Commercial Eviction in Brazil: Steps for Business Landlords

Renting out commercial property in Brazil requires a clear understanding of the 1991 Tenancy Law. Unlike residential leases, commercial leases (locação não residencial) have specific rules tailored to business continuity, most notably the tenant's right to compulsory renewal.

Brazil's landlord-tenant relationship is governed by Law No. 8.245/1991 (Lei do Inquilinato). For commercial landlords, understanding the distinctions between residential and non-residential provisions is essential to avoid costly legal disputes and successfully recover possession of your property.

Key Brazilian Commercial Rental Laws

Commercial Lease Terms and Renewals

The most critical aspect of commercial leasing in Brazil is the tenant's right to protect their business goodwill (ponto comercial).

Under Article 51, a commercial tenant has the right to a compulsory lease renewal (Ação Renovatória) if they meet three strict criteria:

1. The lease is in writing and for a fixed term.
2. The minimum term, or the sum of uninterrupted written terms, is at least five years.
3. The tenant has been operating the same trade or business for at least three uninterrupted years.

If the tenant files this action, the landlord can generally only deny the renewal if they need the property for their own business use (which cannot be in the same sector) or for mandatory government-ordered structural renovations.

Eviction Procedures (Ação de Despejo)

Landlords cannot arbitrarily evict commercial tenants; self-help evictions (like changing the locks) are strictly prohibited. The legal vehicle for recovery is the Ação de Despejo (Eviction Lawsuit).

Common grounds for commercial eviction include:

• Nonpayment of Rent: The tenant has 15 days from citation to pay the debt, interest, fines, and legal fees to avoid eviction (purgação da mora).
• End of Lease Term: Under Article 56, a fixed-term commercial lease ceases automatically at the end of the term. No prior notice is required.
• Indefinite Term: If the tenant remains in the property for more than 30 days after the fixed term ends without opposition from the landlord, the lease converts to an indefinite term. The landlord can then evict by giving a 30-day written notice (Article 57).
• Mutual Agreement: A written agreement to vacate the property within a minimum of 6 months.

Security Deposits (Caução)

The law prohibits landlords from demanding more than one type of guarantee (e.g., both a security deposit and a guarantor). If a cash deposit is used, it is limited to the equivalent of three months' rent and must be deposited in a savings account.

Rent Adjustments and Revisional Actions

Commercial rent is freely negotiated but cannot be tied to foreign currency or the minimum wage. It is typically adjusted annually based on an inflation index (like IGP-M). After three years, either party can file a "revisional action" to adjust the rent to fair market value if the contracted rent becomes disproportionate to the market rate.

Late Fees and Penalties

For late payments, the parties may agree on contractually stipulated fines and interest. If no specific fine is agreed upon, statutory rules from the Civil Code apply.

Getting Started with Compliance

Navigating commercial property rentals in Brazil requires careful contract drafting to manage renewal rights and eviction conditions. Landager helps landlords structure compliant inspection reports, manage security deposits safely, and handle rent adjustments flawlessly.

How Landager Helps

Landager tracks commercial lease terms, renewal deadlines, and automated rent reminders - making it easy to stay compliant with Brazil regulations.