Selling a Property with a Tenant in Portugal: Rules, Risks and Buyer Impact

Yes, you can sell a property with a tenant in Portugal. However, the sale does not normally end the tenancy. The buyer usually becomes the new landlord and must respect the existing lease, including its rent, duration, renewal conditions and any legal protections held by the tenant.

For the seller, the most important questions are not simply whether the property can be sold, but whether the tenant has a right of first refusal, whether vacant possession can legally be promised, how old the lease is and how the tenancy affects the property’s market value.

At RE/MAX Cidadela, we have worked with property owners in Cascais and Greater Lisbon since 2004. In practice, the date and conditions of the lease can change the likely buyer, the negotiation strategy and, sometimes, the achievable sale price.

Quick Summary

• A tenanted property can be sold in Portugal, but the sale does not normally terminate the lease.
• The buyer generally succeeds to the landlord’s rights and obligations under the existing contract.
• A tenant who has rented the property for more than two years may have a legal right of first refusal.
• The tenant normally has 30 days from receipt of the formal notice to exercise that right.
• Residential leases signed before 18 November 1990 may be subject to special transitional rules and additional tenant protections.
• Vacant possession should never be advertised or promised unless the lease has lawfully ended or the tenant has agreed to leave.
• The effect on value depends mainly on the rent, contract date, duration, tenant profile and target buyer.

Can You Sell a Property with a Tenant in Portugal?

A landlord does not normally need the tenant's permission to sell the property. Ownership may be transferred while the lease remains in force, following the same general process and timeline for selling a property in Portugal, with some additional steps specific to tenanted properties.

Article 1057 of the Portuguese Civil Code provides that the person who acquires the right on which the lease is based succeeds to the landlord’s rights and obligations, subject to the applicable registration rules. In practical terms, the buyer takes over the existing landlord position.

The sale itself therefore does not allow the seller or buyer to remove the tenant. The new owner cannot automatically increase the rent to market level, replace the contract or demand that the tenant leave merely because the property has changed hands.

The buyer must first understand what is being acquired:

• the property with the lease continuing;
• the property with a lease that will lawfully end before completion; or
• the property with vacant possession under a valid written agreement with the tenant.

These are three different transactions and should not be marketed as though they were interchangeable.

Does the Lease Continue After the Sale?

In most ordinary sales, the lease continues under the same essential conditions. The buyer becomes responsible for the landlord’s obligations and is entitled to receive the rent from the agreed transfer date.

After completion, the tenant should be informed of the change of ownership and given the new landlord’s identification and payment details. The parties should also clarify how any deposit, prepaid rent or outstanding amounts are being treated.

The seller should provide the buyer with the complete tenancy file rather than only the original contract. Rent-update notices, extensions, renewal communications and agreements made after the initial lease may be just as important as the original document.

A buyer who intends to live in the property should not assume that becoming the owner creates an immediate right to vacant possession. Any termination must follow the rules applicable to that specific contract.

Does the Tenant Have a Right of First Refusal?

One of the most important stages in selling a tenanted property is determining whether the tenant has a legal right of first refusal, known in Portugal as the direito de preferência.

Under Article 1091 of the Portuguese Civil Code, a tenant may have the right to purchase the rented property ahead of a third-party buyer when the property has been rented for more than two years. The tenant must be given the opportunity to purchase under the same essential price and conditions offered to the other buyer.

This right commonly applies when the rented property is legally autonomous, such as an apartment registered as an individual condominium fraction.

More complex questions arise when the lease concerns only part of a building that has not been divided into autonomous units. A 2020 Constitutional Court decision declared the special proportional co-ownership mechanism previously contained in Article 1091(8) unconstitutional with generally binding force. These cases should therefore be reviewed individually by a Portuguese lawyer rather than treated in the same way as the sale of an autonomous apartment.

What Must the Preference Notice Include?

The seller must communicate the proposed transaction and the essential contractual conditions clearly enough for the tenant to decide whether to purchase on equivalent terms.

The notice should normally identify:

• the property being sold;
• the agreed sale price;
• the payment conditions;
• any deposit or staged payments;
• relevant conditions attached to the transaction;
• the expected completion arrangements; and
• other terms that could materially affect the tenant’s decision.

Article 1091 requires the communication to be sent by registered letter with acknowledgement of receipt. The tenant normally has 30 days from receipt of that communication to respond.

The preference procedure should be coordinated with the proposed sale documentation. In some transactions, a promissory purchase and sale agreement, or CPCV, is signed subject to the tenant not exercising the preference. The correct sequence depends on the deal structure and should be confirmed by the lawyer or solicitor managing the transaction.

The decisive point is that the definitive sale must not proceed in a way that ignores a valid tenant preference right.

What Happens If the Tenant Is Not Notified?

Failure to respect a valid right of preference can place the completed sale at risk.

A tenant whose right was ignored may bring a preference action seeking to take the buyer’s position in the transaction. In general, the action must be brought within six months of the tenant becoming aware of the essential elements of the completed sale. The claimant must also deposit the relevant price within the legally required period following the start of the action.

From the buyer’s perspective, this means that preference compliance is not a minor administrative matter. The buyer’s legal adviser may request:

• a copy of the notice sent to the tenant;
• proof of delivery;
• evidence of the tenant’s response or non-response;
• confirmation of the relevant dates; and
• confirmation that the completed transaction uses the same essential terms communicated to the tenant.

If the final transaction becomes more favourable to the third-party buyer than the terms previously presented to the tenant, the preference procedure may need to be reconsidered.

Can the Property Be Sold with Vacant Possession?

A property should only be marketed as available with vacant possession when there is a reliable legal basis for that statement.

Vacant possession may be possible when:

• the lease has already ended lawfully;
• a valid notice of non-renewal or termination has taken effect;
• a court or legally effective procedure has resulted in termination;
• the tenant has voluntarily agreed in writing to leave; or
• completion is contractually delayed until the property is lawfully vacated.

The fact that a fixed-term lease has an end date does not always mean the property will automatically become vacant on that date. Renewal provisions, statutory notice periods and communications between the parties must be checked.

Similarly, a seller should not assume that the tenant will leave because a sale is planned. A verbal expression of willingness is not equivalent to a properly documented agreement.

Where the tenant agrees to terminate the lease voluntarily, the agreement should address the departure date, handover condition, keys, rent, deposit, utility bills and any agreed compensation. Independent legal advice is advisable, particularly where the sale depends on the tenant leaving before completion.

Old Leases Signed Before 1990

Residential contracts signed before 18 November 1990 require particular attention.

These leases may remain subject to transitional provisions under the NRAU and can differ considerably from modern fixed-term contracts. Depending on the circumstances, they may involve rents substantially below current market levels, more restrictive termination rules and additional protections connected to the tenant’s income, age or disability.

The Portuguese housing authorities specifically identify protections concerning financial hardship, tenants aged 65 or over and tenants with a proven disability of at least 60% in the context of older residential contracts.

Following the 2023 housing legislation, certain pre-1990 residential contracts covered by Articles 35 and 36 of the NRAU do not transition into the general NRAU regime. Decree-Law 132/2023 also created a compensation mechanism for qualifying landlords where the protected rent falls below the applicable statutory reference.

This does not mean that every contract signed before 1990 has identical conditions. The legal position depends on factors including:

• the original contract;
• whether it is residential or non-residential;
• subsequent amendments;
• rent-update procedures already carried out;
• the tenant’s formally documented circumstances;
• succession or transmission of the tenancy; and
• any judicial or extrajudicial notices already issued.

The complete history must therefore be reviewed before deciding how the property should be priced or marketed.

How Does a Tenant Affect the Property’s Value?

A sitting tenant does not automatically make a property less valuable. The effect depends on the lease and on the type of buyer being targeted.

A recent contract at a market-level rent with a reliable payment history may be attractive to an investor. The buyer receives income immediately and avoids an initial vacancy period.

The situation is different when the rent is far below market level, the contract has no near-term route to termination or the buyer wishes to occupy the property personally.

The correct comparison is not simply between the tenanted property and the asking prices of vacant homes in the same area. The analysis should also consider the inherited rent, expected yield, duration of the tenancy, cost of ownership and probability of obtaining vacant possession.

Valuing a tenanted property requires more than comparing asking prices. The analysis may combine recent comparable sales with the property’s actual rental income, lease conditions and expected investor return. Learn more in our guide on how to value a house in Portugal

An unrealistic asking price based on vacant comparable properties can leave a tenanted property on the market for months. However, automatically applying a large discount without analysing the lease can also undervalue a good investment asset.

Can the Landlord Arrange Property Viewings?

The landlord should not assume an unrestricted right to bring prospective buyers into the tenant’s home.

Portuguese law requires the tenant to allow the landlord to examine the rented property, but the courts have distinguished an inspection by the landlord from visits by third-party buyers. A 2023 Court of Appeal decision concluded that the statutory duty to permit examination of the property did not, by itself, create a general obligation to allow visits by prospective purchasers.

The safest practical approach is therefore to agree viewing arrangements with the tenant in advance. The agreement may cover:

• permitted days and times;
• minimum notice;
• maximum frequency;
• whether the tenant will be present;
• photography and video;
• treatment of personal belongings; and
• cancellation procedures.

A cooperative tenant can make the sale significantly easier. Excessive pressure, unannounced visits or entering without permission can damage the relationship and create unnecessary legal conflict.

Documents Needed to Sell a Tenanted Property

In addition to the normal property-sale documents, the seller should prepare a complete tenancy file.

For the certificates, registrations and property records required in a standard transaction, see our complete guide to the documents required to sell a property in Portugal.

This normally includes:

• the original lease and all amendments;
• evidence that the lease was reported to the Portuguese Tax Authority;
• rent receipts and payment history;
• evidence of the current rent;
• annual rent-update communications;
• renewal, non-renewal or termination notices;
• information about the deposit;
• agreements concerning works or expenses;
• court proceedings or formal disputes;
• proof of any tenant preference notice;
• written agreements concerning vacant possession; and
• relevant communications that changed the contract’s practical operation.

The seller will also usually need the standard property documents, including the land registry certificate, tax registration document, energy certificate, use licence where applicable, technical housing file where required and condominium documentation.

Problems should be identified before the property is advertised. Discovering during due diligence that the contract date is unclear, the rent history is incomplete or the tenant was not correctly notified can delay the transaction or weaken the seller’s negotiating position.

What Should Buyers Check?

A buyer considering a tenanted property should review both the property and the income-producing contract.

Important questions include:

• When was the lease signed?
• Is it residential or non-residential?
• Is it fixed-term or open-ended?
• What is the current rent?
• Has the tenant paid consistently?
• How and when can the rent be updated?
• Can the contract renew automatically?
• Have any termination notices been issued?
• Does the tenant have a right of first refusal?
• Are there protected circumstances relevant to an older lease?
• Is the buyer purchasing for investment or personal occupation?

The buyer should calculate the return using the actual inherited rent, not the rent that might theoretically be charged if the property were empty.

Where vacant possession is essential, completion should not rely on an assumption that the new owner will be able to remove the tenant quickly after buying.

Common Mistakes When Selling with a Tenant

The most expensive mistakes are often made before the property reaches the market.

One is pricing the home as though it were already empty. Another is promising vacant possession without checking the lease. Sellers also create risk by concealing an old contract, failing to document rent updates, changing the transaction terms after notifying the tenant or assuming that a friendly verbal arrangement will be sufficient.

A further mistake is presenting the property to the wrong audience. A tenanted apartment producing a strong market rent should be presented as an investment. A property occupied under a low-rent protected contract requires a different valuation, buyer profile and negotiation strategy.

The lease is not a secondary attachment to the sale. It is part of what the buyer is acquiring.

Frequently Asked Questions

Can a landlord sell a property without the tenant’s permission?

Generally, yes. The tenant’s consent is not normally required for the transfer of ownership. However, the sale does not usually terminate the lease, and any applicable right of first refusal must be respected.

How long does the tenant have to exercise the right of preference?

The tenant normally has 30 days from receiving the registered notice with acknowledgement of receipt. The notice must disclose the essential terms of the proposed transaction.

Can the new owner evict the tenant after buying?

Not merely because the property was purchased. The buyer inherits the landlord position and must rely on a valid contractual or statutory ground for termination.

Can the seller increase the rent before selling?

Only in accordance with the contract and applicable law. The seller cannot simply replace the existing rent with the current market rent because a sale is planned.

Is a pre-1990 lease impossible to terminate?

Not necessarily. However, the legal options may be more restricted and depend on the contract, the tenant’s circumstances and the procedure being considered. A specialist legal review is essential.

Is it better to sell the property empty?

Not always. A vacant property normally appeals to a wider group of buyers, including owner-occupiers. However, a property with a good tenant and a market-level rent may be more attractive to an investor.

Does the tenant have to allow buyer visits?

There is no general unrestricted right to bring prospective buyers into the tenant’s home. Viewing arrangements should be agreed with the tenant, taking account of the lease and the tenant’s right to enjoy the property.

Conclusion: Review the Lease Before Setting the Price

Selling a tenanted property in Portugal is possible, but the lease must be treated as a central part of the transaction.

Before setting the asking price, the seller should confirm the contract date, rent, renewal conditions, termination history, tenant protections, preference rights and likelihood of vacant possession. These factors determine whether the property should be marketed primarily to investors or to the wider residential market.

A recent lease at a strong rent may add investment value. An old, low-rent or legally protected contract may reduce flexibility and require a more specialised sale strategy. Neither situation should be evaluated without reviewing the actual documents.

Planning to Sell a Tenanted Property in Portugal?

A tenant, an old lease or a below-market rent can significantly affect your property’s value, buyer profile and sale strategy. Request a professional valuation from RE/MAX Cidadela and understand how the existing lease may influence the price before placing the property on the market.

Request a Free Property Valuation

RE/MAX Cidadela can help you analyse the property’s market position, identify the most suitable buyer profile and prepare a sale strategy for Cascais, Lisbon, Oeiras or Sintra. Request a professional property valuation before deciding the price or making commitments concerning vacant possession.

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👤About the Author

By Pedro Pettermann
Pedro Pettermann is a Broker at RE/MAX Cidadela in Cascais, with over 20 years of experience in the real estate market across the Cascais coastline, Lisbon, Oeiras, and Sintra. With an MBA from IE Business School, he combines strategic vision with deep local expertise. Recognized as a specialist in the real estate market, mortgage financing, and digital marketing, he helps owners and buyers make confident and profitable decisions.

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At RE/MAX Cidadela, we have already helped more than 4,800 families successfully sell or buy the home of their dreams