Purchase of real estate - The legality of buildings will no longer be controlled, in Portugal, in the context of the notarization of purchase contracts, effective from 1 January 2024.

On January 8, 2024, Government Law No. 10/2024 came into force, simplifying various procedures in public building law and spatial planning law. One of the most important changes concerns the elimination of the requirement to submit the occupancy permit (or a certificate of the corresponding exemption) and the technical building description when concluding purchase agreements. This exemption has been in effect since January 1, 2024 .

What does this mean for purchase contracts?

Notaries and other professionals with notarial powers are now only required to inform buyers that the building being sold may not have the necessary building permits for its intended use (or construction). There is no longer an obligation to provide corresponding documentation.

Historical overview

• 1951 : Government Law No. 38382/51 introduced the requirement for building permits. This law was directly applicable to urban areas and was gradually extended to all other areas by the various municipalities over the following three decades. With the enactment of this law, the execution of construction projects (new buildings, as well as all renovations and alterations classified by the law as requiring permits) was subject to obtaining a permit before commencing any work.

• 1980s : For the first time, legislators required proof of a building's legality as a prerequisite for its sale. This requirement was most recently enshrined in Government Law No. 281/99 of July 26 (amended by Government Law No. 116/2008 of July 4). According to this law, no purchase agreement for a building could be concluded without the presentation of the required occupancy permit or certificate of exemption (i.e., proof that the building was constructed before the requirement for building permits came into effect and had not subsequently been subjected to any modifications requiring a building permit). The aim was to protect buyers from purchasing illegal buildings.

• 2004 : In addition, when concluding a purchase agreement for a building, the submission of the corresponding technical description became required.

• January 1, 2024 : Both obligations ceased to apply .

Consequences of the change in the law

The previous system of checking the existance of an occupancy permit during property sales was an effective tool for encouraging owners to obtain permits for construction or to retroactively legalize illegal structures. With the new regulations, there is a risk that the Portuguese real estate market will be flooded with illegal buildings – often without buyers being aware of this illegality (and the resulting risks).

Marlene Sennewald Sippel / Carolina Costa