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Promissory Contract of Sale (CPCV) in Portugal

The promissory contract of sale (CPCV), as the name indicates, is a contract that guarantees a future purchase/sale of real estate in Portugal. It establishes the rights and duties of both the buyer and the seller and details the property’s characteristics. 

Adélia Carvalho

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Understanding the promissory contract (CPCV) in Portugal

The promissory contract (CPCV) is an essential part of the property purchase cycle. Although not obligatory, it is, more often than not, necessary. For example:

  • If you want to guarantee the purchase of the property, but the loan has not yet been approved
  • The property is still under construction
  • You are selling your current property and need the money from that sale
  • The owner is still waiting for a license to use the property, among others.

The CPCV also sets a deadline for when the official deed of the sale is to be celebrated. As a rule, this deadline is set for 90 days.

Structure of the CPCV

This contract begins by identifying all the parties involved; the property and its characteristics; the price and method of payment; the penalties in the event of non-compliance with the contract; the amount of the deposit and other clauses applicable to each specific case.

As a general rule, in the event of non-compliance with the CPCV by the promissory vendor, he will have to return the down payment in double to the buyer. On the other hand, if the promissory buyer fails to fulfil the sale, the latter forfeits the deposit given when the CPCV was signed.

promissory contract cpcv portugal
Typical houses in Lisbon
Frederik Pohl
Frederik Pohl, CEO
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Making the promissory contract deposit in Portugal

After signing the promissory contract in Portugal, the buyer usually pays a deposit constituting a percentage of the total purchase price. The height of the downpayment ultimately depends on the agreement, but in most cases, a downpayment of 10% of the total purchase price is made. Buyers make this deposit when signing the promissory agreement in Portugal.

This deposit serves as the guarantee of the buyer’s commitment. Most clauses would include forfeiture of the warranty if the buyer will not proceed with the sale or violate any terms and conditions.

The importance of the CPCV

A great adviser, buyer’s agent or lawyer would always insist on having a promissory contract.

1. It provides assurance

By signing a promissory contract, both the buyer and the seller commit to the terms and conditions of the property sale. It provides security and creates a legal obligation for both parties to proceed with the transaction.

2. The deposit provides security 

As mentioned, a promissory contract in Portugal always comes with a deposit payment, which benefits both parties. For the seller, the deposit acts as a form of assurance that the buyer is serious about the transaction and compensates them if the buyer fails to fulfill their obligations. On the other hand, the deposit assures the buyer that they have priority over other potential buyers. It is essential, especially in competitive property markets.

3. Gives time to prepare for the final sale

The CPCV allows time for various procedures to be carried out, such as house inspections, due diligence, obtaining financing, and resolving any legal or administrative matters. This interim period allows both parties to complete necessary tasks and address potential issues before the final signing. It guarantees that the final deed of purchase and sale is free from errors and liabilities.

What documents are required for the CPCV in Portugal?

Information that must be included in the CPCV:

  • Identification of the promissory seller and the promissory buyer;
  • Identification of the property (indication of the property’s registration number, address, etc);
  • Purchase price of the property and method of payment;
  • Amount of the down payment for the deposit;
  • The consequences of non-compliance.

It’s important to note that the specific contents and provisions of a promissory contract in Portugal may vary based on the individual agreement between the parties and any applicable laws or regulations. Happy buying!

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2 Responses

  1. What happens when a Portuguese developer we purchased our brand new T3 lisbon apartment from does not deliver the exact gross private area as posted in the CPCV? Our apartment CPU has a short of 46 square meters in gross private area in comparison to what was agreed to in the signed CPCV.

    1. Dear Gerald, It happens sometimes that there is a difference in the “registro predial” and the “caderneta predial” when you buy old houses. New buildings should no have any difference of what was promissed in the CPCV. I would suggest to talk to a lawyer to analyse the situation. You can enter in contact with us and we put you in contact with a legal partner Lisbon. Best Frederik

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