New Jurisprudential Understanding that Limits the Term for Extending Non-Residential Lease Agreements in Renewal Lawsuits

The Superior Court of Justice is consolidating a new stance that restricts the term for judicial renewal of non-residential lease agreements to a maximum of five years, regardless of whether the agreement being renewed is longer than this period.

In fact, the precedent set out in the judgment of Special Appeal No. 1323410/MG, with Nancy Andrighi as Reporting Justice, which limits the renewal of non-residential lease agreements to five-years, was largely adopted by the STJ, removing – and, consequently, putting an end to Article 51 of the Leasing Law -, the understanding in force until then that had recognised the right to renew an agreement by a term identical to that of the previous agreement.

This previous understanding, it is recalled, was supported in Special Appeal nos. 2,778/DF (Reporting Justice Waldemar Zveiter), 547,369/MG (Reporting Justice Felix Fischer) and 693,729/MG (Reporting Justice Nilson Naves) and stated that the lessee had the right to extend an agreement by the same period for which it was in force between the parties, that is, with no limitation to renewal for a period longer than five years, allowing agreements to be extended for ten, fifteen, or twenty years, for example. The only exception was situations of addition of agreements, where, in this specific hypothesis, renewal could not exceed a term of five years.

We dare to disagree with this change in case law by the STJ, inasmuch as the precedent of REsp no. 1323410/MG was examined and judged under certain and specific circumstances and that, for this reason, it cannot be adopted indiscriminately in all other cases for this topic. It should be highlighted that local Courts have been diverging on this issue, bringing enormous legal uncertainty to businesspeople and traders.

From this perspective, since Article 51 of the Leasing Law remains sound and its interpretation leaves no room for doubt, legal operators must work, especially within the scope of the STJ, to settle the correct application of the legal rule in question, guaranteeing all jurisdictions the clear legal right of the correct setting of the term for renewing non-residential lease agreements, thereby putting an end to the current legal uncertainty.