November 30th, 2017

Rent extension without sponsor does not extinguish guarantee

Signing a contractual addendum between Landlord and Tenant without the sponsor that signed the original contract will not dismiss him or her from the guarantee until the return of the keys.
In a recent ruling by the Superior Court of Justice, The Third Group of Ministers of the Court, when giving the judgment of Special Appeal number 1.607.422 – SP from Minister Nancy Adrighi, decided that the guarantee in a rent contract remains valid until the return of the keys unless a contrary disposition exists.
The understanding resulted from the application of Article 39, Law 8245/91, that says: “Unless a contrary disposition in the contract, any rent guarantee will be extended until the effective return of the property even with rent is extended for unlimited time.”
However, contrary to the understanding presented by the referred judgment and to the disposition of Article 39 (Rent Law), according to Article 366 from Civil Legislation a renewal of the rent without sponsor authorization does not dismiss him or her of obligations.
In view of these dispositions, it is possible to establish that, with legal dispositions towards alterations in contractual conditions by dismissing obligations previously adjusted, the sponsor would be released from guaranteeing a new obligation, according to the application of Article 366 from Civil Legislation. Specifically, for realty rents this rule would be applicable.
This is due to the Norms Specialty Principle, where a specific norm that refers to a subject that is being discussed, must prevail upon a general norm.  In this case, the application of Article 39 from Rent Law is imperative prevailing upon the disposition of the Civil Legislation, this way assuring that even if the sponsor did not authorize the rent contract extension, he or she will be linked to that contract until return of the keys.

On the other hand, Article 835 from Civil Code, mentioned in the referred judgment, establishes that if the guarantee was given for unlimited time, the sponsor may require dismissal since he or she notifies this intention with 60 days in advance.

Thus, in order for the sponsor to be dismissed of a certain obligation, when contract is for unlimited time, and with the possibility of renewal with his or her authorization, it is mandatory that the sponsor requires the dismissal upon a referred notification.

When the contract is for a limited time, it is suggested that, in order for the guarantee obligation not to be remain, a clause be inserted determining an automatic guarantee extinction in case of renewal or contract alteration.  This would meet the disposition of Article 39 from the Rent Law.