Promissary contract

Promissary contract

The promissory contract is the legal agreement that defines the rules of the transaction, the deadlines and obligations of each party. It is a consensual, bilateral and onerous contract.

It is not compulsory to sign a promissory contract, but it is strongly recommended, as it will guarantee the interests of both parties until the final deed is signed.

If you hire a lawyer for your purchase, the contract will be drawn up by your lawyer (the buyer's lawyer) after checking all the documents of the property in question.

It is also in this document, that the resolutive clause(s) will be inserted, if applicable. Be careful because in Portugal, the resolutive clause about obtaining the bank loan is not usual, so it is necessary to negotiate it with the owner before initiating any step regarding the promissory contract.

Note that, in order for the promissory contract rules to be fully applied to your contract, the signatures of each party must be notarized in person by a lawyer or notary and the entity carrying out the notarization must make sure of the existence of the license of use  or building permit.

It is also at the time of signing the contract that you will have to pay a deposit to validate your commitment. There are no rules regarding this amount either, but it is usual to pay between 10 and 20% of the acquisition amount.

Again, this amount will be paid directly to the seller's account or to their lawyer at the time of signing the contract.

There is no deposit and consignment account in Portugal for this purpose, therefore we advise you to pay this amount through a lawyer, who besides ensuring this payment, will be present to guarantee that you will not have any bad surprises with the acquisition of the property and that the clauses of the promissory contract defend your interests.

The promissory contract is the legal agreement that defines the rules of the transaction, the deadlines and obligations of each party. It is a consensual, bilateral and onerous contract.

It is not compulsory to sign a promissory contract, but it is strongly recommended, as it will guarantee the interests of both parties until the final deed is signed.

If you hire a lawyer for your purchase, the contract will be drawn up by your lawyer (the buyer's lawyer) after checking all the documents of the property in question.

It is also in this document, that the resolutive clause(s) will be inserted, if applicable. Be careful because in Portugal, the resolutive clause about obtaining the bank loan is not usual, so it is necessary to negotiate it with the owner before initiating any step regarding the promissory contract.

Note that, in order for the promissory contract rules to be fully applied to your contract, the signatures of each one of the parties must be certified in person by a lawyer or notary and the entity carrying out the certification must make sure of the existence of the use permit or building permit.

It is also at the time of signing the contract that you will have to pay a deposit to validate your commitment. There are no rules regarding this amount either, but it is usual to pay between 10 and 20% of the acquisition value.

Again, this amount will be paid directly to the account of the seller or his lawyer at the time of signing the contract.

There is no deposit and consignment account in Portugal for this purpose, therefore we advise you to pay this amount through a lawyer, who besides ensuring this payment, will be present to guarantee that you will not have any bad surprises with the acquisition of the property and that the clauses of the promissory contract defend your interests.

The promissory contract is the legal agreement that defines the rules of the transaction, the deadlines and obligations of each party. It is a consensual, bilateral and onerous contract.

It is not compulsory to sign a promissory contract, but it is strongly recommended, as it will guarantee the interests of both parties until the final deed is signed.

If you hire a lawyer for your purchase, the contract will be drawn up by your lawyer (the buyer's lawyer) after checking all the documents of the property in question.

It is also in this document, that the resolutive clause(s) will be inserted, if applicable. Be careful because in Portugal, the resolutive clause about obtaining the bank loan is not usual, so it is necessary to negotiate it with the owner before initiating any step regarding the promissory contract.

Note that, in order for the promissory contract rules to be fully applied to your contract, the signatures of each party must be notarized in person by a lawyer or notary and the entity carrying out the notarization must make sure of the existence of the license of use  or building permit.

It is also at the time of signing the contract that you will have to pay a deposit to validate your commitment. There are no rules regarding this amount either, but it is usual to pay between 10 and 20% of the acquisition amount.

Again, this amount will be paid directly to the seller's account or to their lawyer at the time of signing the contract.

There is no deposit and consignment account in Portugal for this purpose, therefore we advise you to pay this amount through a lawyer, who besides ensuring this payment, will be present to guarantee that you will not have any bad surprises with the acquisition of the property and that the clauses of the promissory contract defend your interests.

Reservation

The reservation is merely an intention to purchase and is not a mandatory document since it can be cancelled at any time and by either one or both parties. In other words, it is not synonymous with a contractual agreement.

Some builders accept to reserve the property, but within a very short period of time (1 week) and usually with the payment of a deposit (2000 euros - 5000 euros, etc...).

There are no rules governing this type of process, and no obligation for the seller to return this amount to the buyer if the purchase is not completed. In the same way, there is no legal rule obliging the seller to keep the property reserved for you during this period.

We therefore do not recommend this step in the process to secure the purchase of your dream property.

The reservation is merely an intention to purchase and is not a mandatory document since it can be cancelled at any time and by either party. In other words, it is not synonymous of a contractual agreement.

Some builders accept to reserve the property, but within a very short period of time (1 week) and usually with a deposit payment (2000 euros - 5000 euros, etc...).

There are no rules governing this type of process, neither is there any obligation for the seller to return this amount to the buyer if the purchase is not completed. In the same way, there is no legal rule obliging the seller to keep the property reserved for you during this period.

We therefore do not recommend this step in the process to secure the purchase of your dream property.

The reservation is merely an intention to purchase and is not a mandatory document since it can be cancelled at any time and by either one or both parties. In other words, it is not synonymous with a contractual agreement.

Some builders accept to reserve the property, but within a very short period of time (1 week) and usually with the payment of a deposit (2000 euros - 5000 euros, etc...).

There are no rules governing this type of process, and no obligation for the seller to return this amount to the buyer if the purchase is not completed. In the same way, there is no legal rule obliging the seller to keep the property reserved for you during this period.

We therefore do not recommend this step in the process to secure the purchase of your dream property.

The reservation is merely an intention to purchase and is not a mandatory document since it can be cancelled at any time and by either party. In other words, it is not synonymous of a contractual agreement.

Some builders accept to reserve the property, but within a very short period of time (1 week) and usually with a deposit payment (2000 euros - 5000 euros, etc...).

There are no rules governing this type of process, neither is there any obligation for the seller to return this amount to the buyer if the purchase is not completed. In the same way, there is no legal rule obliging the seller to keep the property reserved for you during this period.

We therefore do not recommend this step in the process to secure the purchase of your dream property.

Deed

The deeds can be performed in private notary's offices, in registry offices which are public services or in banking institutions through private certified documents.

The prices are very similar in the different services.

Regarding the notary, specifically in Portugal, he/she is responsible for drafting the deed and verifying the validity of the documents, but does not deal with the verification of debts, seizures, charges, ... or verification of preferential rights, usufructs, condominium matters or servitude, or even to know if the existing pool is legal or not.

It is always important to carry out the necessary checks (again, hence the usefulness of a lawyer), as you may be facing unpleasant surprises, such as unpaid taxes, electricity bills, a huge mortgage or personal debts that would have been guaranteed by the property and are yours now that you have purchased the property.

The notary reads the final deeds aloud on the agreed day, certifying the signatures and the financial agreement between the seller and the buyer. If you do not understand the official language (in this case Portuguese), you will have to be accompanied by a translator (if you have contracted a lawyer, he/she will take over this function).

If you contract a loan with a bank for this acquisition, the bank will be represented at the deed and will make the payment (total or partial) to the seller with a bank cheque.

Reminder: The notary does not have a deposit account. The final balance of the purchase is therefore paid by bank cheque directly to the seller.

You should also make sure that the notary you choose will be able to issue the tax forms to be paid to the tax authorities (see section Other fees) and that he will register your purchase at the land registry.

Cost: with regard to property sales and purchases, notaries are currently free to set the price they think appropriate, however, prices do not vary much:

Example of fees for the preparation of the deed: between 350 and 700 euros + VAT

Example of fees for the registration of the deed at the Conservatory for Land Registry: 225 euros for 1 registration . Be careful, because you may acquire a property with several articles and even with a loan, which may lead to other registrations.

The deeds can be performed in private notary's offices, in registry offices which are public services or in banking institutions through private certified documents.

The prices are very similar in the different services.

Regarding the notary, specifically in Portugal, he/she is responsible for drafting the deed and verifying the validity of the documents, but does not deal with the verification of debts, seizures, charges, ... or verification of preferential rights, usufructs, condominium matters or servitude, or even to know if the existing pool is legal or not.

It is always important to carry out the necessary checks (again, hence the usefulness of a lawyer), as you may be facing unpleasant surprises, such as unpaid taxes, electricity bills, a huge mortgage or personal debts that would have been guaranteed by the property and are yours now that you have purchased the property.

The notary reads the final deeds aloud on the agreed day, certifying the signatures and the financial agreement between the seller and the buyer. If you do not understand the official language (in this case Portuguese), you will have to be accompanied by a translator (if you have contracted a lawyer, he/she will take over this function).

If you contract a loan with a bank for this acquisition, the bank will be represented at the deed and will make the payment (total or partial) to the seller with a bank cheque.

Reminder: The notary does not have a deposit account. The final balance of the purchase is therefore paid by bank cheque directly to the seller.

You should also make sure that the notary you choose will be able to issue the tax forms to be paid to the tax authorities (see section Other fees) and that he will register your purchase at the land registry.

Cost: with regard to property sales and purchases, notaries are currently free to set the price they think appropriate, however, prices do not vary:

Example of fees for the preparation of the deed: between 350 and 700 euros + VAT

Example of fees for the registration of the deed at the Conservatory for Land Registry: 225 euros for 1 registration .

Be careful, because you may acquire a property with several articles and even with a loan, which may lead to other registrations.

The deeds can be performed in private notary's offices, in registry offices which are public services or in banking institutions through private certified documents.

The prices are very similar in the different services.

Regarding the notary, specifically in Portugal, he/she is responsible for drafting the deed and verifying the validity of the documents, but does not deal with the verification of debts, seizures, charges, ... or verification of preferential rights, usufructs, condominium matters or servitude, or even to know if the existing pool is legal or not.

It is always important to carry out the necessary checks (again, hence the usefulness of a lawyer), as you may be facing unpleasant surprises, such as unpaid taxes, electricity bills, a huge mortgage or personal debts that would have been guaranteed by the property and are yours now that you have purchased the property.

The notary reads the final deeds aloud on the agreed day, certifying the signatures and the financial agreement between the seller and the buyer. If you do not understand the official language (in this case Portuguese), you will have to be accompanied by a translator (if you have contracted a lawyer, he/she will take over this function).

If you contract a loan with a bank for this acquisition, the bank will be represented at the deed and will make the payment (total or partial) to the seller with a bank cheque.

Reminder: The notary does not have a deposit account. The final balance of the purchase is therefore paid by bank cheque directly to the seller.

You should also make sure that the notary you choose will be able to issue the tax forms to be paid to the tax authorities (see section Other fees) and that he will register your purchase at the land registry.

Cost: with regard to property sales and purchases, notaries are currently free to set the price they think appropriate, however, prices do not vary:

Example of fees for the preparation of the deed: between 350 and 700 euros + VAT

Example of fees for the registration of the deed at the Conservatory for Land Registry: 225 euros for 1 registration .

Be careful, because you may acquire a property with several articles and even with a loan, which may lead to other registrations.

The final deeds of purchase and sale can be performed in private notary's offices, in registry offices which are public services or in banking institutions through private certified documents.

The prices are very similar in the different services.

Regarding the notary, specifically in Portugal, the Notary is responsible for drafting the deed and verifying the validity of the documents, but does not deal with the verification of debts, seizures, charges, ... or verification of preferential rights, usufructs, condominium matters or servitude, or even to know if the existing pool is or not legalized.

It is always important to carry out the necessary verifications (again, hence the usefulness of a lawyer), as you may be facing unpleasant surprises, such as unpaid taxes, electricity bills, a huge mortgage or personal debts that would have been guaranteed by the property and are yours now that you have purchased the property.

The notary reads the final deeds out loud on the agreed day, notarizing the signatures and the financial agreement between the seller and the buyer. If you do not understand the official language (in this case Portuguese), you will have to be accompanied by a translator (if you have contracted a lawyer, they will take care of this).

If you contract a loan with a bank for this acquisition, the bank will be represented at the deed and will make the payment (total or partial) to the seller with a bank cheque.

Reminder: The notary does not have a deposit account. The final balance of the purchase is therefore paid by bank cheque directly to the seller.

You should also make sure that the notary you choose will be able to issue the tax guides to be paid to the tax authorities (see section Other fees) and that the Notary will register your purchase at the land registry.

Cost: with regard to property sales and purchases, notaries are currently free to set the rate they find appropriate, however, prices do not vary:

Example of fees for the preparation of the deed: between 350 and 700 euros + VAT

Example of fees for the registration of the deed at the Land Registry Office : 225 euros per registration .

Be careful, because you may acquire a property with several articles and even with a loan, which may lead to other registrations.