NEWSLETTERS

Written But Without Deed

Following on from a recent newsletter I wrote Simply Simplex! the form of real estate transmission was completely altered when The Law-Decree 116/2008 of 4th July was published, coming into force partially on the 21st July with the remainder on the 1st January 2009.

With this new law-decree, profound alterations were made in the Portuguese legislation, in such important areas that certainly the legal structure will be tested.

The most surprising of all alterations was to make as optional the real estate transmission format, as well as any charge (mortgage for example) that in the old system was made only and exclusively by way of a public deed. Therefore, from January 2009 the real estate transmission can be done in one of three ways that can be chosen by the parties:
A)	Public deed in Private Notary; or
B)	Private document authenticated by Private Notary, lawyer, solicitor or Chambers of Commerce and Industry; or
C)	In the Land Office Registration (who will work then as a front office “balcão único”).

The parties are able to choose between one of the above mentioned forms – from the most solemn, as the public deed, to the document executed in the land office registration.

As a consequence of such radical alteration, fees charged by the land office registration and the notary, were also altered.

From the 21st July, the registration of a simple acquisition (without mortgage and made in the Notary through public deed) costs 250 Euros whilst previously it cost 125 Euros. At the same time, a revision of the notary fees schedule has come into force, establishing freedom in charging fees for almost every single act – this means that the Private Notary can charge what he/she deems fit as fees for his/her work without being restricted by a legal maximum as before.

A practicable example: Under the old system, in a purchase of 100.000 Euros without mortgage, the costs would be: 125,00 euros - transmission registration 800,00 euros – stamp duty charged re the transmission 310,00 euros – notary fees TOTAL - 1.235,00 EUROS
Under the new system: 350,00 euros – Transmission registration (with the transmission act executed in a single act at the Land Office Registration – available only from January 2009 onwards) 800,00 euros - stamp duty charged re the transmission TOTAL - 1.150,00 EUROS

From 1st January 2009 the parties can go to the Land Office Registration and make all the transmission in one single step, paying the price, the IMT, stamp duty, and register including the mortgage.

In the Land Registration law, the alterations were very deep:
A)	The registration becomes mandatory within a certain dead line and subject to penalties if not accomplished (art.8.º A CRP);
B)	The Land Office Registration loses their territorial competence and the registration can be made in any office regardless if it is of the location of the asset or not (art. 19.º CRP);
C)	The registration can be done online, and there is a mandatory deposit of the documents (41.º C, CRP – still to be ruled through a Bylaw);
D)	The principle of succession in title: though it is written in the law that still exists and is demandable, it does not seem to be in real fact through the application of the new law (see 34.º e 35.º CRP);

Many legislative areas were changed by the law – they were altered, revoked or even re written for example:
A)	Civil Process Code;
B)	Civil Code;
C)	Commercial code;
D)	Commercial Registration Code;
E)	Notary Code;
F)	Land Office Registration Code.

The private document that operates the transmission of the asset will be filed in the Land Office Registration. The agent that authenticates the document (lawyer, solicitor, notary, Chamber of Commerce and Industry) will absorb as well some obligations as a consequence of their intervention in the act, such as:
A)	Electronic deposit of the private document and of all the documents that instruct with the land office registration;
B)	Keep a file of all originals of the authenticated documents;
C)	The authentication can only be made after proof of payment of the IMT tax and stamp duty;
D)	In the term of authentication must be mentioned the amount paid in respect of each tax and mentioned as well any exemption that was applicable in that case;
E)	To register the act in which they have intervened within 10 days under the penalty of payment of the registration fees in double.

Obligation to register:

Plenty of acts have become registered mandatorily, such obligation falling upon several entities. This is particularly useful as such different acts will have to be registered:
I)	Court Process;
II)	Interim Injunction (“Providências cautelares”);
III)	Court sentences;
IV)	Alteration of the street name or of the door number;
V)	Acquisition with/without mortgage;
VI)	Alteration of the matrix number (communication of the correspondence between different matrix numbers).

Such obligation falls upon several institutions rather than the individual as in the old system. Therefore, Councils, Courts, Finance Department, Banks and others are obligated to register those acts. The necessary consequence will be the updating of information in the land office registration for the benefit of the juridical trade.