When purchasing real estate in Portugal it is customary to sign Contract to promise purchase and sale which is known in Portuguese as contrato de promesa compra e venda or CPCV. This is a pre-sale purchase contract between the seller and the buyer and is one of the first legal steps on the way to buying or selling a property before signing the deed of sale, and serves as a guarantee until the final agreement is signed.
This document is legally and contractually binding once it is signed, just like any other contract. is legally binding to ensure the rights of the contracting parties, thus protecting the people involved in the sale until the moment they sign the actual sale of the property and the transfer of rights.
It is customary to transfer an advance upon signing the contract, known as “sinal” in Portuguese. This is an amount of money agreed between the parties that the buyer must pay the seller. This deposit is a guarantee for compliance with the sales contract and is also proof of the seriousness of the contractual intent of both parties. The amount given as a deposit may vary, but is usually between 10% and 20% of the price of the property.
In the event of a breach of the sales contract, if the seller does not fulfill the termination of the initial purchase agreement for sale, he will have to return to the buyer double the value of the deposit he made. On the other hand, if the breach of contract is on the part of the buyer, the seller can keep the deposit.
To avoid losing money, make sure in advance that the buyer can actually get approved for a mortgage. Usually, if both parties agree, a clause can be added that cancels the contract if the mortgage is not approved by the bank. Something that allows the deposit that the buyer paid to the seller to be returned.

Casa Portugal’s legal team consists of Portuguese lawyers who prepare the draft contract in two languages in Portuguese and English for the convenience of our clients.