Selling and exiting a development in Portugal

The documents a buyer needs at completion are produced during the build. Developers who treat exit as a marketing exercise starting at practical completion consistently discover the same problems late: an as-built that does not match the approved project, a missing certificate for an installation, a registry entry that was never updated, a charge that has not been arranged for discharge.

WHAT TO ASSEMBLE IN PARALLEL WITH THE WORKS

• the horizontal property division project and its supporting documentation
• the utilisation permit file and the certificates that support it
• energy certification for each unit
• the technical file, as-builts, warranties and maintenance information
• the registry position for the building and, once divided, for each fraction
• the discharge mechanism for the development mortgage, fraction by fraction
• condominium constitution documents, budget and management arrangements.

Selling a multi-unit building unit by unit requires the building to be constituted in horizontal property, with each autonomous fraction defined, assigned its permillage share, and registered. The division document also defines common parts, use restrictions and the basis for condominium charges.

This is a technical and legal exercise, not an administrative one. Errors in the definition of fractions, in parking and storage allocation, or in the treatment of common parts, are discovered by buyers' lawyers and are slow to correct once units are contracted.

• Establish the target buyer profile before setting the specification, not after.
• Price from evidenced comparables and observed absorption, not from the cost plan plus a margin.
• Phase releases so that early sales establish evidence and later releases capture improvement, rather than releasing everything at once.
• Decide the mediation strategy: in-house, exclusive agency or multi-agency, each with different cost and control.
• Verify that any agency used is properly licensed and that commission terms, exclusivity and duration are documented.
• Model absorption honestly: unsold stock carries finance, IMI, condominium charges and management cost.

1. **Reservation.** Informal, usually a small payment, limited legal effect.

2. **CPCV — promissory contract.** The substantive commitment. Fixes price, unit, specification, deposit, completion window and the consequences of default. Deposits are meaningful sums and default consequences are significant for both parties.

3. **Conditions and milestones.** Staged payments, if any, tied to defined progress.

4. **Deed (escritura).** Executed before a notary or equivalent, with taxes settled beforehand, mortgages discharged or partially released, and the utilisation permit position resolved.

5. **Registration.** The transfer registered in the buyer's name; the buyer's lender registers its own charge.

Drafting discipline in the CPCV is what protects the developer against a completion date that the licensing calendar cannot support. Where the permit timetable is uncertain, the contract should say so and provide a mechanism, rather than promise a fixed date and rely on goodwill.

Expect the buyer's side to verify:

• registry entries for the fraction, with the seller's title and all charges
• the construction licence and the utilisation permit
• conformity between the built unit and the approved project
• the horizontal property title, permillage and common-part allocation
• energy certification and the technical file
• condominium constitution, budget and any arrears
• the developer's corporate standing and the discharge arrangements for the development mortgage.

Where the buyer is financing, their lender repeats much of this and adds a valuation. Any documentary gap becomes a delay at exactly the point where the developer wants cash.

New construction carries statutory warranty obligations, with different periods applying to structural elements and to other defects. Practical consequences for the developer:

• a defects process must exist after handover, with a named responsible party and response times
• the corresponding obligations should be back-to-back with the construction contract and secured by retention or bond
• the project vehicle cannot be wound up as if the obligations end at the final deed
• recurring defects across units are a reputational and commercial problem, not only a repair cost.

Unit sales are the default, not the only route.

• **Block sale to an investor.** One transaction, faster, lower sales cost, price set by the buyer's yield requirement.
• **Share sale of the project vehicle.** Transfers the company rather than the property; different tax profile, deeper diligence, longer warranties.
• **Forward sale or forward funding.** Committed at an earlier stage, de-risking the exit in exchange for a share of the development margin.
• **Refinance and hold.** Replace development debt with investment debt and retain the asset for income, appropriate where the rental case is strong.
• **Build to rent or operational hold.** Converts the exit into an asset-management proposition with a different valuation basis and different management requirements.
• **Phased hybrid.** Sell part, retain part, common on mixed-use schemes.

Test them on net present value after finance, sales costs and tax — and against the funding covenants, since a lender's repayment schedule may restrict the choice.

After the last deed:

• discharge remaining charges and confirm the registry is clean
• transfer the condominium to the owners with accounts and documentation in order
• honour the defects process for the statutory period
• complete tax filings and reconcile the vehicle's accounts
• keep the corporate and beneficial-ownership filings current until the entity is properly closed
• archive the full project record — it is what supports any later claim, and its absence is what makes claims expensive.

A development is finished when the documentation is finished. Until then, the profit is provisional.