Portuguese Property Purchase and Sale agreement
Learn everything about Portugal’s CPCV and its role when it comes to purchasing real estate in the country.
There are several ways to obtain Portuguese Property Purchase and Sale agreement. Our real estate lawyers will guide you through the process step-by-step.
How can a lawyer help with the CPCV?
Our team of real estate lawyers have vast experience with how to best prepare a CPCV that protects your rights. The lawyers at Lexidy understand what should be included in a typical contract and under what circumstances they can be adjusted. Our real estate experts will ensure that the right clauses and conditions are included in the CPCV, so that your interests are put first.
Experienced real estate professionals are here to identify and prevent risks, too. Some properties have hidden defects or issues with their documentation, so it’s important to work with an lawyer who knows what to look out for.
¨We will be with you each step of the journey.¨
What is a CPCV?
A CPCV, or Contrato de Promessa de Compra e Venda, (promise purchase and sale contract) is a commonly used contract in Portuguese real estate transactions. It’s a legally binding agreement between a buyer and seller with the aim of confirming that the real estate deal will proceed.
While it’s a normal part of conducting real etate agreements in Portugal, it constraints terms and conditions that are unlike many other countries. The CPCV is effectively a promise to purchase and sell a property and ensures the rights of all parties’ rights are protected.
A CPCV formally reserves a property deal when the parties are still formalising certain elements, such as finalising a mortgage agreement or ending a licensing procedure. However, if one party withdraws from the deal, the other party is entitled to compensation, which is usually outlined in the contract.
How do they work?
During a property transaction in Portugal, a buyer will put down a deposit of 10%. The exact percentage can vary depending the demand’s the seller or buyer and would be cited in the CPCV.
If the CPCV is breahed by the buyer, the seller can claim the deposit as compensation. This is rare but if it occurs, it’s usually when the buyer refuses to sign the final contract.
Alternatively, if the seller declines to sign the final agreement and pulls out of the deal, they are usually obligated to pay double the deposit to the buyer as a penalty
What’s the Process for a CPCV?
1. Gather the relevant documentation for the property transaction, which typically takes clients up to 15 days
2. Verify the viability of the property and the paperwork. We suggest allocating up to 30 days for this.
3. Draft the CPCV. We will spend up to five days on this step, depending on the other party demands.
4. Sign the contract. You can do this without being physically present in Portugal by granting Lexidy’s Real Estate experts “Power of Attorney”
Requirements for CPCV
There are no mandatory requirements for CPCV, it’s crucial that you have a real estate lawyer in your corner who can carefully review the documentation and ensure it meets a common standard.
A real estate expert will ensure that you minimize the risk of exposing your down payment or other compensation if a transaction doesn’t work out.
We always recommend a CPCV includes the following:
Identifying the parties involved
A description of the property and its characteristics
Indication of the transaction value and payment method
Deadlines for the executing the deed or the maximum period for the executing the deal
Identifying sanctions if the transaction falls through
The down payment made by the potential buyer
Clauses that ensures the property is habitable
The CPCV must also attach the use or construction license. If it does not exist, the buyer or seller must attach proof that it has been requested from the City Council. If this isn’t possible, there must be a declaration that replaces it.
Frequently Asked Questions
It is very common to have a value involved in the promissory purchase and sale contract, called a down payment. This is a monetary amount, which the buyer delivers to the promissory seller and is a guarantee of fulfilling the contract.
The down payment normally varies between 10 and 20% of the asset’s price.
If the seller fails to comply with the sale and purchase agreement, they must pay the buyer double the down payment.
On the other hand, if the buyer breaches the contract, the seller can keep the down payment.
Portuguese law requires this document to have legal value and must have the face-to-face recognition of those signing. Otherwise, it is neither valid nor effective.
We are a department formed by qualified legal experts who have been trained in the field of real estate law. We work on these requests every day and it’s our passion. For us, Lexidy is a way of life and what excites us the most is to be able to deliver the happiness and satisfaction of a successful real estate process. We want to help you achieve your goals and dreams.
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