However, the real estate in which the business location operates does not belong to the lessee.

Thus, does the business location, the result of the investment and the activity developed by the entrepreneur, belong to him or to the owner of the real estate? Is there any legal protection that defends the business location?

All the investment made by the lessee deserves legal protection, such that upon the end of the Lease, the lessee does not see that such investment was made in vain. This right is exercised through its own individual action called: renewal action. This action effectively protects the right to the Business Location resulting from the activity developed, which is the reason why in the case of a sublease, the individual who has the right to renewal shall be the sublessee, who is the individual who effectively has possession of the location.

Thus, if the requirements set out in Article 51 of Law No. 8.245/91 are met, the entrepreneur or company may legally plead the compulsory renewal of the lease agreement. It is Worth emphasizing, however, that this right is not absolute, given that it goes against the right to property of the lessor.

It is important to note that it is not good business for an entrepreneur to enter into an agrément for an indeterminate term, given he would in fact see his bond with the lessor cease upon simple prior notice when, in the majority of cases, it is of interest to the person who develops a certain business to remain at the location for the longest possible period in order to establish the respective name and become known.

It is possible to compose the term of five years by the sum of various written agreements of shorter duration, provided they are successive and that the sum of all such agreements has duration greater than or equal to the legal requirement. It is important to note that the requirement of a written agreement for renewal is valid for all of the agreements to be added to compose the five (5) years, but does not require that all such agreements are established for a determinate term, but merely the last one, which will be renewed.

III - lessee is exploring its business, in the same area of activity, for the minimum and uninterrupted term of three years.

It is necessary for the lessee entrepreneur to have been exploring the same activity for at least three uninterrupted years, a term which is considered necessary for the location to obtain added value in order to grant it the right to renewal.

It is also important to note that there is an additional requirement in order to file the Renewal Action which often goes unnoticed: the referred action must be filed between one year and six months prior to the end of the agreement to be renewed, which is a statute of limitations that cannot be suspended or interrupted. Therefore, it is recommended that a written instrument setting forth the renewal already begins to be prepared at the beginning of the last year.

The right to renew the agreement may be transferred to assignees or successors of the lease, and even in case of the death of one of the partners of the company, the remaining partner, if he/she continues working in the same area of activity, shall also be entitled to such right.

However, there are exceptions in which, even if the necessary requirements for filing a renewal action are met, the right to property prevails over the interests of the lessee. Articles 52 and 72 of Law No. 8.245/91 set forth cases in which even if the requirements for the Renewal Action were met, the owner may exercise what the legal writings know as Right to Repossession, that is, to take back possession of the real estate regardless of the existence of the right to renewal on the part of the lessee. And what are these exceptions? Note:

I – if, by determination of the Public Authorities, the lessor must perform work on the real estate which entails the radical transformation thereof; or to make modifications of such a nature that increases the value of the business or of the property;

II – if the real estate begins being used thereby or for the transfer of goodwill in existence for more than one year, with the majority of capital held by the lessor, spouse, ascendant or descendant.

In the case of item II, the real estate cannot be intended for use within the same area of activity of the lessee, except if the lease also involved the goodwill, with the facilities and assets.

The lessee shall have the right to indemnification for reimbursement of the losses and the loss of profit that may be borne thereby due to the change, loss of the location and devaluing of the goodwill, if the renewal does not occur due to a third-party proposal, under better conditions, or if the lessor, within the term of three months from the delivery of the real estate, fails to provide the intended destination or does not begin the work determined by the Public Authorities or any intended work declared thereby.

In addition to such cases determined by law, there may be a possible indemnification for loss of the location when such loss results from some violation of contractual good faith, whether subjective or objective, as would occur if the lessor began to explore the same activity of the lessee, taking advantage of the name already formed by the latter in order to capture clients.

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