All Change!

The property doctor

It seems that all legislators do here in Portugal is change systems on a daily basis. The avalanche of changes brought on by this Governments much publicized aim of de-bureaucratization along with other “simplification” measures has created jobs for life for legal draftsmen and headaches for the professionals, especially lawyers, faced with digesting and understanding their effect.

Probably the most dramatic, and one which property buyers and sellers will be faced with in future, is the introduction of the “Simplex” system of house purchase and sale which effectively does away with the centuries old Notarial system and creates a quasi Anglo Saxon system of transfer and registration of property. Whether the legal profession here will adapt to this or prefer to stay with the use of Notaries (still an option), remains to be seen. Certainly it would seem that the new system could lend itself to abuse and fraud by unscrupulous individuals who do tend to increase in difficult economic times.

Basically and without going into fine detail, the new system allows a property transfer to take place with authentication of the appropriate transfer document by a lawyer (or even some other entities) who is then obliged to submit the registration of that transfer to the Land Registry within a certain period.

Thus the Notarial system which provided for a double check on the legality of the operation is changed to one single check being made by the Land Registry which will be the entity to verify if the documents are in order. Indeed with the new computer system now in place, changes of title can be submitted at ANY Land Registry and the national database updated accordingly. In practical terms this means that you could pay the IMT tax to the Finance Department, then pay the price to the vendor and you would only know when the registration was later requested whether the act was able to be registered or not! By the time you try to recover your money, the vendor, or “pretend” vendor, may be long gone.

With this method, the Notary is by passed totally and with it the independent controls that, albeit rather archaic institution, contains. It remains to be seen whether the idea of “bolting” a semi Anglo Saxon transfer and registration system to the cultural and historical habits prevalent in Portugal will work without problem.

This is an occasional column written for Carvoeiro.com subscribers with the intention of highlighting matters involving Portuguese property acquisition and ownership. It will never be intended to deal exhaustively with any particular topic but rather give food for thought, and subsequent enquiry if applicable, to the appropriate professionally qualified adviser.

The column is written by The Property Doctor. For details of what The Property Doctor may be able to do for you or for further assistance contact: enquiries@thepropertydoctor.com.pt