Portugal

These questions concern the lease of agricultural land governed by the Law on Agricultural Lease which covers the lease of a farm for the cultivation of crops or the farming of livestock (art. 2(1)). The lease pertains to the soil, the permanent vegetation on the soil and the buildings exploited either as residence or for other agricultural purposes (art. 4). Unless parties agree otherwise, the lease does not include timber, forest trees, cork produced by existing cork trees on the land or any other structures or produce on the land that are not normally exploited by a tenant for agricultural purposes or as the tenant’s residence.

The agricultural tenant is under an obligation to return the property in the same state as he received it (Decree-Law 294/2009, art. 22(1)). The tenant is not allowed to affect the productivity, substance or the economic and social functions of the property, and his/her processes of cultivation may not prejudice the productivity of the property (art. 21(1)). The tenant is therefore only allowed to prune trees, remove dead branches from fruit and decorative trees and shrubs and clear undergrowth. The landlord is entitled to claim compensation for damage caused to the property through the tenant’s fault or as a result of the non-compliance with his/her duties as an agricultural tenant.

The tenant under an agricultural lease is not entitled to open mines or work existing mines or quarries. He/she cannot prevent the landlord from carrying out works necessary to ensure that the normal production of the land is continued after termination of the lease during the final year of the lease (Decree-Law 294/2009, art. 22(1) and (4). The tenant is, however, entitled to harvest crops standing on the land when the lease expires and is allowed to enter the land when the crops are ripe to harvest them (art. 38(2)). The new farmer (a new tenant or the former landlord) cannot prevent the harvest and collection of the standing crops.

The agricultural tenant is not permitted to assign his/her right or to create a further limited right over the property. Consequently, the agricultural tenant is not entitled to sub-let the land without the consent of the landlord (art. 10). If the tenant does sub-let with the consent of the landlord, the tenant is entitled to the proceeds. There are, however, restrictions on the amount of rent that the tenant can charge, namely not more than 20 per cent more than the rent he/she pays without the consent of the principal landlord (Civil Code, art. 1062). If the tenant, for example, pays rent of 1,000 Euros, and then sub-lets the farm, he/she cannot charge more than 1,200 Euros without the consent of the principal

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landlord. It must be noted that the sub-lease expires with the termination of the principal lease. The question regarding the proportionate division of an annual rent will thus not arise.

In the case of usufruct, the usufructuary has the right to use and enjoy the fruits of the property without impairing its form or substance. He/ she must exploit the property like a bonus paterfamilias and in accordance with its economic destination (Civil Code, art. 1446). This test must be applied in the exploitation of the property.

A usufructuary is entitled to the natural and civil fruits of the farm. Plantations that are destined to be felled are considered fruits and the usufructuary is therefore entitled to cut an appropriate amount of wood and clear undergrowth in the ordinary course of husbandry. He/she must exploit the plantation in the same way as in the past or according to the customs prevailing in the community (Civil Code, art. 1455). Since fruit trees, decorative trees and shrubs are not exploited ordinarily by cutting them down, the usufructuary is not allowed to remove them, for example, to be used as firewood. Moreover, the usufructuary has a duty to return the property without impairment of its substance. He/she therefore has a duty to replace cut plantation trees and dead fruit or decorative trees (Civil Code, art. 1453, no. 2).

Decree-Law 270/2001 of 6 October establishes a specific regime for the exploitation of quarries and mines. A concession to search for minerals (Decree-Law 270/2001, arts. 20 ff.) and to prospect for mineral resources (Decree-Law 270/2001, art. 27) is needed to open quarries and mines. The owner, or the person with whom he/she had concluded a search and prospecting contract or only a prospecting contract, is entitled to obtain such a concession (Decree-Law 270/2001, art. 10 no 1). This contract must be executed in a public deed (Decree-Law 270/2001, art. 12 no 2) and must specify the annual compensation to be paid to the owner (Decree-Law 270/2001, art. 14).

Under Portuguese law, fruits are the natural periodic produce of property without the impairment of its substance (Civil Code, art. 212). Minerals and stones are not considered to be natural fruits. However, if the owner has concluded a contract with a third person to mine or quarry existing mines or quarries, the usufructuary (and not the nude owner) is entitled to collect the income from the mining or quarrying operations for the duration of the usufruct (Civil Code, art. 1457 no. 2). The consent of the nude owner is required should the usufructuary wish to open new mines or quarries (Civil Code, art. 1458). Otherwise, a usufructuary is only entitled to take stone from the soil to

carry out repairs and works on the property for which he/she is responsible. A usufruct can be created over a concession obtained for the search and prospecting of minerals. In that case, the usufructuary has the right to exploit existing mines or quarries according to the practice of the owner (Civil Code, art. 1457 no. 1).

As a general rule, the usufructuary only acquires natural fruits on actual collection of the fruits (Civil Code, art. 213). It is therefore accepted that the moment of the collection of the fruits (jure corporis) rather than the moment of sowing the seeds (jure seminis) is crucial. Consequently, the estate of the usufructuary will only be entitled to fruits already collected on expiry of the usufruct. After the termination of the usufruct, the standing crops are the property of the owner. However, in order to treat both parties fairly, the nude owner is obliged on termination of the usufruct to reimburse the usufructuary for the cost of production of the crop up to the value of the standing crop (Civil Code, art. 1447).

The question regarding the proportionate division of an annual rent where the lease of the property expires six months before the annual rent is due, deals with the sharing of civil fruits (income from a lease of the property by the usufructuary) between the nude owner and the usufructuary. Civil fruits differ from natural fruits in that they are shared according to the duration of the usufruct (pro rata temporis) (Civil Code, art. 213 nos. 1 and 2) and they are divided between the nude owner and the usufructuary in proportion to the duration of each person’s right. B can thus collect the rent for the duration of his/her usufruct. This will also be the case if the usufruct expires six months before the lease expires. The rent for the last six months will accrue to the nude owner and not to the estate of the usufructuary.

Since a usuary is entitled to use the property and to collect fruits to the extent necessary to satisfy personal and family needs, none of the above situations would apply to him/her.

A hereditary building lease (superÞcies) entitles the holder to plant or maintain trees or plantations or to construct or maintain buildings on land belonging to another, either for a fixed term or in perpetuity (Civil Code, art. 1524). The grant of a building lease can take the form of an alienation of a building or trees separate from the soil (Civil Code, art. 1528). Where the building lease entitles the holder to plant or maintain trees or plantations on land belonging to another, the holder is not entitled to cut existing plantations, fruit trees, decorative trees or shrubs. The position would be the same with regard to new trees and plantations

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the mineral fields were already being worked at the commencement of the liferent or they had already been opened for working although they were not yet being worked.110 In these circumstances, the liferenter may grant new mineral leases as long as there is no substantial danger of

exhaustion of the minerals.111

The general rule is that one who sows a crop is entitled to reap it.112 The maxim is messis sementem sequitur: the harvest goes to the sower. This holds true even after the termination of a lease. The tenant’s right is ‘not merely to enter the land when the crop is ripe for the purpose of reaping it, but to attend to it during its growth, and to perform any agricultural operations which may be necessary’.113 This right can be modified or taken away by contract between the landlord and tenant, but it has been said that the rights of the sower are so firmly fixed in law that an agreement to waive both the entitlement to reap the crop and to compensation for it will not readily be inferred.114

As with tenants, so for liferenters: the harvest goes to the sower. The

liferenter is entitled not only to what he harvested during the liferent but to all of the produce of what he sows.115

In certain circumstances,116 a tenant is entitled to sub-lease the property. B is entitled to the proceeds of the sub-lease as civil fruits and also, more simply, as a matter of contract law. As a matter of property law, it is not possible for the duration of the sub-lease to exceed that of the principal lease, because the sub-tenant’s right derives from the tenant’s.

A proper liferenter is also able to grant leases and is entitled to the rent therefrom as a civil fruit of the property and as a matter of contract law. Without special powers or the owner’s consent, such a lease may not exceed the duration of the life interest117 (although the tenant cannot be removed until the Whitsunday (28 May) following the termination of the liferent).118 The allocation of entitlement to rent is possibly one of

110Styles, ‘Liferent’, para. 1638; Gordon and Wortley, Land Law, para. 17–40; Wardlaw v. WardlawÕs Trs. (1875) 2 R 368 (IH) 372; Campbell v. Wardlaw (1883) 10 R (HL) 65 66; Nugent v. NugentÕs Trs. (1899) 2 F (HL) 21 23; NaismithÕs Trs. v. Naismith 1909 SC 1380 (IH).

111Wardlaw v. WardlawÕs Trs. (1875) 2 R 368 (IH) 373.

112ChalmerÕs Tr. v. DickÕs Tr. 1909 SC 761 (IH) 769; MÕKinlay v. Hutchis or HeronÕs Tr. 1935 SLT 62 (IH) 64.

113ChalmerÕs Tr. v. DickÕs Tr. 1909 SC 761 (IH) 770.

114Cameron v. Nicol 1930 SC 1 (IH) 16–17.

115Gordon and Wortley, Land Law, para. 17–42.

116Detailed, in the response to Case 9.

117Erskine, Institute, II. ix. 57; Gordon and Wortley, Land Law, para. 17–52.

118Stair, Institutions, II. ix. 9; Paton and Cameron, Landlord and Tenant, p. 50.

the most complex issues in lease law. The general principle is that the liferenter is entitled to civil fruits (of which rent is one) accruing during the subsistence of his/her right. The question of when rent accrues can cause difficulty.119 In respect of most leases the answer is simple. By the Apportionment Act 1870, rent accrues from day to day and is apportioned accordingly.120 Assume B is a liferenter and has granted a lease to C with the entire year’s rent due at the end of the year. If B dies on 30 June, B’s estate is entitled to half of the annual rent. The apportioned amount is, however, only recoverable when the whole amount of which it forms part falls due, or would have fallen due, had the right giving rise to the entitlement not been terminated.121 In our example, if the liferent terminates, A is not able to remove C from the property until the following Whitsunday, namely 28 May. At the end of the year, the rent becomes payable to A as the landlord at the time the rent becomes payable. The rent received by A is apportioned proportionally between B’s executor and A. B’s executor only has a claim against A and not against C directly.122

Complexity arises in respect of certain types of leases (mainly agricultural ones) where the law allocates certain dates on which rent accrues, known as term dates. These are the ‘legal terms’. So, for example, in an arable lease, where the tenant takes entry on Whitsunday (28 May) 2011, the first legal term on which rent is due is Whitsunday 2012 and the second is Martinmas (28 November) 2012. Parties may provide differently in their lease contract and stipulate ‘conventional terms’ on which rent is to become due. They may provide either for the rent to be paid earlier than the legal terms (a ‘forehand rent’) or later than the legal terms (a ‘backhand rent’). If parties provide that rent is to be paid backhand, the rule is that the person who is the landlord at the time when the rent becomes due in accordance with the legal term is not deprived of his/her right to the rent. The right vests in the landlord in accordance with the legal terms, even if it does not become due in accordance with the conventional terms until some later point. If there is a forehand rent, the rent vests in accordance with the conventional terms. So if B has a liferent and grants a lease where the law allocates certain legal terms, with the lease providing for conventional backhand rents, and B dies between two term dates, the law provides that his/her

119See generally Gordon and Wortley, Land Law, paras. 17–44 to 17–49.

120Apportionment Act 1870, s. 2. 121 Apportionment Act 1870, s. 3.

122Apportionment Act 1870, s. 4.