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Portugal
PROPERTY LAW
Types of ownership
Freehold
Ownership
• Portuguese Civil Code defines ownership as the right to use,
receive the benefits of, and dispose of a property, subject only
to the limits and restrictions set forth in mandatory laws.
• In order to be effective vis-à-vis third parties, any title,
transfer or in rem rights on the ownership shall be registered
with the local Land Registry. In relation to the mortgage, the
registration with the local Land Registry is also a condition of
validity.
Co-ownership
• Property may be jointly held by various persons: each person
owns a share (quota) according to the percentages agreed,
and if the property title does not provide otherwise the shares
are presumed to be equal.
• The shares in the property may be freely sold or encumbered
by each co-owner without the consent of the other co-
owners. However, when a co-owner intends to sell a specific
part of the property (as opposed to the abstract share), the
consent of the other co-owners is required.
• The co-owners jointly exercise all the rights attached to the
property, and shall receive the profits and bear the costs in the
proportion of their share.
• The property may be used by any of the co-owners, insofar as
it is not employed for purposes other than the ones for which
the property is licensed, and the other co-owners are not
deprived of its use.
Horizontal property
• Property may be divided in horizontal property (propriedade
horizontal), via a division thereof into units of different shapes
and sizes, stacked horizontally or vertically, each capable of
being owned and disposed of or charged independently by a
separate owner.
• Horizontal property is created under a title drawn up before a
Portuguese notary, which inter alia describes the value, area
and purpose of each units in the property.
• The owner of each unit is also the co-owner of the common
areas, holding a share therein proportional to the size of its unit.
• The common areas are managed by an assembly of co-
owners, and the day-to-day management is entrusted to a
manager, who may be one of the co-owners or a third party.
• As a general rule and except if otherwise provided, the co-
owners shall share the costs of the common areas on a pro-
rata basis, depending on the size of their units as described in
the horizontal property title.
Leasehold
Usufruct (usufruto)
• Is a in rem right which confers to its holder the right to use
and enjoy the property owned by another person, fully but
temporarily, and without being entitled to alter its form or
substance.
• Usufruct is typically created by way of agreement (typically a
donation) or testament. The agreement must be executed in
the form of a notarial deed or private document authenticated
by a lawyer. The testament shall always be drawn up before a
notary.
• The holder of the usufruct is entitled to transfer or encumber
it, save if otherwise provided in its title or the law.
• Usufruct may be valid for up to 30 years if created in favour
of a legal person. No limits apply if it is created in favour of an
individual.
Surface right (direito de superfície)
• Is an in rem right entitling its owner to conduct construction
works or cultivations in a property (surface or below), and
to maintain title to the built premises or cultivations, on a
perpetual or temporary basis.
• This right may be originated under a contract entered into
between the owner and the holder of the surface right, as well
as via execution of a testament (the requirements as to legal
form are the sames as the ones foreseen for the usufruct).
Typically the owner creates the surface right in favour of its
holder, but it may also transfer the property to a third party
and retain the surface right.. Upon expiration of the surface
right, the land owner acquires full ownership of the built
premises or cultivated plantation. The holder of the surface
right is entitled to a compensation for the increase of value in
the property, according to the principle of unjust enrichment,
but the parties may agree otherwise.
88 Investors Guide to Europe 2015