Simplex - More Than Never a Real Estate Lawyer Is Vital

Teresa Arriaga e Cunha | Lawyer

The DL 10/2024 – Portugal’s Simplex Urbanístico - was officially released on 8th January, with the goal of streamlining licensing procedures in urban planning, land use management, and industrial sectors. This decree-law is designed to simplify the current licensing processes by eliminating unnecessary licenses, authorisations, actions, and procedures, following a "zero" licensing approach.

The legislation will be enforced on 4th March 2024, with certain amendments already active since the 1st of January 2024 and others scheduled for implementation later. As part of this, one of the regulatory changes effective from 1st January 2024 involves streamlining the procedures concerning property transactions. This simplification eliminates the need to present or verify the housing data sheet and the authorization for use at the time of closing the deal, as their relevance or necessity is no longer required to be confirmed.

It is important to highlight that the housing data sheet is a crucial document for buildings constructed or modified post 30th March 2004. This sheet outlines the technical and functional aspects of urban residential buildings upon completion of construction, reconstruction, extension, or alteration. Its purpose is to enhance consumer rights, providing information and safeguarding economic interests in the purchase of urban residential properties, while also fostering market transparency.

Similarly, the authorisation for use is intended to confirm the successful completion of the urban development project and adherence to regulations, as follows:

• The finished work aligns with the approved architectural project, the exterior arrangements and the requirements of the respective licence or prior notice;
• The intended use complies with the legal and regulatory standards that establish the permissible uses and utilisations.

In this context, the absence of a requirement for buyers to provide these documents during the closing process can potentially lead them into a situation that may not comply with the law.

When a building is not properly licenced, meaning it was constructed without approval from the Town Hall, it is deemed illegal. In the future, whether through official action or a third-party complaint, the Town Hall may inspect the property. If they find any unauthorised constructions, the owner may receive a notification to legalise those areas, potentially facing fines. To rectify this, a legalisation process must be initiated at the Town Hall with the guidance of an Architect.

Moreover, if legalisation is unattainable (e.g. due to limitations in municipal licencing requirements outlined in the Local Municipal Plan that prohibit further construction), the property owner might need to dismantle the unauthorised structure.

If the owner fails to address the irregular areas within a specified timeframe, the Town Hall has the authority to assume possession of the property to carry out the required works for their rectification. The owners will bear the incurred costs. 

We anticipate that banks will continue to request these documents, based on the scrutiny of the licencing entity, to facilitate a favourable response to the financing. In the absence of these documents, a thorough evaluation of the project will be necessary, incurring additional expenses for the buyer.

As urban planning simplification measures are implemented, they notably favour major investors and developers in real estate while inadvertently disadvantaging medium and small-scale buyers. These are the buyers genuinely interested in properties that may lack proper legalisation for various reasons.

In summary, real estate transactions can be intricate due to the involvement of legal documents and regulations. Additionally, sellers, landlords, or real estate agents may conceal crucial details from buyers regarding violations and defects that could impact the property's value.

LVP Advogados has the expertise to navigate these complexities, guaranteeing compliance with all legal requirements and safeguarding your interests. This ensures a seamless and successful real estate transaction, shielding you from potential disputes or legal complications in the future.  Should you wish to further discuss this matter, please feel free to reach out to us.