Understanding Promissory Contracts (CPCV) in Portugal

What is a Promissory Purchase Agreement?

A Promissory Contract of Purchase and Sale (CPCV) is a legally binding preliminary agreement that precedes the final property deed. This document:

Formalizes the buyer’s and seller’s commitment to complete the transaction
Establishes key terms before the notarial deed
Provides legal protection for both parties

Key Legal Requirements

1. Mandatory Written Form

Required under Article 410 of the Portuguese Civil Code
Must include notarized signatures
Requires certification of:
- Habitation license (Licença de Utilização)
- Construction license (for new builds)

2. Two Final Contract Types

Deed of Sale: Final property transfer document
Loan with Mortgage Deed: Required when using bank financing

Essential Elements of a CPCV

Every promissory contract should clearly specify:

✔ Property Details

Complete description (location, boundaries, construction status)
License verification (habitation/construction)

✔ Financial Terms

Total purchase price
Deposit amount (typically 10-30%)
Payment schedule (including balance due at signing)

✔ Timeline

Deadline for final deed execution (typically 30-90 days)
Property delivery date

✔ Legal Protections

Penalties for breach of contract
Conditions for deposit forfeiture/return
Right to specific performance (Article 830 Civil Code)

Critical Considerations

Tax Implications

IMT (Property Transfer Tax) becomes due after CPCV signing
Stamp duty (0.8%) applies to the contract value

Deposit Rules

Buyer deposits are typically non-refundable if they withdraw
Seller must return double the deposit if they withdraw

Financing Contingencies

Recommended clause for mortgage approval
Typically allows buyer exit if financing fails

Why Professional Assistance is Crucial

At ProDirecta, we ensure your CPCV:
✅ Complies with all legal requirements
✅ Protects your financial interests
✅ Includes proper contingencies
✅ Facilitates smooth transition to final deed

Need help drafting or reviewing your CPCV? [Contact our legal team today]