Decreto-Lei n.º 69/2019
- Emissor:Presidência do Conselho de Ministros
- Entidade Proponente:Ambiente e Transição Energética
- Tipo de Diploma:Decreto-Lei
- Páginas:2553 - 2557
Summary in plain english (Without legal value)
What is it?
This decree-law creates a set of rental insurances for the Affordable Renting Programme (Programa de Arrendamento Acessível - PAA).
What is going to change?
Rental contracts within the PAA will require insurance for the the following risks:
- Default of rental payment
- Involuntary loss of the tenant’s income;
- Damage to the property.
The contracting of the first guarantee is due to the landlord, the remaining are due to the tenants. University students and trainees without personal income are not required to hire these insurances.
What are these insurances for?
These insurances promote security in the rental contract, allowing to:
- Maintain the rental income of the landlord in case of contract termination due to default of payment by the tenants;
- Maintain rental payment in case of involuntary loss of income by the tenants (death, disability or unemployment of one of the tenants);
- Pay an indemnity for eventual damage to the property verified at the end of contract.
The existence of these insurances will prevent the need for Guarantors or warranty deposits. Although, the insurance that covers Damage to the property, can be replaced by a warranty deposit that cannot be higher than 2 months of the contracted rent.
How to can these insurances be identified?
These insurances have a specific legal designation: “Affordable Renting Insurance” and comply with the mandatory insurances scheme: only insurance agreements in which the general conditions have been authorized by the Insurances and Pension Funds Supervisory Authority will be admitted in the PAA. The approved insurances are disclosed on the website of the PAA’s managing entity.
The “Affordable Renting Insurance” contract must comply with the legal minimum requirements (e.g., minimum capital, waiting period, admissible exclusions, claim reporting documents, etc.).
The insurance companies may propose wider coverage policies, provided the compliance with the legal minimum requirements and the right of option for insurances limited to the minimum requirements.
What happens if the rental agreement parties fail to contract the mandatory insurances?
The contracting of the affordable renting insurances is a condition of access to the benefits of the Affordable Renting Programme: the tax exemption for landlords and the reduction of the rent for the tenants.
Failing to keep the insurance contract and/or lack of payment of the insurance are considered as a default under the PAA and lead to penalties, such as the loss of benefits and exclusion from the program.
The same happens if the parties prevent the verification of a situation when the payment of the insurance’s indemnity does not occur.
How to ensure that the insurance’s indemnity is paid in due time?
The insurance’s payment must be carried out within 30 days after the submission of the claim documents.
If the indemnity is later found ungrounded, the payment must be returned.
What advantages does it bring?
This decree-law reinforces security in the rental agreements under the PAA, both for landlords and tenants, enhancing the effect of this program on affordable renting supply.
Besides, this decree-law lays ground work for the development of a general rental insurance market, increasing security in the rental market.
When does it enter into force?
This decree-law enters into force on 1 July 2019.