PURCHASE- SALE- REAL ESTATE
Deeds (Escritura de imóvel) : what you need to know
After having gone through the different stages of buying a house, from the search for the property, the visit, the choice, the negotiation of the price and the signing of the purchase contract, it is time to sign the deed.
What you need to consider before making a deed of sale.
The deed of purchase/sale (Escritura de um imóvel)
The notarial deed is the act by which the purchase and sale of real estate is established. It is carried out by means of a contract and constitutes the last phase of the whole process.
Normally it is preceded by the contract of promise of purchase and sale, where a value is paid that proves the interest in buying the property. ( **Information at the end of the file)
In this document, a deadline is stipulated, followed by the completion of the act, if the buyer so wishes. If the buyer does not wish to continue the transaction, he loses the right to the value of the deposit. (Deposit = O sinal)
On the day of the deed, the presence of both parties (buyer and seller) is mandatory in order to be able to sign it. The document is signed in front of a competent element who certifies the fulfillment of the law, thus testifying to the purchase and sale of the property. This body will have to verify and prove the identity of the two parties.
The deed of sale and mortgage consists of two moments:
- 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 loan, an over-the-counter contract is drawn up, where all the steps concerning the loan are defined. It is only then that the bank releases the amount requested by the client for the purchase of the house.
Required documents
- Civil and fiscal identification documents of stakeholders;
- Promissory contract for the purchase and sale of property
- Caderneta Predial Urbana or Application for registration of property in the matrix (Model I of IMI) issued by the Tax and Customs Authority
- User license
- Technical sheet of the building
- Energy certificate
- Certificate of content
- Infrastructure Certificate
- Mortgage deeds
- Certificate of toponymy
- Payment of the IMT (municipal property transfer tax).
- Payment of stamp duty.
Where to have the deed drawn up (in person and online)
- Notaries ;
- Land registry offices;
- Casa Pronta Service ;
- Casa Simple Casa Segura Service
Amount cost of the title deed
All deed costs are normally borne by the home buyer. There is no exact value that can be attributed to this process, as it depends on a series of factors, namely:
- Purchase price of the house;
- Whether it is a first or a 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, registry or notary services;
- Costs associated with the payment of the IMT (IMT = value of the deed or value of the wealth tax (the higher of the two) x rate to be applied – part to be deducted. The IMT rates can be consulted on the portal financial ;
- Place where the document will be drawn up.
Registration of the deed
- Fees with CASA Pronta, Land Registry or Notary Services Costs associated with paying IMT (IMT = Deed Value or Wealth Tax Value (whichever is greater) x Rate to apply – share to be deducted IMT rates can be viewed on the financial portal;
Registration deadlines
It may take more or less time, depending on how long it takes to complete the various stages of buying and selling a property.
Generally and as an indication:
- Obtaining Certificate of Title or Land Registry Certificate – 5 to 20 days;
- Residence permit – 7 to 30 days;
- Contract of promise to purchase and sale – 7 to 30 days;
- Signature of the deed – 14 to 90 days;
- Conclusion of the case in order to obtain the certificate of title and the certificate of the land registry
- 1 week to 1 month to receive the residence permit if the seller does not have one
- 1 week to 1 month to negotiate the terms of the promissory 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 deeds
There are several types of acts, which differ according to the objective and the type of transaction. Below and in full
- Deed of purchase and sale – the most common and best known;
- Deed of purchase and sale with recourse to a financial institution – equal to the previous one but with bank intervention, due to the need for credit;
- Deed for inherited property – the deed is usually carried out in the bodies mentioned above. The property must be in your name to be able to sell it. 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 a bargain as it is usually a cheaper purchase, the property is new and you have more time to plan. However, it also has its drawbacks, the works may not be completed or may be completed later than expected and the finishes may be different from what you had envisaged;
- Deeded ownership – 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. property ;
- Deed of Property Exchanged – 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 that owns the asset with the lower value will have to pay the remaining value.
Promise of sale and purchase contract
(Contrato de promise de compra e venda)
CPCV. This is sure to be an acronym that many people will be familiar with. We are talking about the promise of sale contract, which is fundamental when buying a house, both for the current owner and for those interested in buying the property.
Constituting the first phase of the process of buying a property, the CPCV is very useful for those who want to buy a house. Although not mandatory , it is the mechanism used to formalize the intent to buy by the prospective buyer and to sell by the prospective seller.
In addition to offering great protection to the contracting parties , particularly in relation to situations of default of payment, it makes it possible to exclude other interested parties from purchasing the property.
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 deed, 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 promissory contract is even more advantageous in the case of the purchase and sale of real estate since, between the moment the parties decide to contract and the signing of the final contract, the conditions necessary for the public deed may not be fulfilled.
For example, in the event that the buyer does not have the necessary value to acquire the property, there will be the waiting time for the approval of the housing loan by the bank, or if the property is still under construction or does not have a housing permit, it is useful to sign a CPCV. This contract makes it possible to formalize a negotiation link between the contracting parties.
In addition, the promissory contract provides greater legal certainty in the relationship between the promissory seller and the promissory buyer, as it defines the consequences in the event of late payment or breach of contract by the parties.
The deposit (Sinal) : What is it for?
Typically, in preliminary sales contracts, the promisor buyer pays a certain amount of money to the promisor seller as an advance (Sinal ) or principal payment of the price of the good. This amount is called a deposit, according to article 441 of the Portuguese Civil Code. In the event of execution of the promissory contract, the deposit is included in the payment due when it coincides with the latter, in the light of article 242, paragraph 1, of the Portuguese Civil Code.
What happens if the promise contract is not fulfilled?
The consequences of the breach of the contract, promise of sale, can be defined by the parties to the contract. If the parties do not stipulate it, the general regime of article 442 of the CC applies:
- If the non-compliance is due to the buyer of the promise, that is to say the party who delivered the deposit, this will be abandoned in favor of the counterparty;
- If the non-compliance is the fault of the promising seller, that is to say the party who received the deposit, this must be refunded in duplicate.
If there is delivery of the property to which the promised contract refers, the promising buyer may choose, instead of returning the double deposit, to receive the current value of the property, at the time of the breach, less the agreed price, plus the deposit and the part of the price which has been paid. This solution, enshrined in No. 2 of Article 442 of the Civil Code, aims to avoid unjustified enrichment of the defaulting party. Otherwise, double depositing could be advantageous and therefore defaulting would also be advantageous.
As stated in Section 830, breach of the promissory contract also gives the non-defaulting party the right to seek specific performance of the contract. Thanks to this mechanism, the debtor is substituted in the execution and the creditor obtains the satisfaction of his right by legal means, thus constituting the definitive contract. It should be noted that the current legislation presumes that the existence of a deposit eliminates the possibility of a specific performance of the promissory contract in the light of the provisions of Article 830(2) CC. a rebuttable presumption.
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