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The real estate market is booming in Portugal, especially in the area of residential properties. Even during the Corona period the buying and selling of houses did not stop but continued to be in full swing.
This will also happen in 2022. As of March 1, 2022, there is a new law to take into account, which concerns the acts that habitually entitle real estate transactions and which binds those who prepare them, as is the case of registrars or notaries, or authentic, lawyers or solicitors. Everyone who works in the field, like lawyers and notaries, must work according to it. The Bank of Portugal (bdp) website will have information available on public activities, which includes contracts and private documents and all legal entities will be required to review and communicate on this platform.
The advantage of this law is that it will protect the real estate buyer from fraud and illegal actions by professionals.
The lawyer Ricardo Matos Fernandes explained to Idealista website the purpose of the law and the changes that follow and we bring out the main points.
The purpose of the new law (Law No. 78 \ 2021) is to prevent and combat the execution of unauthorized financial actions, which are related to products that in their true essence can relate to “real fraudulent schemes practiced by people who exploit moments of personal or financial fragility of citizens,” published in the draft law on November 24, 2021 – “The system for preventing and combating unauthorized financial activity and consumer protection.”
Under this Act, unauthorized financial activity by definition is “attempt or performance of acts, or professional performance of an activity regulated by the legislation of the financial sector without approval or registration, or other permissible facts lawfully or out of bounds arising out of ambition or registration of such facts.”
What are the changes following the law?
Registrars, notaries, solicitors, lawyers, registrars, or chambers of commerce and industry are now obliged to refrain from performing any operation or set of operations, present or future, that they know or suspect may be associated with the attempt or the exercise of unauthorized financial activity.
Thus, as of March 1, 2022, notaries, solicitors and lawyers will have to communicate on a platform to be made available by Banco de Portugal (BdP) information on public deeds, authenticated private documents, or documents with a signature recognized by them in which they intervene with the exception of those in which they act on behalf of authorized entities, are reappointed to:
- The attempt or exercise of unauthorized financial activity, namely in loan agreements or declarations of assumption or confession of debt;
- Financial leasing contracts;
- Restitutive financial leasing contracts;
- Contracts for the purchase and sale of real estate associated with a lease to the seller or transfer of property to the original seller;
- Contracts for the purchase and sale of immovable property or movable property subject to registration that do not involve the granting of a loan by entities authorized to carry out the credit activity, whenever the buyer has already been a seller of the same property, or the lease or usufruct is foreseen of the immovable property or the usufruct of the movable property by the seller, or the option to repurchase the property is provided for by the seller;
Those entities are also required to previously consult the public register of authorized entities, available on the BdP website, and to include in the document to be concluded whether the act, contract, or document in question is or is not celebrated within the scope of the exercise of financial activity. reserved for entities authorized by the BdP, disclosing the information obtained to the grantors and recording the information obtained in the document.
On the other hand, the same professionals, when involved in the acts of assumption or confession of debt or loan contracts, have the duty to certify with the lenders that they are not registered in the aforementioned public register of authorized entities and, in that case, obtain the lender’s statement that he is not carrying out an activity reserved for entities authorized by the BdP and making it appear in the document in question.
The new law under the magnifying glass
“From January 1st – the date on which the law enters into force – in civil loan agreements exceeding 2,500 euros, the delivery of the borrowed amount will have to be carried out by means of a bank instrument – check or bank transfer – and the contract must mention the date and the banking instrument used, as well as the information necessary for its documentary or computer traceability”, warns the lawyer, who works in Real Law and Real Estate Mediation.
Failure to comply with these obligations is sanctioned disciplinary or within the scope of ethics by the competent entities or bodies, such as the IRN of the respective Orders, without prejudice to criminal sanctions or administrative offenses.
On the other hand, within the scope of its administrative offenses, the BdP can use the information contained in the aforementioned database only for the purpose of preventing, combating, and sanctioning unauthorized financial activity explains the jurist.
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