Renewal action of lease contracts as a protection
Businessmen must use the Renewal Action of Lease established in Brazilian Law of General Leases to avoid unreasonable adjustments in the value of the rents, so they can protect their Goodwill.
In times of economic crisis, one of the most difficulties faced by businessmen is the rising lease price of places where their businesses are located, thus disrupting their investments.
Because of this fact, businessmen must use the Renewal Action of Lease established in Brazilian Law of General Leases to avoid unreasonable adjustments in the value of the rents, so they can protect their Goodwill.
According to this action, anyone who rents a commercial property, in general, can renew their Lease Contract for the same period as the one that was signed before, since these conditions are met: the contract must be signed through a written form and for a determined period where the accumulated amount of all contract period be at least 5 years. The tenant must also be exploring the same activity in the same area for at least 3 years continuously.
This is what establishes the article 51, of Law 8245/91, which refers to leases in general.
It is important to add that this action can be exercised by the rental assignees or successors interested in the business, including the under-tenant of the whole property.
This action must be exercised by whoever is interested in the renewal in at least, 6 months to 1 year maximum before the end of the contract in force, under the penalty of losing the right to this intended renewal.