CPCV

The CPCV - Contrato Promessa Compra e Venda (Promissory Contract of Purchase and Sale) of a property is used in almost all transactions carried out in Portugal and is legally binding for both parties. It should express all the clauses and conditions of the purchase and sale. This contract will set out in detail all the procedures by which the transaction will be carried out and its conditions of sale. The document should contain the following information:

• The definition of the buyer and seller
• The clear title of ownership
• The maximum time allowed for completion
• The payment schedule
• The standard penalty clauses, should either party fail to fulfil the contract
• And, if applicable, an inventory list may also be attached

It is usually the buyer's lawyer who prepares the CPCV. Beforehand, and for your own benefit, he or she should carry out all the legal research on the property in question. This will ensure that there are no outstanding charges or debts against it, such as infrastructure maintenance costs, rates, property taxes or condominium fees, for example.

When signing this contract, a deposit must be paid, normally 10% (or another amount to be agreed between the parties) of the total purchase price previously agreed. The reservation deposit will be subtracted from this amount. This deposit constitutes a legal guarantee for both the buyer and the seller. Therefore, if the former fails to honour the contract, he will lose the right to the amount paid; if the latter fails to honour the contract, the former will be entitled to double the amount initially paid. This contract can be signed personally by the parties or by their legal representatives and is usually signed by both parties in the presence of a notary or lawyer.

Other steps that make up the process of buying a property in Portugal:

• The Property Purchase Process
• Reserving a property for purchase
• Public Deed and Registration of a Property
• Living the Dream. Living in the Algarve!