BUYING - SELLING - REAL ESTATE
The deeds (Escritura de imóvel) : what you need to know
After going through the various stages of buying a house, from searching for the property, visiting, choosing, negotiating the price and signing the purchase contract, it is time to sign the deed.
Things you need to consider before completing a sale.
The act of purchase/sale (Escritura de um imóvel)
The notarial deed is the document by which the purchase and sale of real estate are established. It is carried out through a contract and constitutes the final stage of the entire process.
Normally, it is preceded by a preliminary sales agreement, in which a deposit is paid demonstrating the interest in purchasing the property. ( **Information at the end of the document)
This document stipulates a deadline, followed by the completion of the transaction, if the buyer so desires. If the buyer does not wish to proceed with the transaction, they forfeit the deposit amount. (Deposit = O signal)
On the day of the transaction, the presence of both parties (buyer and seller) is mandatory for the signing. The document is signed before a competent official who certifies compliance with the law, thus attesting to the purchase and sale of the property. This official must verify and prove the identity of both parties.
The deed of sale and mortgage consists of two parts:
- Purchase and sale contract, which corresponds to the moment when the buyer becomes the legal owner of the property
- If the house is purchased with a mortgage, a private contract is drawn up, outlining all the loan terms. Only then does the bank release the funds requested by the client for the purchase of the house.
Required documents
- Civil and tax identification documents of the participants;
- Purchase and sale order contract for the property
- Caderneta Predial Urbana or Application for registration of property in the register (IMI Model I) issued by the Tax and Customs Authority
- License to use
- Building technical specifications
- Energy certificate
- Content certificate
- Infrastructure Certificate
- Mortgage deeds
- Certificate of toponymy
- Payment of the IMT (municipal tax on property transfer).
- Payment of stamp duty.
Where to obtain the deed of ownership (in person and online)
- Notaries ;
- Land registry offices;
- Casa Pronta Service ;
- Casa Simples Casa Segura Service
Amount of the cost of the deed of ownership
All costs associated with the transaction are normally borne by the homebuyer. There is no precise value that can be assigned to this process, as it depends on a number of factors, namely:
- Purchase price of the house;
- Whether it is a first or second residence;
- Expenses related to the payment of stamp duty on the transaction;
- Stamp duty on credit;
- Registration of the deed;
- Fees with home loan services, registration office or notary;
- Costs associated with the payment of the IMT (IMT = value of the deed or value of the wealth tax (whichever is higher) x applicable rate – deductible portion. IMT rates can be consulted on the financial portal ;
- Place where the deed will be drawn up.
Registration of the act
- Fees with CASA Pronta services, the registry office or the notary. Costs associated with the payment of IMT (IMT = value of the deed or value of the wealth tax (whichever is higher) x applicable rate – deductible portion. IMT rates can be found on the financial portal);
Registration deadlines
This can take more or less time, depending on the time required to complete the various stages of buying and selling a property.
Generally speaking, and as a guideline:
- Obtaining the title certificate or the land registry certificate – 5 to 20 days;
- Residence permit – 7 to 30 days;
- Purchase and sale agreement – 7 to 30 days;
- Signing of the deed – 14 to 90 days;
- Conclusion of the case in order to obtain the title certificate and the land registry certificate
- It takes 1 week to 1 month to receive the occupancy permit if the seller does not already have one
- 1 week to 1 month to negotiate the terms of the order contract
- 2 weeks to 3 months to sign the deed and pay the balance to the seller
- Registration at the land registry office after the deed – 30 days.
Types of real estate transactions
There are several types of deeds, which differ according to the objective and type of transaction. Below is an exhaustive list
- Act of buying and selling – the most common and best known;
- Purchase and sale transaction with recourse to a financial institution – equal to the previous one but with intervention of the bank, due to the need for credit;
- Deed for inherited property – the deed is usually drawn up by the organizations mentioned above. The property must be in your name to be sold. It is important to address this point before selling an inherited house;
- Deed for a property under construction – A deed is signed between two parties and can be an advantageous deal because it is generally a cheaper purchase, the property is new, and you have more time to plan. However, it also has its disadvantages: the work may not be completed or may be completed later than expected, and the finishes may be different from what you had envisioned;
- Property given by notarial deed – the process is the same but there is no associated property value, in other words, there is no cost to the buyer when purchasing the property;
- Exchange of ownership deeds – the deed consists of the exchange of properties and may or may not have associated values, depending on the value of the properties. If they have different values, the party owning the property with the lower value will have to pay the remaining value.
Preliminary sales agreement
(Contrato de promise de compra e venda)
CPCV. This will certainly be an acronym that many people will be familiar with. We are talking about the preliminary sales agreement, which is fundamental when buying a house, both for the current owner and for those interested in purchasing the property.
As the first phase in the property purchase process, the CPCV (Construction Purchase Agreement) proves very useful for those who want to buy a house. Although not mandatory , it is the mechanism used to formalize the intention to buy by the prospective buyer and the intention to sell by the prospective seller.
In addition to offering great protection to the contracting parties , particularly with regard to situations of default of payment, it makes it possible to exclude other interested parties from the purchase of the good.
What are the advantages of signing a CPCV?
By signing a CPCV, the contracting parties guarantee the validity of the contract until the signing of the public act, stipulating their rights and duties, the date of conclusion of the final contract, the agreed values and the remaining clauses to be included in the future contract.
The order contract is even more advantageous in the case of buying and selling real estate since, between the time the parties decide to contract and the signing of the final contract, the conditions necessary for the public act may not be met.
For example, if the buyer lacks the necessary funds to purchase the property, there will be a waiting period for mortgage approval from the bank, or if the property is still under construction or lacks a building permit, it is advisable to sign a CPCV (Construction Contract for Sale and Purchase). This contract formalizes the negotiation between the contracting parties.
In addition, the order contract offers greater legal certainty in the relationship between the order seller and the order buyer, as it defines the consequences in the event of late payment or breach of contract by the parties.
The advance payment (Sinal) : What is its purpose?
As a general rule, in preliminary sales contracts, the prospective buyer pays a certain sum of money to the prospective seller as an advance (Sinal ) or principal payment of the property price. This amount is called a deposit, in accordance with Article 441 of the Portuguese Civil Code. In the case of a contract executed on behalf of the seller, the deposit is included in the payment due when it coincides with the latter, pursuant to Article 242, paragraph 1, of the Portuguese Civil Code.
What happens if the promise contract is not fulfilled?
The consequences of breaching a contract, such as a promise to sell, can be defined by the parties to the contract. If the parties do not stipulate otherwise, the general provisions of Article 442 of the Civil Code apply
- If the non-compliance is due to the buyer of the promise, that is to say the party who delivered the deposit, the latter will be abandoned in favour of the counterparty;
- If the non-conformity is the fault of the promising seller, i.e. the party who received the deposit, the deposit must be refunded double.
If the goods referred to in the promised contract are delivered, the promising buyer may choose, instead of receiving double the deposit, to receive the current value of the goods at the time of breach, less the agreed price, plus the deposit and the portion of the price already paid. This solution, enshrined in paragraph 2 of Article 442 of the Civil Code, aims to prevent unjust enrichment of the defaulting party. Otherwise, the double deposit could be advantageous, and consequently, default would also be advantageous.
As stipulated in Article 830, the non-performance of a contract by order also grants the non-defaulting party the right to seek specific performance of the contract. Through this mechanism, the debtor is substituted in the performance, and the creditor obtains satisfaction of their right through legal proceedings, thus establishing the definitive contract. It should be noted that current legislation presumes that the existence of a deposit eliminates the possibility of specific performance of the contract by order, in light of the provisions of Article 830(2) of the Civil Code. However, this presumption is rebuttable.
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