Community properties include apartments, townhouses, and detached (single-family) homes on a private estate with communal areas and facilities. Almost all properties that are part of a development ( urbanização) are community properties. In general, the only properties that don’t belong to a community are detached houses built on individual plots in public streets or on rural land.
Owners of community properties not only own their homes, but also own a share of the common elements of a building or development, including foyers, hallways, passages, lifts, patios, gardens, roads, and leisure and sports facilities (such as swimming pools and tennis courts). When you buy a community property, you automatically become a member of the community of owners ( comunidade de proprietários), which includes over two-thirds of all foreign property owners in Portugal.
Many community developments are located in or near coastal resorts and offer a range of communal facilities such as a golf course, swimming pools, tennis courts, a gymnasium or fitness club, and a bar and restaurant.
Golf homes are popular, as no one can build in front of you and spoil your view, and you can consider the golf course as your lawn and garden. They also usually include discounts on green fees or even ‘free’ golf membership. Most developments have landscaped gardens and some also offer high security and a full-time porter (porteiro). At the other extreme, cheaper, older developments may consist of numerous cramped, tiny apartments with few, if any, amenities. Bear in mind that many community developments are planned as holiday homes and may not be attractive as permanent homes.
The advantages of owning a community property include increased security; lower property taxes than detached homes; a range of community sports and leisure facilities; community living with lots of social contacts and the companionship of close neighbours; no garden, lawn or pool maintenance; fewer of the responsibilities of home ownership; ease of maintenance; and the opportunity to live in an area where owning a single-family home would be prohibitively expensive or impossible, e.g. a beach front or town centre.
The disadvantages of community properties may include excessively high community fees (owners may have no control over increases); restrictive rules and regulations; a confining living and social environment and possible lack of privacy; noisy neighbours (particularly if neighbouring properties are rented to holidaymakers); limited living and storage space; expensive covered or secure parking (or insufficient off-road parking); and acrimonious owners’ meetings, where management and factions may try to push through unpopular proposals (sometimes using proxy votes). Bear in mind that unless it’s prohibited in the community rules, anyone can buy up community properties and turn them into timeshares.
Before buying a community property it’s wise to ask current owners about the community. For example, do they like living there; what are the fees and restrictions; how noisy are other residents; are the recreational facilities easy to access; would they buy there again (why or why not?); and, most importantly, is the community well managed.
You may also wish to check on your prospective neighbours and if you’re planning to buy an apartment above the ground floor you may want to ensure that the building has a lift. Note that upper floor apartments are both colder in winter and warmer in summer and may incur extra charges for the use of lifts (they do, however, offer more security than ground floor apartments). An apartment that has other apartments above and below it will generally be more noisy than a ground or top floor apartment.
Community of Owners
In an apartment block or community development the developer divides the costs of the communal areas between the owners, who must form a community of owners ( comunidade de proprietários). You should never buy a property in an urbanisation where there isn’t a legal community of owners. Some communal areas (such as roads) may be cared for by the local municipality, provided it has approved the urbanisation plan and has included it in its general plan for the municipality.
An approved urbanisation has the same right to public support as any other part of a municipality. Before buying a community property, it’s essential to obtain a copy of both the law of horizontal division ( lei de propiedade horizontal) and the community rules, and have them explained to you. Portuguese law requires that all communities have their own set of statutes ( estatutos/regras) which identify property that’s owned privately and property owned communally.
Community properties vary enormously in price and quality, for example from around €80,000 for a studio or one bedroom apartment in an average location to several hundred thousand euros for a luxury apartment, townhouse or villa in a prime location. Garages and parking spaces must usually be purchased separately in developments, although it’s unusual for developments to have lock-up garages or spaces in an underground car park.
If you’re buying a resale property, check the price paid for similar properties in the same area or development in recent months, but bear in mind that the price you pay may have more to do with the seller’s circumstances than the price fetched by other properties. Find out how many properties are for sale in a particular development; if there are many on offer you should investigate why, as there could be management or structural problems. If you’re still keen to buy, you can use any negative points to drive a hard bargain.
A community of owners has an elected president ( presidente) and a paid administrator ( administrador), who may be a professional administrator from outside the community. The general running of a community is carried out by the administrator, a position that’s automatically assumed by the president if an administrator isn’t elected.
The community of owners must be registered and all community books and documentation must be in Portuguese, although they can be translated into other languages for owners. All owners are required to attend an annual general meeting during the first two weeks of January, although they can name someone to represent and vote for them by proxy. The meeting is to discuss and approve the accounts for the previous year, approve expenses for the current year, and elect the president and committee members.
Owners of community properties must pay community fees ( gastos de comunidade) for the upkeep of communal areas and for communal services. Charges are calculated according to each owner’s share ( quota/acção de proprietário) of the development or apartment building and not whether they’re temporary or permanent residents.
Shares are calculated according to the actual size of properties, e.g. ten properties of equal size would each pay 10 per cent of community fees. The percentage to be paid is detailed in the property deed (escritura). Shares not only determine the share of fees to be paid, but also voting rights at general meetings.
Fees go towards road cleaning; green zone maintenance (including communal and possibly private gardens); cleaning, decoration and maintenance of buildings; porterage or concierge; communal lighting in buildings and grounds; water supply (e.g. swimming pools, gardens); insurance; administration fees; urbanisation rates; maintenance of radio and TV aerials; and satellite TV charges.
Fees may also include the external painting of individual villas; rubbish collection; telephone message and mail forwarding services; reading utility meters; police registration; paying utility bills; reception service (possibly 24-hour); airing of properties when not in use; and security. A float (deposit) may be required to cover ongoing expenses such as electricity, gas, water, insurance and maintenance.
Always check the level of general and any special charges before buying a community property. Fees are usually billed monthly or bi-annually and adjusted at the end of the year when the actual expenditure is known and the annual accounts have been approved by the committee.
If you’re buying an apartment from a previous owner, ask to see a copy of the service charges for previous years and the minutes of the last annual general meeting, as owners may be ‘economical with the truth’ when stating service charges, particularly if they’re high. You should obtain receipts for the previous five years (if applicable).
Community fees vary considerably according to the communal facilities provided. For example, fees for a small apartment in a small, older block may be as little as €300 per year, whereas fees for a large luxury penthouse in a modern prestigious development can be well over €1,000 per year. Fees for a typical two-bedroom apartment costing around €150,000 are around €300 per year. In luxury developments with extensive sports and leisure facilities fees may range from €2,000 for a studio to over €4,500 for a three-bedroom villa.
High fees aren’t necessarily a negative point (assuming you can afford them), provided you receive value for money and the community is well managed and maintained. The value of a community property depends to a large extent on how well the development is maintained and managed. Note, however, that many communities in Portugal aren’t well run.
Non-payment of Fees
Some communities have severe debt problems because of the non-payment of fees, which in turn leads to management failing to maintain facilities such as lifts, lighting and security systems when they break down. Check how many defaulters there are in a development and avoid those with a large number. Try to find out why people have defaulted, as it may be that an urbanisation has problems. Ensure that fees have been paid up to date before buying a community property, otherwise you could be liable for any unpaid fees.
Owners with unpaid community fees may have their voting rights at general meetings cancelled, although a community may not cut off services such as water to an owner who fails to pay his community fees. If an owner doesn’t pay his community fees, his property can be embargoed by the community of owners and if he continues to refuse to pay it can eventually be forcibly sold at auction. A community of owners may also be able to recover debts in Portugal from owners or previous owners by suing them in another country.
Maintenance & Repairs
If necessary, owners can be assessed an additional amount to make up any shortfall of funds for maintenance or repairs. You should check the condition of the common areas (including all amenities) in a development and whether any major maintenance or capital expense is planned for which you could be assessed.
Old run-down apartment blocks can have their community fees increased substantially to pay for new installations and repairs (such as a new water supply or sewage installations). Enquire about any planned work and obtain a copy of the minutes of the last annual meeting where important matters are bound to have been raised. Owners’ meetings can become rather heated when finances are discussed, particularly when assessments are being made to finance capital expenditure.
Community rules allow owners to run a community in accordance with the wishes of the majority, while at the same time safeguarding the rights of the minority. Rules usually include such things as noise levels; the keeping of pets (usually permitted, although some communities prohibit all pets); renting; exterior decoration and plants (e.g. the placement of shrubs); garbage disposal; the use of swimming pools and other recreational facilities; the activities of children (e.g. no ball games or cycling on community grounds); parking; business or professional use; use of a communal laundry room; the installation and positioning of satellite dishes; and the hanging of laundry. Check the rules and discuss any restrictions with residents.
If you’re buying a holiday home that will be vacant for long periods (particularly in winter), don’t buy in an apartment block where heating and/or hot water charges are shared, otherwise you will be paying towards your co-owners’ bills. This is unusual in resort areas in Portugal, although water and garbage collection may be charged communally. You should also check whether there are any rules regarding short or long-term rentals or leaving a property unoccupied for any length of time.
Bear in mind that when buying in a large development, communal facilities may be inundated during peak periods, e.g. a large swimming pool won’t look so big when 100 people are using it and getting a game of tennis can be difficult during peak periods.