The landlord demanded raising the rent from €1,650 to €1,900. Here’s what we did — and why there’s no need to panic
A short but useful story from Funchal. We’re sharing it because many expats and tenants in Madeira run into the same thing — and get scared. There’s no need: it all gets resolved calmly, in writing, and by the law.
Disclaimer. This is not legal advice, just an account of a real experience (details anonymized). Every situation is different — for your own contract, consult a lawyer.
The situation
A family rents an apartment (T2) in Funchal. A residential lease (arrendamento para habitação), 1-year term with automatic renewal, rent €1,650/month.
A month before the term ends, the landlord sends a document — an “Adenda n.º 3” — stating unilaterally that “due to indexation” the rent will be €1,900/month from the new date. The document is signed by him only. Verbally, the figure “+16.1%” was mentioned.
In essence — an attempt to raise the rent by ~15% at once and present it as a “mandatory indexation.”
The catches and pitfalls that came up
1. The “Adenda” is signed by the landlord only. Any change to the contract terms by mutual agreement (alteração) requires the written consent of both parties. One signature is not an agreement.
2. €1,900 is NOT indexation. The official rent-update coefficient for 2026 is 1.0224, i.e. +2.24%. Applied to €1,650, that gives a maximum of €1,686.96. €1,900 is +15% — many times higher than any legal coefficient. It cannot be called “indexation.”
3. A key distinction: atualização ≠ alteração.
- Atualização (annual indexation) — a unilateral right of the landlord, but strictly within the official coefficient (here +2.24%), with 30 days’ written notice.
- Alteração (any other change to rent, term, or deposit) — only by written agreement of both parties.
The landlord tried to sneak an alteração through disguised as an atualização. It doesn’t work: the amount is far too large for indexation, and there is no consent for an agreement.
4. The deadlines work against him. For a contract with this term, to prevent automatic renewal the landlord must give notice 120 days in advance. He missed that deadline long ago → the contract renews automatically on the old terms. On top of that, the law does not allow the landlord to evict at the first renewal any earlier than 3 years from the start of the contract.
5. The risk of a fabricated “debt.” The main real danger: after the new date, the landlord could start treating €1,900 as the “rent due,” €1,650 as an “underpayment,” accumulate a “debt,” and after a few months try to terminate for non-payment. There’s a defense for this (below).
6. Proof of delivery. All communication is done only by registered letter with acknowledgment of receipt (carta registada com aviso de receção). Later, the AR slip came back signed by the landlord — solid proof that he received our reply.
What we did (step by step)
- We didn’t panic and didn’t pay €1,900. There is no valid legal increase in force — so the rent stays €1,650.
- We wrote a calm, formal reply and sent it by carta registada com AR to the address in the contract. In the letter:
- we do not accept €1,900;
- €1,900 does not match the 2026 coefficient (1.0224);
- a unilateral change without our consent is void;
- we continue paying the legally due rent in good faith.
- We keep paying €1,650 — every month, on time, by bank transfer, with a clear payment reference, and we keep all receipts. A transfer confirmation is proof of payment in itself, whether a recibo is issued or not.
- We prepared a plan in case he refuses the money. If the landlord returns the transfer or refuses it — we immediately go for consignação em depósito (depositing the rent via Caixa Geral de Depósitos). This fully removes any possibility of accusing us of non-payment.
- We kept the AR slip with his signature — proof of delivery.
What we relied on (primary sources)
- 2026 indexation coefficient — 1.0224 (+2.24%), Aviso n.º 23174/2025/2 (INE) — Diário da República
- Código Civil (consolidated text) — DRE:
- Art. 1077 — updating (indexation) of rent;
- Art. 1097 — landlord’s opposition to renewal (120-day notice; for the first renewal the effect only kicks in after 3 years);
- Art. 1083 — termination for non-payment (threshold — arrears exceeding 3 months);
- Art. 1041 — tenant’s default (20% penalty, 8 days to cure);
- Art. 813 — creditor’s default (mora do credor), if he refuses to accept payment;
- Art. 841 et seq. — consignação em depósito (deposit of rent).
- NRAU (Lei 6/2006), Art. 9 — form of notices — DRE · PGDLisboa
The indexation coefficient changes every year — for 2026 it is 2.24%. Always check the current figure in the Diário da República.
The bottom line — why there’s no need to be afraid
- The landlord cannot unilaterally raise the rent to €1,900.
- The maximum legal indexation for 2026 is +2.24% (and only with a proper written notice 30 days in advance).
- He cannot evict at the first renewal — you are protected for at least 3 years from the start of the contract.
- A “recibo” is a receipt for money received, not an invoice; it does not establish the amount of any debt.
- Your main shield is to pay the rent in force on time and document everything, and if he refuses to accept the money — deposit it. Then an accusation of non-payment is impossible.
Calm, written form, and references to the law work better than any panic. 
How it all ended 
We simply kept paying €1,650 — on time, by bank transfer, with a payment reference, keeping every receipt. That’s it.
The result:
- The landlord silently accepted €1,650. He didn’t return the transfer, didn’t refuse it — meaning the deposit scenario (consignação em depósito) wasn’t even needed.
- And most importantly — he started issuing a recibo de renda for exactly €1,650. That’s his own official tax document: the landlord himself declares to Finanças that he receives exactly €1,650. After that, he can no longer claim “actually the rent is €1,900, you’re underpaying” — his own receipts say the opposite.
The €1,900 simply evaporated. No court, no extra payment, no conflict. It came down to a simple combination: calm + a written position + timely payment of the rent in force + documenting everything.
The only thing left for the future: if a proper indexation notice ever arrives (correct coefficient +2.24%, by registered letter with AR, 30 days in advance) — that legal increase (~€37) cannot be refused. But that’s a routine, predictable situation — not what was attempted here.
Did the same happen to you?
Have you faced a sudden “increase,” a strange addendum, or pressure over rent in Madeira?
Tell your story in the comments 
— what happened, what you did, how it ended. Your experience could really help others.
