Promissory Purchase Agreement (CPCV): Your Essential Guide Before Signing by RE/MAX

­A Promissory Purchase and Sale Agreement — known in Portugal as a Contrato-Promessa de Compra e Venda, or CPCV — is one of the most important documents in a Portuguese property transaction. It establishes the price, deposit, deadlines, financing conditions and consequences if either the buyer or the seller fails to complete the sale.

At RE/MAX Cidadela, we have been supporting property buyers and sellers in Cascais, Estoril, Lisbon, Oeiras and Sintra since 2004. After helping more than 4,800 families complete property transactions, including many foreign and non-resident buyers, we have seen that some of the most expensive problems arise not at the final deed, but at the moment the CPCV is signed.

A mortgage may be refused, a bank valuation may come in below the agreed price, unauthorised alterations may be discovered or a completion deadline may become impossible to meet. Whether the buyer loses the deposit, receives it back or can require the seller to complete the transaction will often depend on the exact wording of the CPCV.

The CPCV does not transfer ownership of the property. Ownership is normally transferred later through the final purchase contract, which may be completed by public deed, authenticated private document or through a service such as Casa Pronta. However, once the CPCV is signed, both parties are generally legally committed to completing the transaction under the agreed conditions.

This guide explains what a CPCV should contain, which documents should be checked, how mortgage and valuation clauses work, what happens in the event of non-performance and which risks foreign buyers should consider before transferring a substantial deposit.

Important: This article is based on our practical experience coordinating property transactions in Portugal and provides general information only. Every CPCV should be reviewed and adapted by a Portuguese lawyer or solicitor according to the property, financing structure and circumstances of the parties.

Quick Summary: What Should You Know Before Signing a CPCV?

• A CPCV is generally not legally mandatory, but it is widely used to bind the buyer and seller while the transaction is prepared.
• The contract should identify the parties, the property, the agreed price, the deposit, payment conditions, completion deadline and consequences of non-compliance.
• Mortgage pre-approval does not guarantee that the bank will approve the final loan or value the property at the agreed purchase price.
• A financing clause should explain what happens if the loan is refused, approved for an insufficient amount or delayed beyond the expected deadline.
• Money paid by the buyer is generally presumed to be a deposit, or sinal, unless the contract establishes a different treatment.
• A buyer who is definitively responsible for failing to complete may lose the deposit. If the seller is responsible, the buyer may generally claim twice the deposit.
• An ordinary CPCV usually creates contractual obligations between the parties but does not automatically protect the buyer against every action involving third parties.
• Property documentation and legal due diligence should normally be completed before the buyer transfers a substantial deposit.

What Is a CPCV in Portugal?

A CPCV is a contract under which one or both parties agree to enter into a future contract. In a typical property transaction, the seller promises to sell a specific property and the buyer promises to purchase it under the conditions established in the document.

Portuguese Civil Code Article 410 establishes the general regime for promissory contracts and requires a promise concerning a contract that must be documented to be recorded in a document signed by the parties.

The CPCV normally gives the parties enough time to complete the steps required before the final transaction, including:

• obtaining mortgage approval;
• completing the bank valuation;
• confirming the property’s legal status;
• collecting missing documentation;
• resolving mortgages or other registered charges;
• exercising any applicable legal rights of preference;
• organising tax payments;
• preparing powers of attorney for parties living abroad;
• scheduling the final purchase contract.

The contract should not be treated as a standard template. A CPCV for a completed apartment with no mortgage is different from a contract involving a new development, an inherited property, illegal alterations, multiple owners, an existing tenant or a non-resident buyer using foreign income.

Is a CPCV Mandatory When Buying Property in Portugal?

A CPCV is not generally mandatory. The parties may proceed directly to the final purchase contract when the documentation, financing and other requirements are already in place.

In practice, however, most transactions require a period between the acceptance of the offer and completion. The buyer may need a mortgage and the seller may need to obtain documents, cancel an existing mortgage or prepare the property for delivery. The CPCV defines what should happen during that period and prevents the transaction from depending only on verbal promises.

Without a CPCV, a reservation or accepted offer may not provide the same level of contractual protection. The exact legal effect will depend on the wording of the document, the amounts paid and the conduct of the parties.

Reservation Agreement vs CPCV vs Final Purchase Contract

These three stages should not be confused.

A reservation payment should only be made when the document clearly states:

• who will hold the money;
• whether the payment is refundable;
• how long the reservation lasts;
• what happens if the parties do not agree on the CPCV;
• whether the amount will later be deducted from the deposit or purchase price.

The final purchase may be completed by public deed, authenticated private document or through Casa Pronta, which allows the purchase, mortgage and registration procedures to be handled together.

What Should a CPCV Include?

A well-prepared CPCV should reflect the specific transaction rather than merely list the names of the buyer and seller.

Identification of the parties

The contract should include the full names, tax numbers, identification details, addresses, marital status and matrimonial property regime of the parties.

Where a company, inheritance, power of attorney or legal representative is involved, the contract should confirm that the person signing has sufficient authority to bind the relevant owner or buyer.

Precise identification of the property

The property should be identified using information from the Land Registry and Tax Authority records, including:

• address;
• property description number;
• tax registration number;
• autonomous unit or fraction;
• registered areas;
• storage rooms, parking spaces or other associated units;
• registered ownership;
• mortgages, liens, usufructs or other charges.

Differences between the physical property, Land Registry, tax records, architectural plans and condominium documents should be investigated before signing.

Purchase price and payment schedule

The CPCV should state the total price, how much has already been paid, the amount paid upon signing and the balance due at completion.

Where payment is made in stages, particularly in new developments, each payment date and triggering event should be clearly defined.

Deposit or sinal

Portuguese Civil Code Article 441 presumes that amounts delivered by the prospective buyer to the prospective seller under a promissory purchase agreement have the nature of a deposit, even when described as an advance payment.

There is no legally fixed deposit percentage. A deposit of around 10% is frequently negotiated in residential transactions, but the amount may be lower or higher depending on the timetable, bargaining position, construction stage and risks involved.

The buyer should assess the amount in terms of potential loss, not only as a percentage of the price. A 20% deposit on a €1 million property creates an exposure of €200,000 if the buyer becomes responsible for definitive non-completion.

Completion deadline

The contract should establish when the final purchase must take place and which party is responsible for scheduling it.

A poorly drafted clause such as “completion will take place within 60 days” may leave unanswered questions:

• When does the period begin?
• Can it be extended?
• What happens if the bank is delayed?
• How much notice must be given?
• Which documents must the seller provide before the date?
• Is the date essential, or can a further deadline be granted?

The CPCV should also establish the permitted method for formal notices, such as registered post or email to specified addresses.

Delivery of the property

The contract should clarify whether the property will be delivered:

• vacant and free of occupants;
• with or without tenants;
• free of personal belongings;
• with agreed furniture and equipment;
• in its current condition;
• after specified repairs or works;
• with keys, access cards and technical documents.

Where furniture, appliances or works form part of the agreement, an inventory or annex can prevent later disagreements.

Documents to Check Before Signing a CPCV

Signing the CPCV before reviewing the property’s legal and technical documentation can leave the buyer contractually committed to a transaction with unresolved problems. Where possible, the relevant checks should be completed before a substantial deposit is transferred.

The documents required will depend on the type, age and legal status of the property. Buyers should start by reviewing the essential documents for buying a house in Portugal, including the Land Registry certificate, tax registration document, energy performance certificate and relevant urban planning records.

The documents normally examined before signing a CPCV may include:

• permanent Land Registry certificate;
• tax registration document;
• energy performance certificate;
• applicable urban planning documents;
• approved architectural plans;
• condominium regulations;
• minutes of recent condominium meetings;
• condominium debt declaration;
• evidence relating to construction or alteration works;
• tenancy agreements;
• mortgage cancellation arrangements;
• evidence of any applicable legal right-of-preference procedure.

The Land Registry certificate should confirm the registered owner and reveal any mortgages, attachments, usufructs or other rights affecting the property. The tax record should then be compared with the Land Registry information, approved plans and the property as it physically exists.

For apartments, the buyer should also examine the financial and technical situation of the condominium. Planned works involving the façade, roof, lifts, garage or building structure may result in significant additional costs after completion, even when the apartment itself appears to be in good condition.

Any discrepancies between the documents and the physical property should be clarified before the CPCV or expressly addressed through appropriate contractual conditions.

The Most Important Clause for Buyers Using a Mortgage

A buyer who needs financing should not assume that a general reference to “bank approval” provides sufficient protection.

A useful financing condition should address at least four possible outcomes:

1. The bank rejects the buyer’s mortgage application.
2. The bank approves a lower loan than the buyer requires.
3. The bank values the property below the purchase price.
4. The bank does not issue a final decision before the contractual deadline.

Under the Banco de Portugal framework, the loan-to-value ratio is calculated using the lower of the purchase price and the bank’s valuation of the property. As a general maximum, lending should not exceed 90% for a principal permanent residence and 80% for other purposes, although each institution applies its own credit decision and risk criteria.

Consider a buyer agreeing to purchase a property for €600,000 and expecting a loan based on that price. If the bank values the property at €540,000, the maximum potential loan will be calculated using the lower valuation, not the agreed €600,000 price. The buyer may therefore need substantially more equity than expected.

Even a positive solvency assessment does not oblige a bank to approve the mortgage. The Banco de Portugal confirms that a credit institution is not required to grant the loan merely because its solvency analysis is positive.

The financing clause should therefore be adapted to the amount the buyer needs and not simply state that the contract depends on “obtaining credit”.

It should establish:

• the minimum required loan amount;
• the deadline for obtaining a final decision;
• whether a minimum valuation is required;
• what proof of refusal must be provided;
• whether the buyer must apply to more than one bank;
• when the deposit must be returned;
• whether the parties may extend the deadline by agreement.

The buyer must also act diligently. A financing condition should not allow the buyer to avoid the transaction after failing to submit documents, abandoning the application or requesting unrealistic financing.

Should a Technical Inspection Be Completed Before the CPCV?

A legal document review and a technical inspection serve different purposes.

The legal review examines ownership, registration, licences, contracts and obligations. A technical inspection may identify damp, roof problems, structural concerns, defective plumbing, electrical risks, insulation issues or unauthorised alterations.

Where possible, the inspection should be completed before the CPCV. If this cannot be done, the contract may make the transaction conditional on a satisfactory inspection completed by a specific date.

A clause stating only that the buyer “accepts the property in its current condition” may significantly reduce the buyer’s practical negotiating position after defects become known.

What Happens If the Buyer Fails to Complete?

Portuguese Civil Code Article 442 provides that when the party who paid the deposit fails to perform for a reason attributable to that party, the other contracting party may retain the deposit.

However, not every delay or minor contractual breach automatically results in the loss of the deposit.

The legal consequences may depend on whether there is:

• a temporary delay;
• failure to meet an essential deadline;
• an express refusal to complete;
• failure to complete after a valid additional deadline;
• impossibility caused by one of the parties;
• a contractual clause defining a particular event as definitive non-performance.

Before terminating the CPCV and retaining the deposit, the circumstances and notice procedure should be reviewed by a lawyer.

The contract should also avoid suggesting that unlimited additional damages can always be claimed. Article 442 states that, unless the parties agree otherwise, the deposit regime prevents the parties from demanding another indemnity for non-performance beyond the consequence established for the deposit.

What Happens If the Seller Fails to Complete?

When definitive non-performance is attributable to the seller who received the deposit, the buyer may generally demand twice the amount paid as a deposit.

For example, if the buyer paid a €40,000 deposit and the seller definitively refuses to complete because another buyer has offered more, the buyer may seek repayment of €80,000, subject to the contract and legal circumstances.

The CPCV may also raise the possibility of specific performance, under which a court judgment can produce the legal effect of the missing declaration of the party who failed to complete.

Article 830 of the Civil Code provides for this remedy where someone has undertaken to enter into a contract and fails to do so, provided that there is no contrary agreement and the nature of the obligation does not prevent it. The existence of a deposit or contractual penalty may affect the availability of this remedy, so it should not be presented as automatic.

The appropriate response depends on the CPCV, the type of default, third-party rights and whether completion remains legally and practically possible.

Does the CPCV Prevent the Seller from Selling to Someone Else?

The CPCV contractually obliges the seller to complete the sale with the agreed buyer. Selling the property to someone else may place the seller in serious breach of contract.

However, an ordinary CPCV normally creates obligations between the parties. It does not necessarily give the buyer automatic protection against every third party.

Portuguese Civil Code Article 413 allows the parties to attribute real effectiveness to certain promises concerning registered assets. For that protection to operate against third parties, additional formalities and registration are required.

Most standard residential CPCVs do not have registered real effectiveness. Where there is a particular risk involving creditors, insolvency, multiple transactions or potential third-party claims, the buyer should obtain specific legal advice about additional protection.

Can a Buyer or Seller Withdraw After Signing?

A party cannot normally withdraw merely because they have changed their mind, found a better property or received a more attractive offer.

Withdrawal without the contractual or legal right to do so may constitute non-performance.

A party may be able to terminate or avoid the contract when:

• a valid condition precedent is not fulfilled;
• the other party definitively fails to perform;
• the CPCV grants a specific withdrawal right;
• the parties mutually agree to cancel;
• the contract is invalid or legally challengeable;
• another legally recognised ground applies.

There is no general cooling-off period for an ordinary CPCV comparable to the withdrawal rights consumers may have for certain online purchases.

What Happens If One of the Parties Dies Before Completion?

Article 412 of the Civil Code states that rights and obligations arising from a promissory contract that are not exclusively personal are generally transferred to the parties’ successors.

Therefore, the death of a buyer or seller does not necessarily terminate the CPCV.

In practice, death may delay completion because the heirs must be identified and the estate may need to be formally represented. A carefully drafted contract can address succession, deadlines and the consequences of an unexpected delay.

Buyers who depend on mortgage financing should also understand what will happen if the borrower dies before the bank releases the funds, since mortgage-related insurance may not yet be effective.

Can a CPCV Be Signed from Abroad?

Foreign and non-resident buyers do not necessarily need to travel to Portugal solely to sign a CPCV.

Depending on the contract and signing formalities, the document may be signed remotely or through a representative using a power of attorney. However, the chosen method should be confirmed before funds are transferred.

A power of attorney should state clearly what the representative may do, including:

• signing the CPCV;
• agreeing or changing conditions;
• paying or receiving deposits;
• signing the final purchase contract;
• contracting the mortgage;
• paying taxes;
• registering the property.

A general power of attorney may not be sufficient for every stage of the transaction. Foreign documents may also require notarisation, an apostille and an official translation.

Special Risks in New-Build and Off-Plan CPCVs

A CPCV for a property under construction should contain more protection than a contract for a completed and legally registered home.

The buyer should examine:

• the developer’s ownership or development rights;
• planning approval and construction status;
• expected completion date;
• permitted extensions;
• specifications, plans and finishes;
• area tolerances;
• staged payments;
• bank guarantees or other payment protection;
• consequences of material changes;
• snagging and defect procedures;
• conditions for issuing the relevant urban planning documentation;
• assignment of the buyer’s contractual position;
• consequences of developer insolvency.

Marketing images should not be treated as a substitute for contractual specifications. Materials, brands, dimensions, parking spaces, storage and common facilities should be described in an annex whenever they influence the decision to purchase.

Two Illustrative CPCV Cases

Case 1: Mortgage approved, but the valuation was too low

A buyer agreed to purchase an apartment for €500,000 and paid a €50,000 deposit. The buyer had received an initial indication that financing was possible but had not completed the property valuation.

The bank later valued the property at €440,000. Because the loan was calculated using the lower valuation, the buyer needed substantially more cash than expected.

The CPCV referred only to “mortgage approval” and did not establish a minimum loan amount or valuation. This created a dispute over whether the buyer could recover the deposit.

Practical lesson: Financing clauses should address the required loan amount and the possibility of a low bank valuation, not only complete refusal.

Case 2: The seller received a higher offer

A seller signed a CPCV and accepted a €30,000 deposit. Before completion, another buyer offered significantly more for the property.

The seller could not simply cancel the first transaction because the market had changed. Refusing to complete could result in a claim for twice the deposit and potentially other legal proceedings depending on the contract.

Practical lesson: A CPCV protects both sides. Sellers should only sign once they are prepared to complete under the agreed price and conditions.

CPCV Checklist Before Signing

Before signing or paying the deposit, confirm that:

1. The registered owners and everyone required to consent are correctly identified.
2. The property description matches the physical property.
3. Mortgages, liens, usufructs and other charges have been examined.
4. Urban planning irregularities and unauthorised works have been investigated.
5. Condominium debts and planned works have been checked.
6. The deposit amount and consequences of non-performance are understood.
7. The completion deadline and notice procedure are clear.
8. The financing clause states the minimum required loan and addresses valuation risk.
9. Furniture, repairs, vacant possession and included areas are recorded.
10. The contract has been reviewed by an independent Portuguese legal professional.

Frequently Asked Questions About CPCVs in Portugal

Can I sign a CPCV without a lawyer?

It is possible in many cases, but it is not advisable to sign a substantial and binding property contract without independent legal review. The real estate consultant can coordinate the transaction and documentation, but the buyer or seller should obtain legal advice on the contractual wording and risks.

Is a deposit mandatory?

No. Portuguese law does not establish that every CPCV must include a deposit. However, deposits are common because they provide a financial consequence if a party is responsible for definitive non-performance.

How much should the CPCV deposit be?

There is no fixed legal percentage. Around 10% is common in many residential transactions, but the amount is negotiable. Buyers should consider the absolute sum at risk, while sellers should consider whether the amount offers sufficient protection.

Can the deposit be held by a lawyer instead of the seller?

The parties may agree that funds are held by a lawyer or another authorised stakeholder until defined conditions are met. The CPCV or separate holding agreement should clearly establish when the money can be released or returned.

How long is there between the CPCV and completion?

The period may range from a few weeks to several months. The appropriate deadline depends on mortgage approval, documentation, rights of preference, construction status and the circumstances of the parties.

Can furniture be included in the CPCV?

Yes. The items should be identified in an inventory or annex, ideally with photographs, condition details and confirmation of whether their value is included in the property price.

Can the buyer enter the property before completion?

Only when the seller expressly agrees and the arrangement is documented. Early occupation, possession of keys or commencement of works can create liability, insurance and possession risks.

Does signing a CPCV mean the buyer owns the property?

No. A CPCV creates an obligation to complete the transaction but does not normally transfer ownership. Ownership is transferred through the final legally valid purchase contract.

Conclusion: The CPCV Should Protect the Transaction, Not Create New Risks

The CPCV is one of the most important documents in a Portuguese property transaction. It determines what the buyer is purchasing, how much will be paid, when completion must occur and what happens if the financing, documentation or transaction does not proceed as expected.

A strong CPCV does more than confirm the agreed price. It anticipates the points where property transactions commonly fail: low bank valuations, missing documents, unauthorised works, delayed mortgage decisions, existing charges, condominium liabilities and disagreements over deadlines.

The safest approach is to complete the relevant due diligence before transferring a substantial deposit and to ensure that the wording reflects the actual property, financing structure and circumstances of the parties.

Buying or Selling Property in Portugal?

RE/MAX Cidadela has supported property buyers and sellers in Cascais, Estoril, Lisbon, Oeiras and Sintra since 2004.

Our team coordinates the property search or sale, documentation review, negotiation, financing process and preparation for completion, working with specialised legal and mortgage professionals whenever required.

Download our Complete Guide to Buying a Home in Portugal or contact RE/MAX Cidadela for professional support throughout your property transaction.

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By Pedro Pettermann
Pedro Pettermann is a Broker at RE/MAX Cidadela in Cascais, with over 20 years of experience in the real estate market across the Cascais coastline, Lisbon, Oeiras, and Sintra. With an MBA from IE Business School, he combines strategic vision with deep local expertise. Recognized as a specialist in the real estate market, mortgage financing, and digital marketing, he helps owners and buyers make confident and profitable decisions.

At RE/MAX Cidadela, we have already helped more than 4,800 families successfully sell or buy the home of their dreams