Cape Verde » Rental Market

Cape Verde's warm climate and nearness to Europe makes it a good place to get high rental returns. Overseas property owners in Cape Verde could get "massive" rental returns on their investment. Due to its warm weather investors could potentially let out their properties for longer than they would be able to in other rising markets. So maximum rental returns will be achieved all year around.

The islands had three international airports, allowing easy access for holidaymakers from Britain. Cape Verde's National Statistics Institute observed a 26.4 per cent increase in foreign visitors to the country in 2006.

The tourism industry in Cape Verde has grown 25% in the last year and is expected to increase many fold within the next few years. For smart investors, that means rental income.

The landlord and tenant are free to agree the rent, and the payment date. In the absence of other contractual provisions, rent is paid on a monthly basis, and no later than the eighth day of the month. 

If the lease contract is silent on the method and terms of rent increases, the landlord may increase the rent only after five years of contract. The statutory maximum annual increase is, in any case, a twelfth of the gross income generated by the property. The tenant is entitled to refuse the rent increase, in which case he is allowed to unilaterally terminate the contract with one month’s prior notice.

The landlord is not allowed to demand more than one month’s rent in advance. The landlord’s rights are exceptionally weak.  Landlord and tenant are free to agree on the duration of the contract, but if they fail to do so, a six months’ term applies. In either case, the lease period is automatically renewed for equal periods of time, unless the tenant serves the landlord a termination notice.

The landlord may only abort the lease in very limited cases, by filing an eviction request with a court. The grounds are the following:

• Failure to pay the rent on the due date;
• Use of the property for purposes other than the ones contractually agreed;
• Recurrent use of the property for immoral, illegal or dishonest purposes;
• Unauthorized subletting;
• Subletting for a rental amount higher than the one authorized by the landlord;
• Vacancy of the property for one consecutive year; or
• Tenant having his/her main residence elsewhere;

However, the above mentioned events do not entitle the landlord to request the tenant’s eviction:

• In case of force majeure or prolonged illness,
• If the tenant is not residing in the property for professional reasons, or
• If the tenant’s household continues to reside at the property.

The lease does not terminate upon the tenant’s death, but automatically transfers to the spouse or, if such next of kin is no longer alive, to the parents or children living with the tenant for more than a year at the time of his/her death.

Regardless of the aforesaid, the landlord may always terminate the contract and evict the tenant by means of an eviction request, on the following grounds:

• In case he/she needs the property to reside; or
• Execution of works at the property so as to increase the number of leasable spaces.

The regime for termination of the lease agreements and increase of rents are not applicable to leases for vacation purposes during short periods of time.