Defence · Long-form · Lawyer-reviewed
CPCV clause-by-clause - the 20 clauses that decide whether you lose your sinal
The Contrato de Promessa de Compra e Venda (CPCV) is the Portuguese promissory contract signed early in the buying process with a 10–20% deposit. It binds both sides before the escritura. Most Madeira deposit losses happen here - usually because a financing contingency was missing, a licensing contingency was missing, or a condominium AL-veto was not disclosed. Here is the 20-clause defence layer, in plain English.
Clause 1
Parties (outorgantes)
Full legal names, NIFs, marital status and regime. Any missing spousal signature under community-of-acquired-property regime can void the transaction.
Red flag: Verify spousal signature requirement with your lawyer - Portuguese community property rules are not optional.
Clause 2
Object (objecto)
Full description of the property: article numbers, freguesia, concelho, Registo Predial reference, Caderneta Predial reference, areas (gross, private, dependent).
Red flag: Mismatches between registry and Caderneta are common in older Madeira stock - reconcile before signing.
Clause 3
Price (preço)
Declared price. This becomes the tax base for IMT and stamp duty. Under-declaration is tax fraud.
Red flag: Any verbal suggestion of two prices (declared + side cash) = walk immediately.
Clause 4
Sinal (deposit)
Typical 10–20%. Legally distinct from a reservation fee. Paid to a safe IBAN belonging to the seller or their lawyer's client account.
Red flag: Reservation fees paid before CPCV must be explicitly recorded as part of (or separate from) the sinal in this clause.
Clause 5
Sinal consequences
Buyer walks → sinal forfeited. Seller walks → double sinal returned. Some CPCVs try to cap this asymmetrically - resist.
Red flag: Asymmetric penal clauses are void under Portuguese law but still commonly attempted.
Clause 6
Financing contingency
If you need a mortgage, the CPCV must condition completion on financing approval. Without this clause, a bank decline means you lose the sinal.
Red flag: Non-negotiable. Do not sign a CPCV without a financing-contingency clause if you need a mortgage.
Clause 7
Survey / inspection contingency
Rights to a technical survey and to walk (or renegotiate) if major issues are found. Not standard in Portugal. Add it.
Red flag: Without this clause, a €30k foundation issue is your problem to pay for, with sinal committed.
Clause 8
Licensing contingency
Completion conditioned on the seller producing a valid licença de utilização. Post-DL 10/2024, buyer verification is mandatory.
Red flag: Missing or wrong-use licence can block the escritura entirely.
Clause 9
Debt / lien-free warranty
Seller warrants no registered liens, no judicial seizures, no unpaid IMT/AIMI/condominium. Buyer's lawyer verifies against Certidão Permanente.
Red flag: Portuguese subrogation: unpaid condominium dues follow the property. This warranty matters.
Clause 10
Condominium status
Apartment-specific. Disclosure of any AL-veto clauses in the condominium regulation, pending works, reserve fund level, AGM minutes for last 3 years.
Red flag: Individual condominiums can ban AL even where the municipality allows - critical for AL investors.
Clause 11
Utilities transfer
Final meter readings at escritura; utility contracts transferable on that date.
Clause 12
Completion date
Typically 60–90 days. Too short = insufficient due diligence. Too long = price change risk.
Clause 13
Possession date
Usually escritura. Earlier occupation requires a separate comodato clause with its own tax implications.
Clause 14
Insurance obligation
Buyer must have multirrisco insurance active at escritura. AL-liability rider if planned.
Clause 15
Fiscal representation (non-residents)
Non-residents need a Portuguese fiscal representative if owning Portuguese assets.
Clause 16
Taxes and duties
Assignment of who pays what: IMT is buyer, stamp duty is buyer, IMI in year-of-sale prorated.
Clause 17
Pre-existing obligations
Any existing tenancy, AL agreement, shared-ownership deals, leases over levada rights.
Clause 18
Penalties for delay
Who pays what if completion slips. Must be symmetric.
Clause 19
Jurisdiction and governing law
Portuguese law, Madeira regional courts. Non-Portuguese jurisdiction clauses are red flags.
Red flag: Never accept non-Portuguese jurisdiction or arbitration seated outside Portugal on a Madeira property CPCV.
Clause 20
Notary registration, dates, signatures
All signatures witnessed. Date of CPCV starts the completion clock. Original goes to the notary at escritura.