The crisis in access to housing has driven the purchase of houses still in the planning stage. Families and young people seek, in this way, to guarantee a roof over their heads and at more affordable prices. But this anticipation has serious risks for buyers, who do not have legal means of protection. Proof of this is the real estate scam that recently took place in Palmela. The fraud involved a promoter, more than a hundred families and amounts in excess of 26 million euros. The scheme was based on the sale of houses, with doubling and tripling of purchase and sale promissory contracts and deposits of around 100 thousand euros.
“The idea has been sold that an acquisition process is simple and that no help is needed”, says Jorge Batista da Silva, president of the Order of Notaries. However, Buying an off-plan property “is a very risky business”. As a warning, it brings together several risk factors: it is not built and it is not known whether it will comply with urban planning standards, which, in extreme situations, could halt the work. It is also relevant to know whether there are mortgages, liens and arrests on the seller.
In this context, Jorge Batista da Silva recommends that buyers “exercise a minimum of care, regardless of the seriousness of all parties”. After all, “they are investing much or all of their savings”. One of the protection measures is the provisional registration of the purchase and sale promissory contractwhich guarantees priority to the holder, if anyone else appears to claim the property. As he explains, registration serves to protect property rights. “Whoever registers first will have their rights protected”, he emphasizes. With this registration, buyers are protected from sellers who may be signing several contracts, that is, who are committing fraud.
Jorge Batista da Silva also warns that the overheating of the market has generated situations in which, sometimes, it pays for the seller to renounce the initial contract, pay the agreed compensation, and sell to third parties. The president advises potential buyers to consult a notary to verify the contract and have the signatures notarized. “Before signing, the person must take the contract to the land notary to see, at least, the minimum details of the operation”, he emphasizes. In the registry offices, general information is free, he emphasizes. Lawyers, conservators and solicitors are also able to help in these processes.
In the opinion of Jorge Batista da Silva, the buyer must also register the specifications for the work, together with the promissory contract. It is a safeguard in case of non-compliance with the contract. As he explains, the property can be delivered with defects, painted with plastic paint when washable paint was provided, with floating floors instead of radiant. The contract must also define the deadline for completing the work. At the same time, compensation for non-compliance with the work book must be made explicit in the document, as well as the date of completion of the property. “People need to listen to a third party to avoid making these mistakes”, he highlights. These services have costs, but they are “a type of insurance for any type of dispute that may occur in the future”. And “deterrents” of possible problems.
Even in a property ready to live in, Jorge Batista da Silva recommends consulting a notary. As he explains, in real time, it is possible to access the land registration certificate and find out the building’s registration: who is the owner; possible burdens on the property; asset description; license, or not, to use… The president emphasizes that notary offices are a network close to local populations and tend to be well informed. “There may not be fire, but if there is smoke, the notaries of the land know it”it says.
In Portugal, there are 483 notary offices and 546 professionals qualified to perform the function, which support around 2.5 million people annually. According to Jorge Batista Silva, there are still around 20 notary offices left for the country to be fully covered by this service. “In the interior and islands they closed during the crisis”, he explains. And “there are problems in the region and in the Azores”. For the Azorean archipelago, a competition is planned to be launched to open new registry offices.
According to Jorge Batista da Silva, To support the operation of this service in places with little economic dynamism and low population density, the Order of Notaries promoted the creation of a fund, which is fed by all these public officials. “They contribute 1% of gross revenue to the fund and it is this fund that ensures the existence of a notary office in the country’s small municipalities”reveals. For the Azores, a competition is planned to be launched to open new registry offices. The Order of Notaries continues to invest in the modernization of services, and is currently making an investment of around 400 thousand euros to reinforce the digitalization of notarial acts.
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