Buying property is hard to do… (or the trouble with the deeds)

… and why I’m still “urban” for a little while longer.

Portugal is a lovely country: it has plenty of sunshine, the people are lovely and the coffee is great. And it has plenty of property to buy, especially if you look outside of the big cities like Lisbon or Porto. Sadly, much of the rural property is abandoned, often in dire need of repair and restoration. Which  is probably exactly why an increasing number of foreigners tend to buy these places and turn them into anything from B&B’s to workshops, farms, small holdings and palatial residences.

Yet, despite the abundance of empty property, actually buying a place is much less straightforward than you’d think. In fact, buying a place in the sun can turn out to be quite an adventure in itself. If you ever look around on the internet for purchasing advise, it seems it comes with a big “be aware and get advice” in blinking bright neon lighting all over it…. and for a reason!  While in the beginning I dismissed all the talk about the trials and tribulations of buying a place in the sun as something that happens to holiday makers who buy a flat from a ruthless developer, I soon learned that not all of the problems are because someone is trying to fool unsuspecting foreigners. But also, and this is probably especially true in the case of rural property, many problems are simply the result of the way business is done historically here, with no bad intentions at all…

In my case, the first hurdle was dealing with the real estate agents. This was somewhat unexpected, as in the UK, estate agents tend to be highly motivated folks, who are literally chasing after any potential buyer. In Portugal, my experience couldn’t have been different: I was lucky to get a reply to an email inquiry maybe 1 out of 10 times, and then mostly stating that all the information was on their website (even though I usually asked for information that was actually not on the website to begin with).

buying direct…

The solution came in the form of pureportugal, a website where most of the property is advertised by the owners. This meant that I could email questions to the people selling the properties – and usually got an answer really quickly. The downside of this though is that now I am dealing directly with the owner, rather than someone necessarily experienced in selling property, which explains the problems with the deeds that followed. That said, from countless stories on the internet, it seems even a slightly clueless but well-intentioned owner is better than a disinterested estate agent. So maybe this is a blessing in disguise.

of deeds, licenses and men…

So, here came hurdle number two: the trouble with the “deeds” and “licenses”.  This is probably the most complicated and confusing part of the property purchase to navigate. Basically (or rather as far as I understand by now….), the land is divided up into either rustic land or urban land. That means, rustic land is land that is used for agriculture and has no buildings on, like a field, olive grove etc… Urban land is land with a building on (or it could have a building on it).

The next problem then is what sort of building: buildings can either have a license to live in, a license to use the building for agricultural purposes (think shed), or to use it for touristic purposes (like a B&B). Seems fairly straightforward, but it is anything but… As you can imagine, many of the places in the countryside have never really changed hands, and therefore many deeds and licenses are hopelessly out of touch with what is actually “on the ground”. Some farmers may have build a shed on land that isn’t supposed to have one, while others may have constructed houses or annexes, or even swapped land with neighbours etc…

This isn’t really helped by a stifling and complicated bureaucracy, which means that many people just never caught up with having the right deeds and licenses in place. Or the deeds are entirely out of date, like missing out buildings altogether or showing much smaller buildings than the actual buildings are etc…

The problem, however, comes when the place is sold – as then the licenses and deeds should be correct, or otherwise, the purchase might end up having to correct all of this, including incurring fines and even potentially having to demolish buildings. And, of course, any alterations can’t be done before the correct licenses are awarded.

This entire subject area is so complicated, that just about everyone I ran into who bought property here had some sort of horror story to tell. In that sense, I think I am quite lucky to have a lawyer who seems to have checked all this out and insisted that all of the licenses and deeds are 100% correct before the final purchase. Of course, things were not quite correct, …

the choice

Basically, at that point, I had to make a choice: I either look for another place, or I stick with the place that I like and wait for the process to complete.  Reading how other people have literally ‘abandoned’ plans to purchase upwards of a dozen properties because of the problems with the deeds and licenses, I decided to try and stick with this property. After all, the property I have set my eyes on seems to offer everything that I wanted, and in a location that is amazing. Having made that decision, my lawyer suggested putting a time limit into the contract: so if the legalisation hasn’t happened within a year, I can pull out and look for another property. With this reassurance, I decided it was a gamble worth taking, and, fingers crossed, I won’t need to go to plan B, visit lots and lots of other properties and hope that they have the right paperwork…. and start everything all over again. As luck would have it, shortly after deciding to stick with plan A, I was also lucky enough to be offered another contract for work, which meant that I was stuck in Lisbon until the summer anyway. In that sense, it seemed like a good choice to hold on and wait. Which also explains why I’m still in the big city, rather than in the countryside.

Unfortunately though, the process of legalising an existing property is indeed fairly exhausting – and time consuming.  My place as a buyer is very much that of a spectator in this steeplechase, but I really feel for what the vendor is going through. He has faced any possible hurdle that I could imagine: from the dossier being sent to the wrong department, forgotten to a barrage of visits, questions and requests, and the authorities are definitely not making this process any easier.

The side effect of this is, however, that the vendor and I have now become pretty close friends: Over the last few months, we have regular meetings for lunch, going on excursions together and having small updates about the trials and tribulations of the legalisation process. I have also learned lots about the local area, as the vendor loves to talk about traditions, hidden places and other trivia from the area. In that sense again, I’m quite glad I actually know whom I am dealing with, and not dealing with an anonymous other through an estate agent. I can only imagine how much more frustrating and complicated that would be!

Of course, when I started this ‘adventure’, I hoped to avoid all of this legalisation madness… but, it seems it simply is, more often than not, part and parcel of buying property here. You can be lucky and find the one with the right deeds and licenses, but it seems 9 out of 10 have some sort of problem with this. Or, as my fellow sojourners said: it’s just the way it is. Luckily, after several twists and turns over the last eight months or so, we are hopefully on the home stretch with all the paperwork. So at the moment, I’m keeping my fingers crossed… and stay tuned for updates 😉  …