You have found the right property in Portugal. Everything looks perfect. But now you’re facing some difficult questions: How should I proceed? What are the necessary legal documents and who can assist me in the purchasing transaction and ownership process? In Portugal, the professional that represents your rights as a buyer is called “advogado”, meaning lawyer, and it is highly advisable hiring a lawyer to assist you in these procedures.
It is up to the lawyer to verify taxes, and mortgages on the property, write the sell and purchase contract, and all the necessary documentation to conclude the deed. We at Pearls of Portugal are happy to help you, so we’ve prepared this thorough article with all the details you should know regarding the hiring and responsibilities of a lawyer, as well as valuable tips.
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The lawyer (advogado) is the professional who defends your legal interests as a client, respecting the laws in force in the country. And this is key: a lawyer defends your interests and rights.
That isn’t the case with another professional that is part of the property buying process, the notary. The latter performs the public, state delegated function of certifying legal acts, which he/she prepares, writes and archives, informing its users about the legal means and instruments best suited to their interests.
In Portugal, the professional practice of lawyers is regulated by a national public institution: the Portuguese Bar Association (Ordem dos Advogados). It comprises seven Regional Councils, aggregating the lawyers who carry their activity in the corresponding seven districts: Lisboa, Porto, Coimbra, Évora, Faro, Açores, and Madeira. It is important to know that only the Law School graduates with registration in effect at the Ordem dos Advogados may practice law. To confirm that is the case with the lawyer you hire, you simply have to check it by performing a quick search on the Bar’s lawyer search webpage.
In Portugal, a solicitor’s main activity is to advise, guide, and represent individuals, companies, and public organizations – in order to defend the rights entrusted to them – before the administrative bodies and courts or any entities and private or public institutions. It can act on the scope of Civil, Commercial, Corporate, Labor, Administrative, Tax, Misdemeanour, Registration, and Notary Law.
Solicitors (solicitadores) and lawyers in Portugal do have some legal areas in common, but there are substantial differences in their practice. The matters in which a solicitor can represent a client in Court are only those for which the mandatory presence of a lawyer isn’t a requirement. When the criminal process determines that the defendant must be assisted by a defender, or in civil actions not exceeding 5000€, this function must be performed by a lawyer.<
Both solicitors and lawyers are habilitated to act on behalf of their clients in subjects such as the following:
As a foreign investor, when you purchase a property in Portugal a lawyer will not only secure and defend your legal rights and your interest as a buyer, it will also prepare all the required documents and procedures to conclude the transaction successfully.
The process of purchasing a property in Portugal can be divided into 4 phases and in each one of them, the lawyer can have a very important part.
A Lawyer will inform you on the necessary documentation and can obtain them for you by going to the respective official offices or institutions. These include:
Finally, in properties with condominiums, a lawyer should also examine the documents of the condominium, from minutes to financial documentation.
The Promissory Contract of Purchase and Sale (Contrato de Promessa de Compra e Venda) is the precursor to the final Deed. It states the rights and obligations of both buyer and seller, in which the parts commit, by mutual agreement or unilaterally, to the conditions for the signing of a definitive contract, closing the deal.
In Portugal this contract is very common and has its clear utility and advantages, firstly because for once it is faster to conclude than the final Public Deed, therefore allowing a swift binding document between the interest parties, setting the formalization of the deal within an agreed period. Secondly, it is a legally secured guarantee, with consequences in case of delay or breach of contract.
It includes important information such as the purchase price, the down payment, the payment dates and terms, the date for the final Public Deed, and the delivery date. But there are additionally essential and ancillary clauses that must be included in a well-drafted Promissory Contract of Purchase and Sale. In the case of the existence of a mortgage, the contract will also mention that fact.
The importance of a lawyer in preparing and checking the Promissory Contract of Purchase and Sale being indisputable, it also offers you, as a foreign investor, the possibility of signing this contract on your behalf, with a power of attorney issued by you, the same applying for the final Deed. So, if it isn’t possible for you to be physically present at these important formalities because you’re not in Portugal, the lawyer will act as your trusted representative and ensure all the legal aspects, as well as your interests, are taken care of.
The Public Deed of purchase and sale is the final and definitive house purchasing contract. It certifies that one subject has sold a property to another and can be performed at a Notary’s Office, a Land Registry Office, or at a “Casa Pronta” counter (an aggregator service of the Portuguese State for all matters relating to the purchase and sale of houses).
For the signature of the public deed, a number of documents are required, among them being the Land Registry Certificate, the Building Energy Certificate (Certificado Energético), and the Building Technical Document (Ficha Técnica de Habitação).
The costs to conclude the purchase process include the IMT (Imposto Municipal sobre Transacções Onerosas de Imóveis) – which is an imposition by the state and accounts for the biggest cost parcel – the notary or other competent entity that performs this public deed.
The lawyer will attend to the completion of the final deed, accompanying you or, in the case you are absent, as your legal representative with a power of attorney, ensuring all the procedures are compliant with the law and respectful of your interests.
By concluding the Public Deed of the property you purchase, its ownership will automatically be updated in the Land Registry office. But that isn’t the case with the local Tax Office (Finanças), where the updating of the property’s ownership isn’t immediate. To expedite the process either you or your lawyer should go to the Finances with a copy of the deed and demand that change so that you are registered as the responsible for the property taxes.
Additionally, any provisional registrations at the Land Registry Office must be converted to definitive registrations.
It is a long process indeed, and one with many requirements that, unless duly fulfilled, can end up causing delays in the process and unexpected, not to mention, undesired costs and complications. The advice and monitoring a lawyer can lend to your property purchasing plans in Portugal is a valuable asset and one that’s critical for a successful process and final transaction.
You must be aware that the fee a lawyer will charge varies widely, depending on the lawyer you choose and even the area (rural/ urban) in which they operate.
In average, a lawyer will charge a sum ranging from 1% to 1.5% (+VTA) of the property purchase price. Although you may opt to do some of the procedures yourself, unless you are very well advised and informed, it is recommendable and safer for you to hand over to a trusted lawyer all the documentation and legal obligations. At the least, it is practically mandatory that the Promissory Contract of Purchase and Sale and the Final Deed should be prepared and validated by a lawyer.
Now that you have more information on the legal aspects of buying a property in Portugal, you might be worried about the sheer number of steps and procedures you have to go through to conclude your deal and turn your plans into reality
Here you have the opportunity to provide us with a detailed insight of your specific ideas for an investment in Portugal’s real estate.
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