CPCV in Portugal:
What Buyers Should
Check Before Signing.

For many international buyers, the CPCV is the point at which a Portuguese property purchase starts to feel very real.

CPCV stands for Contrato-Promessa de Compra e Venda, usually translated as a promissory contract of purchase and sale.

It sets out the commitment between buyer and seller to proceed with the transaction under agreed terms.

It is also commonly the stage at which the buyer pays a substantial deposit.

That combination makes the CPCV much more than an administrative step between an accepted offer and completion.

Before signing, the property should have been appropriately checked, the important terms of the transaction should be understood and your lawyer should have reviewed the actual contract you are being asked to sign.

This guide explains some of the questions a property buyer should consider.

It is not a substitute for legal advice on your individual CPCV.

A CPCV is a contract under which the parties undertake to enter into the final property purchase agreement.

For a typical property transaction, it identifies the parties and property and records the principal terms under which buyer and seller have agreed to proceed.

The precise contents matter because CPCVs are not simply interchangeable standard forms.

The appropriate provisions depend on the property, the buyer, the seller, financing arrangements, documentation, agreed deadlines and any conditions that need to be satisfied before completion.

For that reason, I would not treat a CPCV as something to sign simply because the document looks familiar or has been described as standard.

A buyer will commonly pay a deposit when the CPCV is signed.

In Portuguese law, money delivered by the prospective buyer to the prospective seller under a promissory purchase contract is presumed to have the character of a sinal, even when described as an advance or initial payment of the price.

The amount of the deposit is something agreed as part of the transaction.

In practice, 10% of the purchase price is commonly used in Portuguese property transactions, but this is a market convention rather than a legally fixed percentage.

The parties can agree a different amount.

What matters is that the buyer understands how much money is being committed, when it is payable and what the CPCV says about that money if the transaction does not proceed.

The consequences of default can be significant.

Under the general rules of the Portuguese Civil Code, where the party who provided the deposit fails to perform for a reason attributable to that party, the other party may be entitled to retain it.

Where the failure is attributable to the party who received the deposit, the party who provided it may, in circumstances provided by law, be entitled to demand twice the amount paid.

The legal position depends on the contract and circumstances, and other remedies may also be relevant.

This is one of the reasons the CPCV should be reviewed by your lawyer before you sign it.

Yes.

A CPCV can be negotiated to include conditions dealing with circumstances that are important to the particular transaction.

One example is mortgage financing.

A buyer who requires bank finance may seek a contractual condition dealing with what happens if the required financing is not ultimately available.

Depending on the wording agreed between the parties, an appropriately drafted financing condition may allow the buyer to withdraw in specified circumstances without the normal consequences that might otherwise arise from failing to complete, including provision for the return of the deposit.

That protection does not arise automatically simply because the buyer intended to use a mortgage.

If financing is important to the purchase, the buyer should discuss this with their lawyer before signing the CPCV so that any protection considered necessary can be negotiated and properly reflected in the contract.

Other transaction-specific conditions may also be appropriate.

For example, a buyer may need a particular legal, documentary or technical matter to be satisfactorily resolved before being obliged to complete.

Whether a condition is appropriate, what it should cover and what happens if it is not satisfied are matters for the buyer's lawyer to advise on and draft for the particular transaction.

The CPCV should accurately identify the property being purchased.

This becomes particularly important where the transaction includes parking spaces, storage rooms, terraces or other areas associated with an apartment or house.

The physical property being shown to the buyer should also correspond with the legal and property documentation.

If alterations have been made or there is uncertainty about what legally forms part of the property, those questions should be investigated before contractual commitment rather than left until completion.

The CPCV should not be used as a substitute for legal due diligence.

Before becoming contractually committed, the buyer's lawyer should have the opportunity to review the legal position of the property and the relevant documentation.

The checks required depend on the individual transaction.

They can include ownership and registration, property documentation, relevant charges or encumbrances, condominium matters where applicable, and other issues affecting the proposed purchase.

The objective is straightforward.

You want important legal questions identified before you commit a substantial deposit and assume contractual obligations.

The CPCV will usually deal with when the final purchase is expected to complete.

Do not look only at the date.

Understand how the clause actually works.

Who is responsible for arranging the completion?

How is notice given?

Are there circumstances in which the date can be extended?

Are particular documents, approvals or other events required before completion?

What happens if the agreed timetable cannot be met?

The wording can be particularly important with a property still under construction or where completion depends upon matters that have not yet occurred.

A date in a contract should not be interpreted in isolation from the rest of the agreement.

Buyers using mortgage finance should discuss the financing position with both their mortgage professional and lawyer before entering into the CPCV.

An accepted offer, mortgage simulation or preliminary indication from a lender should not automatically be treated as an unconditional commitment to lend for the particular property and transaction.

Even where a buyer expects to receive finance, circumstances can arise in which the lender does not ultimately provide the mortgage on the anticipated terms.

If the buyer wants the ability to withdraw under specified financing circumstances and recover the deposit, that protection needs to be considered before the CPCV is signed and appropriately addressed in the contract.

The precise wording matters.

A financing condition might, for example, depend on particular requirements, evidence, deadlines or circumstances.

Those details should be advised upon and drafted by the buyer's lawyer.

The important point for an international buyer is simple:

Do not assume that needing a mortgage automatically gives you the right to withdraw and recover your deposit if financing subsequently fails.

If you require that protection, raise it before signing.

Legal due diligence and a technical inspection are different things.

A lawyer examines the legal aspects of the purchase.

A suitable technical professional can consider the physical condition of the property.

For an older property, heavily renovated property or one where there are concerns about damp, cracking, plumbing, electrical systems, structure or other physical issues, a buyer may decide that an independent inspection is appropriate.

Where such an inspection is important to the buyer's decision, consider its timing before becoming contractually committed under the CPCV.

If a buyer wants the purchase to depend upon the satisfactory resolution of a particular technical issue, that should be discussed with the buyer's lawyer before signing.

Fixtures, fittings, furniture and equipment can become a source of disagreement if buyer and seller have different assumptions.

Where particular items form part of the agreed purchase, it can be sensible for the transaction documentation to make that position clear.

Do not rely on an assumption that something seen during a viewing will necessarily remain after completion.

Your lawyer can advise on how agreed inclusions should be documented in the particular transaction.

This is an area where buyers should be cautious about simple internet explanations.

Portuguese law contains rules governing the sinal and contractual non-performance, but the consequences of a failed transaction depend on the contract, the circumstances and responsibility for the failure.

The often-repeated summary that "the buyer loses the deposit or the seller pays double" describes an important aspect of the general sinal regime, but it should not be treated as a complete analysis of every failed CPCV.

The CPCV may also contain agreed conditions that affect the parties' obligations in particular circumstances.

Portuguese law can provide other remedies in appropriate circumstances, including the possibility of specific performance.

If a transaction is at risk of failing, obtain advice from your lawyer based on the actual CPCV rather than relying on a generic rule.

Portuguese law provides, in certain circumstances, for a remedy known as execução específica, or specific performance.

In broad terms, this can allow a party to seek a court judgment producing the effect of the contractual declaration that the defaulting party was obliged to make.

Whether this remedy is available and appropriate depends on the legal and contractual circumstances.

It is not something a buyer should assume will automatically be available whenever a CPCV dispute occurs.

This is a legal matter for the buyer's lawyer.

A CPCV for a property that is being built deserves particular attention.

The buyer may be committing to a property that cannot yet be inspected in its completed form, and the timetable may depend on construction, licensing and other matters that have not yet occurred.

The contract may therefore need to address matters beyond those arising in a straightforward purchase of an existing completed property.

These can include the description and specification of the property, payment stages, expected completion, circumstances affecting the timetable and what happens if contractual obligations are not met.

The appropriate provisions should be reviewed by the buyer's lawyer for the individual development and transaction.

A competitive property market can create pressure to move quickly.

Speed and lack of preparation are not the same thing.

A well-organised buyer can have their NIF, financing, lawyer and other practical arrangements in place early so that the legal review can begin quickly when the right property is found.

That is very different from signing a contract without understanding it because there is concern that another buyer may appear.

Once you are at CPCV stage, the objective is not simply to secure the property.

It is to secure it on terms you understand and are prepared to accept.

Before signing, make sure you understand:

• The exact property being purchased.
• The agreed purchase price.
• The amount of the deposit.
• When the deposit and any other payments are due.
• The expected completion arrangements and deadline.
• What each party must do before completion.
• Whether you require any conditions before being obliged to complete.
• If you are using a mortgage, whether the CPCV provides the financing protection you and your lawyer consider appropriate.
• What happens to the deposit if an agreed condition is not satisfied.
• Whether appropriate legal due diligence has been completed.
• Whether a technical inspection is appropriate.
• How fixtures, fittings or furniture are being treated.
• Any property-specific matters that need to be resolved.
• What the contract says about non-performance.
• Who is responsible for arranging and notifying completion.
• Any provisions particularly relevant to a property under construction.

Remember that 10% is commonly encountered in practice, but it is not a legally fixed percentage and a different amount can be agreed.

Most importantly, make sure your lawyer has reviewed the actual CPCV and explained anything you do not understand.

The CPCV normally sits between the initial negotiation or accepted offer and final completion of the purchase.

It is therefore a key transition point.

Before it, the buyer is investigating and negotiating.

After signing, the parties have entered into contractual commitments governed by the terms of the CPCV and applicable Portuguese law.

Understanding that distinction is one of the most important parts of navigating a Portuguese property purchase.

I work personally with international buyers throughout the property search and purchase process.

When a purchase reaches CPCV stage, I can help coordinate the practical side of the transaction, keep communication moving between the relevant parties and make sure the buyer is connected with the appropriate professionals.

I do not provide legal advice or draft the buyer's CPCV.

The legal review, drafting of appropriate contractual conditions and advice on their effect should come from an appropriately qualified lawyer acting for the buyer.

You deal directly with me throughout, supported by the wider resources and expertise of The Agency Portugal.