CPCV: What is it and what is this contract for?

Purchase and Sale Promise Contract: What is it?

The Purchase and Sale Promise Contract is a legal contract provided by Portuguese law, carried out within the scope of acquiring a property or land for construction, to ensure the rights of both the seller and the buyer. This contract serves this purpose.

This is a commitment made by both parties, stating that the business remains valid until the purchase is finalized on the day of the deed. Failure to comply with the contract may result in legal consequences.

Do I need to give a signal in the CPCV?

Yes, typically, it is at this point that a portion of the property value is paid by the buyer to the seller using their own capital. The purpose is to ensure that, if the buyer backs out of the deal, the seller is not harmed and can keep the down payment.

This means that if the property is going to be acquired for 200 thousand euros, you may have to give an entry fee corresponding to 10%, for example. This means that you will have to pay 20 thousand euros when signing the CPCV. The amount of the entry fee may vary, as it only serves to guarantee the deal, so it is always agreed upon by both parties.

At what time is a CPCV made?

The CPCV is always carried out before the deed of a property or land, and can be signed in various situations:

• In case it is a plot under construction, before the works are finished, to ensure the borrower's ownership;
• When the buyer is still waiting for housing credit approval.
• If the property does not yet have an occupancy license available.

In other words, imagining that you are going to visit a property in which you are interested in buying, but you do not have the total value to buy it upfront and are waiting for the approval of a housing loan. By proceeding with a CPCV and giving only a small part of the value, you ensure that the property is "reserved" for you, so the current owner cannot show and sell the property to another potential buyer. At the same time, the seller is assured that there is a buyer for their property.

What is a CPCV for?

The purpose of a CPCV is to safeguard the rights and duties of both parties: the buyer and the seller of the property or land in question.

In other words, its purpose is to force both parties to fulfill the commitment to sell/buy by the definitive date of the conclusion of the transaction, in the public deed of the property.

Although not mandatory, this contract has legal consequences if not complied with. Therefore, a CPCV can ensure, through mutual agreement, that:

• If the buyer wishes to give up the deal, the seller does not have to return the amount of the deposit.
• The seller cannot sell the property to another client until the end of the contract period.

What should be established in a CPCV?

Certain clauses must be fulfilled in CPCV, with information regarding the buyer, the seller, and the business itself. So, make sure that the following parameters are in the contract:

• Buyer and seller identification, including: full name, address, marital status, name on Citizen Card/Identity Card, taxpayer number;
• Property features (typology, location, affected parts, registration number and building information);
• Acquisition value and payment method;
• Signal value
• Date scheduled for the writing;
• What sanctions to apply if the deed fails to meet the deadline;
• Building permit;
• Clause of free alienation without charges or encumbrances.

So, to carry out a CPCV, it is necessary to be attentive to numerous factors, so that nothing fails in the process. That is why many Portuguese people turn to real estate consultants when buying their home.

The agents of Casa no Minuto, as well as the credit intermediaries Poupança no Minuto, can help you throughout the process, so that the day you have the keys to your house and your mortgage loan contracted arrives quickly and smoothly.