On October 1, 2026, a new legal regulation will come into force in Portugal, which at first glance appears to be a reaction to the controversial 2024 reform. The legislator has amended the regulations concerning proof of the building law status of buildings in purchase, exchange, and gift transactions.
The new regulation reads, in essence, as follows: "In legal transactions concerning the transfer of land for development, buildings already erected or still under construction, or their independent units, the land registrar, notary, lawyer, legal advisor, or other legally competent person or body must - otherwise the legal transaction is contestable expressly state in the deed:
a) the existence of the corresponding building permit, provided it is presented to him;
b) the seller's declaration that he possesses the corresponding building permit, provided it is not presented to him:
c) the seller's declaration that he does not possess a corresponding building permit.
Anyone reading this provision for the first time might think that the legislator has recognized and corrected the problem that has existed since 2024. However, closer examination reveals a different picture. The new regulation hardly solves any of the practical problems that arose from the 2024 reform. It primarily creates additional declarations in the contract, but hardly any additional legal certainty.
1. The legal situation until the end of 2023
Until the end of 2023, a comparatively strict and, from the perspective of buyer protection, sensible legal situation applied. Anyone wishing to sell a building generally had to prove that the building had a valid occupancy permit or, exceptionally, did not require one due to its age. The occupancy permit documented, at least formally, that the building had been constructed in accordance with the approved building project and could be used. The certifying notary or lawyer was generally not permitted to notarize a real estate transaction if the existence of an occupancy permit was not proven. Proof was regularly provided by submitting the occupancy certificate (Alvará de Autorização de Utilização) or, in the case of older buildings, by a corresponding certificate stating that the building had been constructed before 1951. A violation rendered the legal transaction void.
The consequence was clear. No notarization without proof of occupancy permit. No transfer of ownership without notarization. This system. was strict and bureaucratic. However, it had one crucial advantage: it forced the parties involved to address the building's legal status before the purchase. Above all, it largely prevented sellers or real estate agents from downplaying the significance of the bulding's legal status or from not even mentioning it to the buyer. Since no effective notarization was possible without the corresponding proof, legal compliance inevitably became a subject of negotiations and legal review.
2. The 2024 Reform
The situation changed fundamentally with the so-called Simplex Urbanístico. Firstly, the classic occupancy permit was effectively abolished. Secondly, the obligation to provide proof of an occupancy permit to the notary or lawyer in real estate transactions was eliminated. Since January 1, 2024, it is generally no longer necessary to prove the existence of an occupancy permit or a comparable building permit when transferring a building. Since March 4, 2024, for newly completed buildings, a simple occupancy permit is sufficient.
Basically, the submission of certain declarations by an architect or engineer to the municipality. The legislature wanted to reduce bureaucracy. In reality, however, control mechanisms were primarily abolished. The real revolution of 2024 was not that buildings could suddenly be used without building code legality. Of course, they still cannot. The real revolution was that proof of this legality was no longer a prerequisite for carrying out a real estate transaction. This is precisely where the problem lies to this day.
Many prospective buyers and owners believe that a building permit automatically means that a building is completely legal. This was never true. Numerous buildings have a building permit but exhibit later, never-approved alterations, such as swimming pools, extensions, enclosed patios, outbuildings, converted garages, or changes of use. The building permit generally referred to the condition of the building at the time it was issued. Therefore, even before 2024, a careful buyer had to check more than just the existence of a building permit. Since 2024, this check has become even more important because even the previous minimum check has been eliminated.
3. What will change on October 1st 2026?
The answer is sobering: practically nothing. The seller will still not have to present a building permit or prove that the building was legally constructed or that subsequent alterations were approved. The new regulation merely requires that the deed state whether a building permit has been presented, whether the seller declares to possess such a permit, or whether they declare not to possess such a permit.
The central weakness is obvious: the regulation requires not proof, but merely a declaration. Proof creates legal certainty; a declaration merely creates an assertion. Even if the seller declares to possess a building permit, it remains unclear whether it actually exists, whether it covers the entire building, and whether all structural alterations have been approved.
Even more problematic is the fact that the sale of a building remains possible even if the seller explicitly declares that they do not possess the corresponding title. This does not prevent the transaction. The information is merely documented. The new regulation thus continues to shift the risk to the buyer. The buyer must still verify for themselves whether the building complies with building regulations.
The proposed contestability is also unconvincing. It is not based on the building's lack of legality, but merely on the absence of the legally required declaration in the deed. Thus, it is not the potential illegality of the building that is penalized, but only a formal deficiency in documentation.
Furthermore, the regulation fails to answer key practical questions, such as how to deal with partially illegal buildings, later additions, or incomplete building titles.
A possible habituation effect appears particularly problematic. Sellers, real estate agents, and consultants could argue in the future that a declaration is sufficient and proof is no longer required. This creates the risk that uncertainties under building law will increasingly be accepted as a normal part of real estate transactions.
4. What the legislator should have done
If the legislator had truly wanted to solve the problems that have arisen since 2024, they should at least have made the submission of the relevant building law documents mandatory again. This would have included, in particular, the submission of the building title and the approved building plans, the disclosure of known building law violations, and information about ongoing legalization procedures. None of this was implemented.
5. Conclusion
The regulation, which comes into force on October 1, 2026, is portrayed by some as a correction to the 2024 reform. In reality, however, it corrects very little. Until the end of 2023, the seller generally had to provide proof of the building permit. Since 2024, they have had to provide practically no proof at all. After October 1, they essentially only have to declare whether or not they possess a building permit.
The new regulation does not create genuine legal certainty, genuine control, or genuine transparency regarding the building permit status of a building. It merely documents whether someone claims to possess a building permit or not.
The legislature had the chance to correct the mistake of 2024. This opportunity was missed. Therefore, for buyers, the following applies now more than ever: Do not rely on the new legal obligation to provide information. Insist on seeing the building permit documents and, together with your lawyer and, if necessary, an architect, check whether the building was actually constructed as permitted. Do not be misled by sellers and especially real estate agents.
Dr. Alexander Rathenau
Dr. Rathenau & Kollegen – Law Firm
anwalt-portugal.de
ESA 09/26
