Completion

The final step

Completion (or closing) is the name for the signing of the final deed ( escritura de compra e venda), the date of which is usually one or two months after signing the promissory contract, as stated in the contract (although it may be ‘moveable’).

Completion involves the signing of the deed of sale, transferring legal ownership of a property, the payment of the balance of the purchase price, plus other payments such as the notário’s fees and the deed registration fee. SISA must be paid before the signing of the escritura and is usually paid a few days earlier. The receipt must be presented to the notary at the completion and is retained by him (so obtain a copy for your records).

Final Checks: Property is sold subject to the condition that it’s in at the time of completion (not when first viewed) and therefore you should be aware of anything that occurs between signing the promissory contract and completion.

Before signing the deed of sale, it’s important to check that the property hasn’t fallen down or been damaged in any way, e.g. by a storm, vandals or the previous owner. If you’ve employed a lawyer or are buying through an agent, he should accompany you on this visit. You should also do a final inventory immediately prior to completion (the previous owner should have already vacated the property) to ensure that the vendor hasn’t absconded with anything that was included in the price.

You should have an inventory of the fixtures and fittings and anything that was included in the contract or purchased separately, e.g. carpets, light fittings, curtains or kitchen appliances, which should be present and in good working order. This is particularly important if furniture and furnishings (and major appliances) were included in the price. You should also ensure that expensive items (such as kitchen apparatus) haven’t been substituted by inferior (possibly second-hand) brands. Any fixtures and fittings (and garden plants and shrubs) present in a property when you viewed it should still be there when you take possession, unless otherwise stated in the contract.

If you find anything is missing, damaged or isn’t in working order you should make a note and insist on immediate restitution such as an appropriate reduction in the amount to be paid. In such cases it’s normal for the notário to delay the signing of the deed until the matter is settled, although an appropriate amount could be withheld from the vendor’s proceeds to pay for repairs or replacements.

You should refuse to go through with the purchase if you aren’t completely satisfied, as it will be difficult or impossible to obtain redress later. If it isn’t possible to complete the sale, you should consult your lawyer about your rights and the return of your deposit and any other funds already paid.

N.B. It’s also important to check that no charges have been registered against a property at the ( conservatória do registo predial) that don’t appear on the certidão de registro. This must be done on the day of the completion.

Signing

The final act of the sale is the signing of the escritura, which takes place in the notário’s office. Before the deed of sale is signed, the notário checks that all the conditions contained in the contract have been fulfilled. It’s normal for all parties to be present when the deed of sale is read, signed and witnessed by the notário, although a party can give someone power of attorney ( procuração público) to represent them. This is quite common among foreign buyers and sellers, and can be arranged by a notary in Portugal or at a Portuguese mission abroad (which is more expensive).

If a couple buy a property in both their names, the wife can give the husband power of attorney (or vice versa). The notário reads the escritura aloud and both the vendor and buyer must sign it indicating that they have understood and accept the terms of the document. If you don’t understand Portuguese you should take along an interpreter. It isn’t necessary to have your lawyer present at the completion.

Payment

The balance of the price, after the deposit and any mortgages are subtracted, must be paid by banker’s draft or bank transfer. For most people the most convenient way is by banker’s draft, which also means that you will have the payment in your possession (a bank cannot lose it!) and the notário can confirm it immediately. It also allows you to withhold payment if there’s a last minute problem that cannot be resolved.

When the vendor and buyer are both foreigners, they can agree that the balance is paid in any currency and payment can also be made abroad. However, the deed of sale must state the sale price in euros and fees and taxes must be paid on this price. At the time of signing, both the vendor and buyer declare that payment has been made in the agreed foreign currency. In this case the payment should be held by a lawyer or solicitor in the vendor’s or buyer’s home country.

Registration

After signing the escritura you should request a number of notarised copies for your records. The original deeds are stored in the notary’s office and a certified copy is produced and registered at the land registry ( conservatória do registo predial) by the notário. Note that it can take some months to complete the registration. It’s important to send the certified copy of the escritura to the property registry as soon as possible, preferably the same day that it’s signed.

Registering ownership of a property is the most important act of buying property in Portugal, because until the property is registered in your name, even after you’ve signed the contract before the notary, charges can be fraudulently registered against it without your knowledge. The reason is that under Portuguese law, title is only enforceable against third parties after registration of the property at the land registry (not by signing the escritura). Only when the escritura has been registered at the land registry are you the legal owner of the property.

The purchase must also be registered with the tax office ( reparticão de finanças), who require the buyer’s tax number and a copy of the initial pages of his passport. Don’t forget to transfer all utilities into your name from the day of completion.

This article is an extract from Buying a Home in Portugal. Click here to get a copy now.

Further reading

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