CPCV
The promissory purchase agreement signed before the deed.
Overview
The promissory purchase agreement signed before the deed.
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What is the CPCV and why does it matter?
The contrato-promessa de compra e venda is the promissory purchase agreement signed before the deed. It fixes the price, the deposit, the completion deadline and the consequences of default for both parties. It is legally binding, and the deposit paid under it (sinal) is the amount at stake if the buyer fails to complete.
Key points
- The CPCV is binding: the deposit is genuinely at risk if you cannot complete.
- Sign it after due diligence, not before.
- Deadlines, conditions and default remedies deserve the closest reading.
- Have the draft reviewed independently so it reflects the specific property, the due diligence findings and the terms agreed.
What the promissory contract does
The CPCV commits the seller to sell and the buyer to buy on defined terms, and bridges the gap between agreement and completion — the period used to arrange financing, finalise documentation or await a licence or certificate.
It is not always used: where both parties are ready, the transaction can move directly to the deed. When it is used, it should reflect the outcome of due diligence rather than precede it.
Clauses that matter most
The value of the contract lies in its detail. A standard form may not reflect the specific property, the findings of due diligence, the financing structure, the agreed timetable or the conditions negotiated between the parties.
Review carefully
- Parties and property — Full identification of the sellers and of the property as registered and described for tax.
- Price and deposit — The amount of the sinal, when it is paid and how it is credited at completion.
- Deadlines — The date for the deed, who convenes it and what notice is required.
- Conditions — Any condition relating to financing, licences, regularisation of works or vacant possession.
- Condition of the property — What is included, what the seller must repair or remove, and the state in which it is handed over.
- Default — The remedies for each party if the other fails to complete.
The deposit and the consequences of default
Under Portuguese law, where a buyer in default fails to complete, the seller may in principle retain the deposit; where the seller is in default, the buyer may in principle claim the equivalent of double the deposit. The parties can vary or supplement these consequences in the contract, so the drafting must be read closely.
Additional protection is sometimes available depending on the transaction. In certain circumstances a promissory agreement may be given real effectiveness (eficácia real) and registered, subject to the applicable legal requirements and formalities. That is distinct from specific performance (execução específica), a legal remedy that may be available where a party fails to complete the promised transaction. A bank guarantee is another possibility. Whether any of these is appropriate and achievable is a matter for advice in the specific case.
Good to know
The deposit is usually the largest sum a buyer pays before completion. Its treatment on default should be understood before signature.
Signature and formalities
Signatures are commonly certified, and certain formalities apply where the contract is to have effect against third parties. Where a party cannot attend, signature through a representative under a power of attorney is possible if the document is properly drawn and, if signed abroad, legalised or apostilled as required.
Where this fits in the buying process
This guide expands on the "Review and sign the promissory purchase agreement" stage of the full buying process. Read it alongside the complete step-by-step guide to see what comes before and after.
Frequently asked questions
The Contrato-Promessa de Compra e Venda is the promissory purchase agreement signed before the deed. It records the agreed terms, the deposit and the consequences if either party fails to complete.
Checks are normally carried out before signing, because the promissory agreement usually commits the buyer. What should be checked depends on the property and the transaction.
Deposits are agreed between the parties and vary. The amount, how it is held and what happens to it if the purchase does not complete are contractual matters set out in the promissory agreement.
Next steps
This guide provides general information about buying property in Portugal and does not replace legal advice on a specific transaction.