determines the rules and how to proceed in the right way at this time. In the contract, find the clauses that inform about the fines, terms and conditions for vacating the property.
In this case, it is essential that the owners know how to proceed. After all, the termination of the lease requires some important precautions, as well as the fulfillment of some legal and bureaucratic procedures for it to be valid.
In this article, you will learn how the landlord and tenant should proceed and the legal aspects that involve the termination of the rental agreement.
Termination of rental agreement by the lessor
According to LAW 8.245 / 91 (tenant law), the owner of the rental property, that is, the lessor, cannot request early termination of the rental agreement unless he has a “full complaint”. But after all, what is this?
Full denunciations are understood:
- Mutual agreement (both agree that closing the contract is the best way)
- Occurrence of legal or contractual infraction; (for example: practicing illegal activities inside the property)
- For non-payment of rent and/or rental charges
- Due to the need to carry out urgent repairs determined by the Government, which cannot normally be carried out with the lessee remaining in the property or, if he can, he refuses to consent to them (art. 9);
- For your own use, that of your spouse or partner, or residential use of ascendant or descendant that you do not have, as well as your spouse or partner, with your own residential property;
- If there is an interest or need for demolition and licensed building or for the performance of works approved by the Government, that increase the built area by at least twenty percent or, if the property is intended for the operation of a hotel or pension, in fifty per cent;
- If the lease remains uninterrupted for more than five years.
In view of these situations presented above, in rents signed for 30 months or more, the lessor who takes over the property only pays a fine if the obligation is recorded in the lease agreement.
Below is a model of the lease agreement termination by the lessor. For the lessor to send to the lessee requesting that the contract not be renewed (remember to send the notification 30 days in advance).
NOTIFICATION OF NON-RENEWAL OF RENTAL AGREEMENT
Curitiba, May 3, 2021.
Dear <name of lessee>, holder of CPF of number <number of CPF of lessee>, I inform that the LESSOR <name of lessor>, holder of CPF of number <number of CPF of lessor>, I, owner of the property located in Rua <property address>, leased to you by contract, formalized on <date of signature of the contract>, with closing date on <closing date>, has no interest in renewing it for a period after its closing.
Thus, I inform you that at the latest on <closing date> the property in question must be properly vacated, under penalty of filing the eviction action, as provided by Law No. 8245/1991.
I also inform you that the expenses related to the lease of the property, continue to be due under the same conditions set out in the contract until the end of the lease and the definitive delivery of the keys and closing of the contract.
<name of owner>
Termination of rental agreement by tenant (tenant)
The lessee can return the property, regardless of reason, at any time of the lease, notifying the owner 30 days in advance (for most contracts) and paying the fine agreed in the contract. The notification for delivery of the property can be something simple, we have a model below:
Rental agreement cancellation notification template by the lessee:
RENTAL CONTRACT TERMINATION NOTIFICATION
I inform that I will deliver the property leased by me, located at <Address of the complete property> until the day ______ / ______ / ______ (minimum 30 days), as provided for in the contract and by Law no. 8.245 / 91 art. 06, par. Single. I am aware that if this period is extended, I will have to renew this notification, under penalty of not doing so, having to pay the amount corresponding to 30 (thirty) days of rent, after the return of the keys. I am also aware that the rents must be paid until the date of the effective delivery of the property keys, the documents required to terminate the contract.
REASON FOR EXEMPTION (Optional)
Termination of rental agreement with determined validity
When the lease agreement has an indefinite validity, both parties may request the termination of the lease at any time, without any justification and there is no implication of the fine. Notification of the need for change must be made at least 30 days in advance.
It is worth remembering that for a contract to have its indefinite validity, leases of 30 months or more, after the stipulated term has expired.
Termination of the rental agreement before the deadline
Before the term stipulated in the contract, termination provides for a fine. As we mentioned at the beginning of the text, it is always valid to check what your contract says about it. There are contracts in which the fine is 3x the rental amount, in others the fine is calculated on the number of rental months that are still to be “used”. This fine is regulated by art. 4th of the tenancy mentioned below:
“Art. 4th. during the term stipulated for the duration of the contract, the landlord cannot recover the rented property. With the exception of what is stipulated in § 2 of art. 54-A, the lessee, however, may return it, paying the agreed fine, proportional to the period of performance of the contract, or, failing that, the judicially stipulated. (Wording given by Law No. 12,744, of 2012) ”
Termination of the fine rental agreement
The fine may not be imposed on some occasions. As, for example, when the reason for returning is job transfer, as mentioned in clause 4, of the tenant law.
Another occasion that the fine cannot be applied is when the reason is that the construction has structural or maintenance problems that precede the closing of the contract.
The lease termination penalty clause must be present in every contract. When the tenant leaves the property before the end of the contract, the fine is applied as mentioned in the item above (termination of the contract before the deadline). By law, fines for terminating a rental agreement are capped at 10% of the total contract value. That is, in a 30-month contract, the fine ceiling would be the value of 3 months’ rent.
Remember to analyze your contract and check the implicit fine. The model of rental agreement used in Zimobi provides for a duration of 30 months with a clause where you can leave from, for example, 12 months without paying a fine.
Fine for early termination of rental agreement – how to calculate.
Let’s take a practical example to show the reasoning:
Eduardo (lessee) signs a lease agreement with Sofia (lessee) for the amount of R $ 1000.00 for a period of 24 months. They agreed on a fine for three months of rent (R $ 3000.00).
After 12 months of the contract, Eduardo decides to leave the property, with 12 months remaining until the end of the term of the contract.
To calculate the FINE you need to divide the amount of the fine by the term established in the contract (24 months):
R $ 3,000.00 / 24 months = R $ 125.00.
This is the amount of the fine per month. Now you must calculate the number of months that the contract was not fulfilled and multiply by the amount of the monthly fine.
24 months x $ 125.00 = $ 3000.00.
With this calculation, you will have the amount of the fine for “early breach of contract” (termination of rental agreement before the deadline) of the lease. As noted in the example above, the calculation was carried out proportionally, as determined by the relevant legislation.
Rental termination in the pandemic
For the termination of the rental agreement during the COVID pandemic, there are no changes in the application of the fine or in the amount, what exists is the optional flexibility. It is often better to terminate the contract than to be in default or without receiving the rent.
The loss of income due to the social isolation necessary to prevent the spread of the Corona virus brought with it a major economic crisis. Many people who live on rent and have lost their jobs or have had their income reduced have asked the property owners to negotiate the amount charged for rent. There are legal arguments, consolidated in the Civil Code, which mention that situations not foreseen in the signing of a contract (such as a worldwide pandemic), make it fair that they are changed, aiming to regain the balance between the parties and excessive burdens.
So, in view of the situation, the recommendation is flexible by the owner, if he wishes, he can waive the fine for the termination of an early lease or accept to receive it in installments.
What documents are required to terminate the contract?
In order to terminate a contract, it is essential to present some standard documents.
It is of utmost importance to request / present proof of discharge of charges and termination of service provision such as:
- Water bill;
- Electricity bill;
- Condominium fee.
In addition, for delivery, it is necessary to carry out an inspection of the property to make sure that its maintenance and conservation conditions are equal to its state before being occupied by the landlord.
And, of course, the proof of payment of the fine (if it is due) and the term of termination of the contract.
Lease agreement (rental) model
To facilitate your contract termination process, we provide the model below. It is always worth remembering that each case needs to be analyzed individually. We hope this post has helped you.
LEASE CONTRACT DISTRACT
By this particular instrument, (name) …………., (Nationality) ………., (Profession) ………., (Marital status) ………., Bearer of RG nº ……………., registered with the CPF under the number ………………… .., (name and qualification of the spouse, if any), resident (s) and domiciled (s) at Rua ……………………………., nº… .., Bairro ……………, State of ……., hereinafter simply called LESSOR, and (name) …………., (nationality) ………., (profession) ………., (marital status) ………., bearer of RG number ……………., registered with the CPF under number ………………… .., (name and qualification of the spouse, if any), resident (s ) and domiciled at Rua ……………………………., nº… .., Neighborhood ……………, State of …… .., hereinafter simply called LESSEE, have each other as fair and hired the following:
- The parties signed each other on…. of …………… of ……, Private Lease Instrument, when they agreed on the lease ……. (Residential/commercial) of the property (description of the property as stated in the contract) ………………………………, for the period of ……. (……………) (Months/years), starting on….. On ………………… on ……. and ending on….. Of ……………….. Of …….
- There being no further interest on the part of the contracting parties to maintain that lease agreement, they decided, by mutual agreement, to terminate it on this date, under the following conditions: (clarify whether the parties are even or not and, in the latter case, the way, payment, compensation for improvements, repair of damages, etc….) …………
- (If there are still reforms to be made to the property or pending payments, it can be stipulated: On the date of the definitive delivery of the keys, the LESSOR shall give the LESSEE full, general and irrevocable discharge, for nothing more to claim due to the terminated contract, at any time, whatever the title).
- By virtue of this termination, the LESSOR will be able to give the property the destination it chooses.
- From this date (or the date of the definitive delivery of the keys), Mr. ……………, as guarantor, is exonerated from the responsibility assumed in the contract that is now being terminated.
- The district court is elected on ………………../ (UF) to settle any dispute arising from this termination.
Thus, the present instrument is signed in …… (…………) copies of the same content, in the presence of the witnesses below.
Place and date: _____________, ____/____/_____
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