Security Deposits in Commercial Leases in Portugal

In the robust commercial real estate sector and leases dedicated to industries and retail commerce in mainland Portugal and the Islands, the paradigm regarding the collection and limit of monetary safeguards—primarily governed by the Portuguese Civil Code (effective since 1 June 1967) and the New Urban Leasing Regime (NRAU)—is strictly regulated by mandatory norms introduced by Law 56/2023 (Mais Habitação). While Article 1110 of the Civil Code establishes the principle of contractual freedom for non-residential leases, this freedom is expressly subject to the mandatory caps established in Article 1076, which entered into force on 7 October 2023.

Mandatory Maximum Caps for Commercial Leases

Instead of the previous flexibility, non-residential leases are now subject to the strict ceiling of 2 (two) months of rent for security deposits (caução), as established in Article 1076, n.º 2 of the Civil Code. This limit applies to all forms of security, including cash and bank guarantees (fiança bancária), intended to cover potential damages or breaches.

Under the specific regime for urban leases as amended by Law 56/2023, landlords are also restricted in the collection of advance rent. According to Article 1076, n.º 1, the payment of rent in advance is limited to a maximum of 2 months (reduced from the previous 3-month allowance). These caps are considered mandatory norms (normas imperativas) that override general contractual freedom, meaning any agreement requiring higher amounts is legally unenforceable.

Typical B2B Fiduciary Security Instruments

Given the enormous volume in bank flows, the usual Individual C.C or NIF Personal Guarantors give way to other corporately mitigated premises from the disadvantage of their organic bankruptcy or default, using:

1. The "On First Demand" Bank Guarantee (Garantia Bancária À Primeira Solicitação): An instrument issued by a credit institution that allows the landlord to unconditionally demand payment up to an agreed limit. The amount of such guarantees is subject to the mandatory 2-month rent limit established in Article 1076.
2. Mother-Company Corporate Guarantee (Aval Corporativo da Casa-Mãe): Where recourse is had to fiduciary corporate responsibilities from a parent company over the local Portuguese subsidiary (usually an "Lda") headquartered in the leased building.

Back to Portugal Commercial and Retail OverviewPreview unavailable.