Commercial lease renewal action: how does a retailer secure the renewal of the lease and protect the business premises?

An entrepreneur spends years building up business premises: investing in renovations, winning customer loyalty, making that address part of the business's identity. Then the lease agreement nears its end — and the fear sets in: what if the owner does not want to renew? And what if they do, but triple the rent? For many businesses, losing the premises means losing what was built.

The good news is that the law protects those in this situation. The bad news is that this protection has a deadline within which it must be exercised — and it is short and unforgiving. Anyone who discovers the commercial lease renewal action too late, after the window has closed, loses the right to compulsory renewal and is left at the mercy of the owner's will (and price). The cost of inaction here is not abstract: it is the loss of the goodwill (fundo de comércio).

In this guide, you will understand what the commercial lease renewal action is and what it protects, who is entitled to it (the requirements of art. 51), what the deadline to file the action is and why it is so sensitive, how the tacking of lease terms works, when the owner may recover the premises, what changes in shopping malls, and what happens if renewal is denied. At the end, a worked example with numbers, the most common mistakes and a checklist.

What is the commercial lease renewal action and what does it protect?

The commercial lease renewal action (ação renovatória) is the legal instrument by which the tenant of a commercial property obtains the compulsory renewal of the lease agreement, for a new period, even if the property owner does not want to renew. It is provided for in arts. 51 and 71 to 75 of Law 8.245/91 (the Tenancy Law).

What it protects, at bottom, is the goodwill (fundo de comércio, or business premises): the set of intangible values — customer base, location, reputation — that the entrepreneur has developed at that address. Without this protection, the landlord could, at the end of each lease, threaten eviction in order to extract abusive rents, or simply take for itself the premises whose value was built up by the tenant's work. The renewal action balances this relationship.

It is worth noting the historical origin: protection of the business premises arose with Decree 24.150/1934, the famous "Lei de Luvas" (Key Money Law), now repealed and replaced by Law 8.245/91, which consolidated the subject. The purpose of this is simple to explain: the renewal action recognizes that the business premises have value, and that this value belongs to whoever built it.

The law also defines who may seek renewal: in addition to the tenant, the assignee or successor of the lease has standing and, in the case of full subletting, the subtenant (art. 51, §§1 and 3). In companies, the departure or death of a partner does not make the right disappear — it follows whoever continues the business. What matters, in the end, is the continuity of the operation of the same line of business at those premises.

Who is entitled to renewal? The requirements of art. 51

Not every commercial lease gives rise to a right of compulsory renewal. Art. 51 of Law 8.245/91 requires three requirements, which must all be present at the same time (cumulative):

• A written lease for a fixed term. A verbal or indefinite-term lease does not allow the renewal action — a written lease with defined start and end dates is required.

• A minimum term of five years. The lease to be renewed must have a five-year term, or the uninterrupted sum of successive written leases must reach five years (the so-called accessio temporis, which we will examine below).

• Three years in the same line of business. The tenant must have been carrying on its business, in the same line of activity, at the premises, for the uninterrupted minimum period of three years.

In addition to these three, case law requires the tenant to be current under the lease (no default) and to have paid the taxes and charges on the property that were its responsibility. If any requirement is missing, the request tends to be dismissed on the merits — hence the importance of organizing the documentation before filing.

What is the deadline to file the commercial lease renewal action?

This is the most sensitive point of the entire renewal action — and the one that causes the most harm. Art. 51, §5, of Law 8.245/91 provides that the action must be filed within the window between one year (at most) and six months (at least) before the date on which the lease in force ends.

In other words: if your lease ends on December 31, 2026, the renewal action may only be filed between January 1, 2026 and June 30, 2026. Before that, it is too early; after that, it is too late. The window lasts six months, and outside it the right is lost.

Worse still: this is a limitation (decadência) period, not a statute of limitations (prescrição). Under the rule of art. 207 of the Brazilian Civil Code, decadência is neither suspended nor interrupted — there is no way to "stop the clock". The only relaxation the STJ allows is that, if the last day falls on a date with no court business (a holiday, a recess), the deadline is extended to the next business day.

It is common for landlords, aware of this deadline, to deliberately drag out negotiations — delaying responses, promising a deal that never comes — so that the window closes and the tenant loses the right to compulsory renewal. That is why the recommendation is clear: negotiate in parallel, but do not count on the deal; track the date and file the action within the deadline, even while the conversation is ongoing.

What is the tacking of lease terms (accessio temporis)?

Many businesses do not have a single five-year lease, but rather a sequence of shorter leases — of two or three years each — that were renewed over time. The law allows the terms of these successive written leases to be added together to reach the required five years: this is accessio temporis (art. 51, II).

The delicate point is the gap between one lease and the next. Case law tolerates small gaps, arising from the very dynamics of renegotiation, provided the activity has not been interrupted. But there are decisions that deny tacking when the gap is long. The cleaner the sequence (no gaps, always in writing), the more secure the right. The purpose of this is simple: written leases with no gaps are the best proof of continuity.

For how long is the lease renewed?

Once the right is recognized, the lease is renewed for five years. This is the settled understanding of the STJ: when art. 51 refers to renewal "for an equal term", it means the legal minimum term of five years, and not the duration of the last lease (REsp 1.323.410/MG, Reporting Justice Nancy Andrighi). Súmula 178 of the STF also sets five years as the cap for judicial renewal.

Once this renewal ends, the right may be exercised again: with the requirements met once more and the deadline observed, a new renewal action is available. In other words, the business premises may be protected successively, in each five-year cycle.

What must the statement of claim contain? (art. 71)

Art. 71 of Law 8.245/91 requires the statement of claim in the renewal action to be supported by a set of documents. Without them, the judge may reject the request at the outset:

• Proof of the requirements of art. 51: the leases (to demonstrate term and continuity) and proof of the three years of activity in the same line of business.

• Proof of exact compliance with the lease in progress: proof of payment of rent and charges, demonstrating that there is no default.

• Proof of payment of taxes and charges on the property whose payment was the tenant's responsibility (IPTU, for example).

• A clear statement of the conditions offered for the new lease — in particular the proposed rent amount.

• Identification of the guarantor (or other security), with proof of financial standing, where the lease to be renewed has a security.

Assembling this file takes time — one more reason to start early, and not on the eve of the limitation (decadência) period.

When can the landlord recover the premises? (art. 52)

Even if the tenant meets all the requirements, the law recognizes situations in which the landlord is not required to renew and may recover the premises. They are set out in art. 52 of Law 8.245/91:

• Government works or value-enhancing renovation (item I): when the Government orders works on the property, or when the landlord intends to carry out renovations that substantially increase its value. The defense requires proof of the official order or a report from a qualified engineer describing the works and the increase in value.

• Own use or relocation of an establishment (item II): when the landlord needs the premises for itself, or to relocate there a commercial establishment existing for more than one year and owned by it, its spouse, an ascendant or a descendant. In this case, the new business may not carry on the same line of business as the tenant.

There is an important right attached to these grounds: if the recovery is for own use or relocation and the landlord, within three months of the property being handed over, does not give it the purpose alleged, it must indemnify the tenant for the losses, lost profits and depreciation of the goodwill (fundo de comércio) (art. 52, §3). The law also provides for a penalty when the recovering party does not fulfill the declared purpose (art. 44).

What defenses can the landlord raise? (art. 72)

In its defense, the landlord cannot allege just anything: art. 72 limits the defense, as to matters of fact, to specific grounds:

• Failure to meet the requirements (item I): the claimant does not meet the requirements of art. 51 (term, line of business, regularity).

• Insufficient offer (item II): the rent offered by the tenant is below current market value, excluding the increase in value that the tenant itself brought to the premises. In this case, the landlord submits a counter-offer, and there is usually expert evidence to ascertain the value.

• Better offer from a third party (item III): there is an offer from a third party on better terms. The landlord must attach documentary evidence signed by the third party and by two witnesses, indicating a line of business different from the tenant's. Here, the tenant may, in reply, match the offer and keep the premises.

• Recovery grounds (item IV): the situations under art. 52 (works, own use, relocation).

It is worth noting: in the case of a third-party offer (item III), if renewal does not take place, the indemnification to the tenant is set in the judgment itself and is owed jointly and severally by the landlord and the offeror (art. 75).

Leases in shopping malls: what changes?

In São Paulo, much of the relevant commercial leasing is in shopping malls, and there are particularities. The renewal action applies normally, but with an extra protection for the retailer: the developer cannot refuse renewal on the grounds of its own use (art. 52, §2). In return, the conditions freely agreed in the lease and in the general rules of the development prevail (art. 54), such as operating rules, the promotion fund and charges.

In practice, this means that the mall retailer has the same right of renewal — subject to the same requirements as to term and activity — but must pay close attention to the specific clauses of the mall lease, which tend to be detailed.

Provisional rent and differences during the proceedings

Because the renewal action discusses, among other things, the amount of the new rent, the law created mechanisms for the period while the proceedings are pending. The landlord may request, in its defense, the setting of a provisional rent, not exceeding 80% of the amount sought, to take effect from the first month of the new term (art. 72, §4).

At the end, once the amount is set by the judgment, the rent differences accrued during the proceedings are enforced in the same case record and paid in a single lump sum (art. 73). For this reason, the amount proposed in the statement of claim must be realistic: an offer that is too low may generate a high difference to be paid in the end.

What if renewal is denied? Indemnification and vacating the premises

If the action is dismissed on the merits — because a requirement was missing, because the landlord proved a legitimate recovery, or because there was a better offer from a third party —, the result is non-renewal. Where requested in the defense, the judge orders the issuance of an eviction order, with a 30-day period for voluntary vacating of the premises (art. 74, as worded by Law 12.112/2009).

But "losing" the renewal action does not necessarily mean leaving with nothing. As seen, in cases of a third-party offer (art. 75) and of recovery for own use where the purpose is not fulfilled (art. 52, §3), there is a right to indemnification for the goodwill (fundo de comércio). Assessing this right is part of the strategy, even when renewal is not viable.

Renewal, rent review and eviction: do not confuse the actions

Three actions under the Tenancy Law are often confused, and each serves a different moment:

• Commercial lease renewal action: brought by the tenant, to compulsorily renew the lease and protect the premises — always within the window of 1 year to 6 months before the end of the lease.

• Rent review action: brought by the landlord or the tenant to adjust the rent to the market, as a rule after 3 years of the lease's term or of the last agreement (art. 19). It does not renew the lease — it only revises the price.

• Eviction action: brought by the landlord to recover the premises, whether for non-payment or for the end of the lease where there is no right to (or request for) renewal.

Knowing which action applies — and when — avoids losing the deadline and the right. Not infrequently, the tenant who let the renewal window pass only realizes the mistake when an eviction action arrives from the other side.

A worked example: the renewal action of Mr. Jorge's coffee shop

Mr. Jorge has had a coffee shop in a busy location in São Paulo for six years, always in the same line of business. The current lease, in writing and for a fixed term, is for five years and ends on December 31, 2026. He pays R$ 8.000 in rent per month and is current on everything. The owner, noticing the area's rising values, says he "might not renew" and mentions R$ 14.000 for a possible new lease.

What does Mr. Jorge need to do? Track the date. The window to file the renewal action runs from January 1, 2026 to June 30, 2026 (between one year and six months before the end). He gathers the leases, the proof of payment and the IPTU clearance certificate, and files the action in May 2026, offering a rent of R$ 10.000 (which he understands to be market value).

The landlord contests, saying the fair amount would be R$ 13.000 (art. 72, II) and requests a provisional rent. The judge sets the provisional rent at R$ 8.000 (within the 80% limit of the landlord's request) and orders expert evidence. The report concludes that the market rent, excluding the increase in value brought by the coffee shop itself, is R$ 11.500.

Result: the lease is renewed for five years, at R$ 11.500. Since Mr. Jorge paid R$ 8.000 during the months of the proceedings, he will have to settle the accrued difference in a single lump sum (art. 73). But the essential thing is secured: he kept the premises that sustain the business — something he would have lost had he let the June deadline pass by, relying on the conversation with the owner.

The most common (and costly) mistakes

In practice, the missteps that cost the most in a renewal action are predictable:

• Missing the limitation (decadência) period. Relying on negotiation and letting the one-year to six-month window pass is, by far, the most frequent and most serious mistake — and there is no fixing it.

• A verbal or indefinite-term lease. Without a written lease for a fixed term, there is no right to compulsory renewal. Formalizing the lease is the first step.

• Gaps between successive leases. Long gaps without a written lease compromise the tacking of terms (accessio temporis) and may make the five years unattainable.

• Default or unpaid IPTU. Being behind on rent or taxes defeats the request, by failing to meet the requirements of art. 71.

• An unrealistic rent offer. Offering an amount far below the market generates a counter-offer, expert evidence and a high difference to pay in the end.

• Changing the line of business. The protection is of the premises in that line of business; changing the type of trade may compromise the requirement of three years in the same activity.

Checklist: what to organize before the renewal action

To reach the renewal action in a strong position:

• Locate all the lease agreements (current and previous) and check terms and dates.

• Calculate the deadline window (between 1 year and 6 months before the end) and mark the cut-off date with room to spare.

• Gather proof of payment of rent and charges and the IPTU/tax clearance.

• Prove the three years in the same line of business (operating license, invoices, articles of association, promotional material).

• Establish the market value of the rent in order to formulate a realistic offer.

• Arrange the security (a reliable guarantor, rent insurance) required for the new lease.

• Consult a lawyer in advance, preferably in the penultimate year of the lease.

Frequently asked questions about the commercial lease renewal action

What is the commercial lease renewal action?

It is the action that grants the business tenant the right to compulsorily renew the lease agreement for the business premises, even against the will of the property owner, provided the requirements of the Tenancy Law (Law 8.245/91, arts. 51 and 71) are met. Its purpose is to protect the goodwill (fundo de comércio) — the customer base and the value the entrepreneur has built up at that location — so that they are not simply evicted at the end of the lease. The renewal is granted for a new term and at a rent adjusted to market value.

What are the requirements to be entitled to renewal of a commercial lease?

There are three cumulative requirements under art. 51 of Law 8.245/91: the lease to be renewed must be in writing and for a fixed term; the minimum term must be five years (or the uninterrupted sum of written lease agreements must reach five years); and the tenant must have been carrying on the same line of business, at the premises, for at least three uninterrupted years. In addition, the tenant must be current under the lease and with the property taxes. If any of these points is missing, the request tends to be denied.

What is the deadline to file the renewal action?

The action must be filed within the window between one year (at most) and six months (at least) before the end of the lease in force (art. 51, §5, of Law 8.245/91). This is a limitation (decadência) period: it is neither suspended nor interrupted (art. 207 of the Brazilian Civil Code), and missing it means losing the right to compulsory renewal. If the last day falls on a date with no court business, the STJ allows extension to the next business day. It is the point that defeats most claims: that is why the date must be tracked well in advance.

I missed the deadline for the renewal action. Can I still stay on the premises?

Once the limitation (decadência) period has lapsed, the right to compulsory renewal is extinguished, and the landlord may recover the premises at the end of the lease. This does not prevent an amicable renewal, if the owner agrees — but at that point there is no longer any legal obligation, and the tenant loses bargaining power. In some cases indemnification for goodwill (fundo de comércio) may still be discussed, depending on the situation. The practical lesson is that the deadline must be monitored from the signing of the lease.

Is the property owner required to renew the commercial lease?

Yes, provided the tenant meets the requirements of art. 51 and files the action within the deadline. Once the prerequisites are met, renewal is compulsory — the landlord cannot simply refuse in order to lease to someone else for more money. The law itself declares void any contractual clauses that attempt to exclude this right (art. 45 of Law 8.245/91). The exceptions lie in the recovery grounds of art. 52, which must be proven.

In which cases can the landlord recover the premises even when I have the right?

Art. 52 of Law 8.245/91 lists the grounds: when the Government orders works, or when the landlord itself will carry out renovations that substantially increase the property's value; and when the landlord needs the premises for its own use, or to relocate there a commercial establishment existing for more than one year and owned by it, its spouse, an ascendant or a descendant — in which case it may not carry on the same line of business as the tenant. There is also the defense based on a better offer from a third party. If the landlord alleges own use or relocation and does not give the premises that purpose within three months, it must indemnify the tenant.

How long does the renewal last?

Under the settled case law of the STJ, the new renewal term is five years, even if the last lease was shorter (REsp 1.323.410/MG). Súmula 178 of the STF sets five years as the cap for judicial renewal. Once that period ends, the tenant may, again meeting the requirements, file a new renewal action — the right may be exercised successively.

What is the tacking of lease terms (accessio temporis) in the renewal action?

It is the possibility of adding up the terms of successive written lease agreements to reach the five years required by art. 51, II, even if none of them, on its own, runs for five years. Case law allows, with caution, small gaps between one lease and the next (resulting from renegotiation), provided the activity has not been interrupted. The longer the gaps, the greater the risk that the request will be denied — which is why it is best not to leave gaps between leases.

I have a store in a shopping mall in São Paulo. Does the renewal action apply?

Yes. The commercial lease renewal action applies to leases in shopping malls, and there is an additional protection: the developer cannot refuse renewal on the grounds of its own use (art. 52, §2, of Law 8.245/91). On the other hand, the conditions freely agreed between the retailers and the developer prevail (art. 54), such as operating rules and charges. The requirements as to lease term and length of activity are the same as for other commercial leases.

Where is a commercial property renewal action heard in São Paulo?

The action is filed in the State Courts, as a rule in the civil court of the venue where the property is located — in the capital, in the regional courthouses of the São Paulo Court of Justice (TJSP). Because it involves matters of fact (the market rent, compliance with the lease), there is usually a valuation expert evidence. A firm that practices in São Paulo knows the dynamics of these courts and the procedural calendar, which helps to avoid missing the limitation (decadência) period.

When should I consult a lawyer about the renewal action?

Ideally, you should consult a lawyer right at the start of the penultimate year of the lease — that is, well before the one-year to six-month window before the end. This allows time to gather the leases, proof of payment and tax clearance certificates, prepare the proposal for the new rent and file the action within the deadline. Seeking help at the last minute is risky, because the deadline is a limitation (decadência) period and is not extended (except for the next-business-day rule). Anyone who cares about their business premises should treat the renewal action as part of the business's planning.

Protecting the premises means protecting the business itself

For many businesses, the address is part of the asset: it is where the customer base learned to find the company, where the investment in infrastructure was made, where the brand gained a face. The commercial lease renewal action exists precisely so that this value is not captured by the property owner at the moment of greatest vulnerability — the turn of the lease.

But the protection only works for those who act at the right time. The difference between renewing the lease for another five years and losing the premises can be a date on the calendar. That is why treating the renewal action as part of planning — and not as a last-minute emergency — is what separates the entrepreneur who keeps the business standing from the one who watches years of work disappear with a returned key.

At Falchet e Marques Sociedade de Advogados, a firm in São Paulo (Av. Paulista), we work in commercial leasing and the commercial lease renewal action — from analyzing the leases and the limitation (decadência) period to formulating the rent proposal, supporting the statement of claim and conducting the expert evidence. If the lease of your business premises is nearing its end, it is worth reviewing the dates before the window closes.

Talk to our team on WhatsApp: +55 11 95901-1854 — and check whether you are still within the deadline to renew your business premises.