CPCV Portugal — The Promissory Contract Explained

What is a CPCV in Portugal?

CPCV stands for Contrato Promessa de Compra e Venda — promissory contract of purchase and sale. It is a binding agreement between buyer and seller to complete the purchase of a specific property on specific terms by a specific date. The CPCV is signed before the final deed (escritura) and is the central legal instrument of a Portuguese property transaction.

The CPCV is governed by the Portuguese Civil Code (articles 410–442) and creates obligations enforceable in court. A common misunderstanding among foreign buyers is to treat the CPCV as a "preliminary" or "informal" document. It is not — it is the binding contract. The escritura that follows is mostly the formal execution before a notary of terms already locked in by the CPCV.

Why the CPCV matters more than the escritura

By the time you reach the escritura, the room for negotiation is essentially zero. The price, the property, the completion date, the deposit, the default consequences — all of these were fixed in the CPCV.

If something goes wrong between the CPCV and the escritura — a problem discovered in due diligence, a delay by the seller, a financing setback — your options depend almost entirely on how the CPCV was drafted. A CPCV with strong buyer protections gives you options. A CPCV drafted by the seller's lawyer typically does not.

Essential CPCV clauses

1. Identification of the property. By Registo Predial number and Caderneta Predial article, not just street address.
2. Identification of the parties. Full names, NIFs, residency status, marital regime. For married sellers, the spouse must consent.
3. Price and deposit. Total price, deposit amount, how the deposit is paid, where it is held, what happens to it on default.
4. Completion date. A firm date or a defined event (e.g. mortgage approval + 30 days). Avoid open-ended "as soon as possible" language.
5. Default treatment. What happens if buyer defaults, what happens if seller defaults. Should be symmetrical — if buyer loses deposit, seller owes double.
6. Conditions precedent. Mortgage approval, satisfactory due diligence, clearance of any specific issue, regulatory consents. The buyer should have the right to withdraw without penalty if any condition precedent fails.
7. Property condition. Description of what is included (fixtures, furniture, kitchen, appliances), and the seller's warranty as to condition.
8. Existing charges. Identification of any mortgage, condominium debt, or other charge to be discharged before completion.
9. Risk transfer. Until when the seller bears the risk of damage to the property.
10. Notary. Identity of the notary, location of the escritura, who pays the notary fees.
11. Language and governing law. Portuguese law. Contract typically in Portuguese, with certified translation for foreign-language buyers.

Deposit, signal (sinal), and default treatment

The deposit in a CPCV is technically called a sinal (signal) under Portuguese law. The default rule (Article 442 of the Civil Code) is:

• If the buyer defaults — the seller retains the signal.
• If the seller defaults — the seller must pay the buyer double the signal.

This default rule applies unless the CPCV agrees otherwise. Many seller-drafted CPCVs override this rule to the buyer's disadvantage — for example by limiting the seller's liability to refunding the signal only. Pushing back on these asymmetric default clauses is one of the most valuable things the buyer's lawyer does.

The signal amount is also negotiable, but typical practice is:

• Resale residential property: 10% of the price.
• Off-plan or new-build: 20%–30%, often in staged tranches tied to construction milestones.
• Luxury or high-value: sometimes lower percentage but larger absolute amount.

Conditions precedent in a Portugal CPCV

Conditions precedent (condições suspensivas) are clauses that allow the buyer to withdraw without penalty if a specific condition is not met. Common conditions precedent in a foreign-buyer CPCV:

• Mortgage approval by a specified date.
• Satisfactory due diligence — the buyer has the right to review the property's legal status and withdraw if material issues are identified.
• Discharge of identified mortgages or charges before completion.
• Legalisation of identified construction (pool, annex, extension) before completion.
• Settlement of condominium or tax debts before completion.
• Receipt of a specific document — habitation license, energy certificate, or other essential document.

Conditions precedent are the buyer's escape valve. A CPCV without conditions precedent is a CPCV in which the buyer's only options on a problem are: complete anyway, or lose the deposit.

CPCV mistakes foreign buyers make

1. Signing the CPCV provided by the seller's lawyer without independent review.
2. Accepting an English translation prepared by the seller without verifying it matches the Portuguese version.
3. Agreeing asymmetric default clauses (buyer loses deposit, seller only refunds).
4. Agreeing a vague completion date ("as soon as possible" / "within a reasonable time").
5. Not including a mortgage condition precedent when financing is required.
6. Not including a due diligence condition precedent.
7. Paying the deposit directly to the seller rather than to escrow.
8. Not pushing back on identified mortgages or charges — leaving them to be "sorted at the escritura."