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

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

When choosing a property to live in, if you don't have an approved housing loan yet, it is important to secure the property in some way. For these cases, there is a CPCV - Purchase and Sale Promise Agreement. Find out how it works in this article.

10 Aug 20234 min

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Purchase and Sale Promise Contract: What is it?

The Contract-Promise Purchase and Sale is a contract with legal provision provided for in Portuguese law, carried out in the context of the acquisition of a property or land for construction, to guarantee the rights of both the seller and the buyer. For more information, visit: What is it and what is this contract for?

This is a commitment taken by both parties, stating that the business remains valid until the purchase is completed on the day of the deed. In case of contract breach, legal consequences are at stake.

Do you 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 with 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 deposit amount.

This means that, considering that the property will be acquired for 200 thousand euros, you may have to give an entrance 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 fee may vary, as it serves only to secure the deal, so it is always agreed upon by both parties.

When 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 the case of land under construction, before the works are completed, 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.

That is to say, imagining that you will visit a property in which you are interested in buying, but still do not have the total value to buy upfront and are awaiting approval for a mortgage loan. By proceeding with a CPCV, and giving only a small part of the value, you ensure that the property is “reserved” for you, preventing the current owner from showing and selling the property to another potential buyer. At the same time, the seller is assured that they have a buyer for their property.

What is a CPCV for?

The objective 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.

That is, its purpose is to force both parties to fulfill the commitment to sell/buy until the definitive date of the conclusion of the deal, 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 wants to withdraw from the deal, the seller does not have to return the signal value;
  • The seller cannot sell the property to another client until the end of the contract period.

What should be established in an CPCV?

Certain clauses must be fulfilled in the CPCV, with information about the buyer, the seller, and the business itself. Then, check that the following parameters are in the contract:

  • Buyer and seller identification, including: full name, address, marital status, Citizen Card/ID Card name, taxpayer identification number;
  • Property characteristics (typology, location, affected parts, registration number, and building information);
  • Acquisition value and payment method;
  • Signal value;
  • Date scheduled for writing;
  • What sanctions to apply in case the deed misses the deadline; https://example.com.
  • Building permit;
  • Clause of free alienation without liens or charges.

So, to carry out a CPCV it is necessary to pay attention 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 key to your house in hand and your mortgage credit contracted arrives quickly and without complications.

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