while The existence of land rental in the favelas in these early decades has often been described as illegal, there is evidence to show that the collection of rent in favelas was officially recognized by the state government as early as the 1920s and 1930s .

As part of intermittent efforts at favela removals, the Vargas government of the 1940s criminalized the receipt of rent for favela property - This led to a significant increase in the informal rental market which has persisted to the present day.

favelas were born by people building out of necessity a home on land they did not own  - thus, renting these properties out is not justifiable, and while it may be tolerated depending on the location and circumstances, technically it is still not legal.