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Buying A Property in Portugal

In 2022, my dream of settling down in Lisbon took an unexpected turn when I embarked on the journey of purchasing my first property. The initial excitement of envisioning a space adorned with my favorite colors and cherished furniture quickly morphed into a rollercoaster of emotions and unforeseen challenges. A chance encounter with a pre-construction project in Campo de Ourique led me to my real estate agent, Denise. Little did I know that these connections would play a pivotal role in the highs and lows that unfolded. Despite diligent efforts, meticulous inspections, and legal counsel, my seemingly straightforward path to homeownership took a drastic turn, leaving me in a complex legal entanglement with unexpected tenants. In sharing my experience, I hope to shed light on the importance of thorough due diligence, the necessity of a reputable legal team, and the unpredictable nature of real estate transactions in Portugal. Here is my story buying a property in Portugal.

Buying a Property In Portugal: The Search

In 2022, I had spent most of the year in Lisbon on the Working Holiday Visa, and decided that I wanted to make Lisbon my home. I started to dream about owning a place where I could paint the walls my favourite colours and invest in furniture that brings me joy. I wanted to create a space where I could make memories with friends and build my life in Lisbon.

I started to look on idealista for available apartments and got in touch with a pre-construction project that looked promising in Campo de Ourique. When I went to visit the property, it was still mid-construction. When spending time on the balcony, the airplanes were very loud so I knew that it wasn’t the spot for me. However, through this property, I met my agent.

Denise worked with Lince Real Estate company and had a few years of experience working in the Lisbon market. She was very responsive to me and overall I enjoyed working with her.

I needed to apply for a mortgage, so Denise recommended Tiago at Twinkloo. Tiago was very professional and helped me understand which banks I could apply for a mortgage with. I provided the information he needed, and within a few days we had some options to review. I’ve recommended Twinkloo to a few friends and they have all had good experiences with them as a company.

Denise and I started to see properties across Lisbon. We saw one in Cais do Sodre that was a converted office building that had a converted loft feel. We saw another in Alcantara that was built and designed by an architect and a designer so it was very well thought out and had designer touches in the kitchen. The third one we saw was in between Cais do Sodre & Principe Real and was a converted Airbnb building, which had an impressive shared co-work area and a small pool in the back. I knew that I wanted to be in the Cais, Santos, and Principe Real areas so after seeing the three apartments, I landed on putting an offer in on the Cais apartment.

Before I made an offer, I asked Denise to set up a second showing of the apartment. The previous owner Pedro met us at the apartment. Pedro had a confident, warm personality and spent time showing me the design details of the apartment. He told me how he spent extra time on this particular unit and how he loved how the mid-century modern feel came through. He explained how there were tenants in the apartment and they were lovely and always paid on time. The tenants had a fixed-term agreement that started April 2021 and ended April 30, 2023. When speaking with Pedro, he made me believe he had spoken to the tenants and that they would be leaving the apartment on the fixed term date.

Making an Offer

Denise recommended that I get a lawyer to help with the remainder of the process and she put me in touch with 2 options that her company used with other clients. I spoke with both of them and landed on using Afonso de Brito Palma (afonso.britopalma-61461L@adv.oa.pt).

I went and met Afonso at his office and we talked about my concerns with ensuring that the tenants would be gone by April 2023 and Alfonso made me believe that the clauses he was adding into the CPCV and the final contract would hold up in court. He made me feel protected and at that point, I had no reason to believe otherwise.

To sign the CPCV, Pedro, Afonso, and I all met at Denise’s office to sign the papers. Everyone was in good spirits and it was very exciting for me to sign for my first property. Whenever we were all together, I did bring up the fact that I wanted to ensure the tenants were leaving in April 2023, and everyone always said, “yes of course, it’s a fixed contract that has an end date so you are protected”.

During the time in-between signing the CPCV and the final deed, I finalized my mortgage with Tiago, and I inspected the property to ensure it was all in good working order. This was the third time I met with Pedro and again I asked him if he’s confirmed the tenants were leaving and he said made me believe once again that everything was in order for them to leave.

The day had arrived to sign the final deed, and there was a feeling in my gut that felt like something was off. I was told by Tiago we needed to sign during this specific week because otherwise the conditions of my mortgage could change and he wanted to get me the best rate.

Denise, Pedro, and I met at the Caixa Directa head office in Lisbon to complete the deed signing. My lawyer was off on vacation so he sent a colleague of his to represent me. We went through all of the details of the final contract and the mortgage contract and I signed all of the papers. All the official papers were in Portuguese and had an English translation on the right side. Money was transferred and the deal was done. Pedro said that he would send an email to the tenants to introduce me as their new landlady and get all the bills transferred over to me.

That afternoon, once Pedro sent the message to the tenants, everything fell apart. The tenants responded to Pedro’s email with a long email saying that they are, in fact, not finishing the contract on April 30th, 2023, and that they have no plans to move out. They cited a long list of Portuguese laws, that protected their right to stay in the apartment past the fixed dates in the contract.

I was absolutely devasted! I felt totally overwhelmed by how the transaction happened and how something that was supposed to be so exciting for me turned so negative within a few hours of handing over the money and finalizing all the contract details. I called Alfonso immediately and asked how this possibly could happen. He said that he would look into it and get back to me. I also called Pedro and asked how he communicated with the tenants about their contract and he said he would speak to his lawyer and get back to me. I felt alone, between a rock and a hard place, and I had no way of knowing how to protect my interests in this scenario.

Alfonso called me back 2 days later and told me that the tenants did have the right to stay. I asked how in the multiple times that I brought up in our meetings I wanted to be crystal clear and protected against this exact scenario, how this could have happened, he calmly just said, that the clauses he put in don’t hold up against the Portuguese laws. My heart broke again and I immediately fired him.

Pedro pretended to offer the help of his lawyer, who ultimately said the same thing as Alfonso. All I could do is wait until the tenants decide to leave on their own and use the structure in place to get them to leave by April 2024 (the earliest best-case scenario) or April 2026 (the worst-case scenario). I told Pedro how disappointed I was in this whole scenario and how I felt completely lied to. Pedro quickly changed his warm tone to one of “you had a lawyer, and they should have checked this for you”. His character really showed in this moment, and I felt completely taken advantage of.

I asked around and found a new lawyer, Rodrigo Noronha Mourão with Santiago Mediano. He heard me cry and talk through the entire scenario from start to finish. He told me he would do what he could to help me but unfortunately, because I had a lawyer, and his experience with the Portuguese court system, there wasn’t much we could do in the current moment to get the tenants out. I had two options: I could try to take Pedro to court for breach of contract or I could put the paperwork through to get the tenants out by the best-case scenario date – April 2024. I didn’t want to go to court and have all my energy be sucked into a negative place for months on end so I decided to try to take the high road, and put the paperwork through to try to get the tenants out by April 2024.

Over the next three months, I felt heartbroken and very emotional. I cried each night, blaming myself for not doing more due diligence. I was angry at my original lawyer for being so negligent. I was angry with Pedro for completely deceiving me and allowing me to trust that he had communicated and put the paperwork through to get them out on the original contract date. I ruminated on these same emotions for many months.

Time slowly helped me to manage all the thoughts and feelings I was having. I made a plan to find a new place to rent in a neighborhood that would bring me joy. My parents gave me good advice which was to think of it as an investment until I could take it over (whenever that may be). Over time and a few in-between rentals, I found an apartment in the same neighborhood and got into a nice routine at the local coffee shops and restaurants.

Fast forward 1 year, a Friday in November 2023, I was playing padel with my girlfriends. On a break, I checked my email to see an email come in from Rodrigo with the subject line “Update from Tenants”. I immediately opened it thinking he was just inquiring if I had heard anything from them. Since I never really believed they would leave, I was going to quickly respond with, “still nada”. The message instead read, “The tenants have informed me that they are leaving on Nov 21”. I was in absolute shock!

Transition Period

The tenants were very quick to leave. Within their notice period, they were leaving in 21 days until they were going to move out. I hired a company to come help me complete the inspection as I knew I would be very emotional completing the process. The inspector and I found some minor things, but overall the tenants did take care of the apartment.

They left on the day they noted to my lawyer, and on Nov 21, 2023, the apartment was officially mine! I couldn’t believe that after all that time and emotions, I am moved into my home.

How I Would Approach Buying A Property In Portugal Now:

Don’t Purchase a Property with Tenants: Just don’t do it!

Hire a Reputable Lawyer (or maybe 2): In hindsight, there was no way for me to know that my initial lawyer wasn’t capable until everything fell apart, but I would ask your network and find lawyers who specifically focus on real estate transactions. I would not hire a generalist lawyer. I would also maybe hire 2 lawyers and have each of them double-check each other’s work.

Find a Real Estate Agent: Agents are not licensed in Portugal. This is an important distinction from my experience in Canada. They can help you get appointments at properties but they are not held to the same standard as a licensed agent in Canada/US/UK.

Work with a Mortgage Broker: Twinkloo was an excellent experience for me. They helped with investigating many bank mortgage options at once and handled all of the paperwork in order to apply. They also helped me find an insurance broker who helped me compare rates for all the related insurance required when buying a property.

In 2022, my dream of making Lisbon my permanent home took an unexpected turn as I ventured into buying a property in Portugal. From envisioning the perfect space to the harsh reality of unforeseen challenges, the journey unfolded through encounters with an agent, a mortgage broker, and a fateful meeting with the previous owner. Despite thorough efforts, legal counsel, and meticulous inspections, the excitement of finalizing the deal quickly turned into a nightmare as unexpected tenants disrupted the plan. This cautionary tale reflects on the highs, lows, and hard-learned lessons of navigating the intricate landscape of real estate transactions in a foreign city.

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