- LR information on mortgages
Original name: Hipoteca
Definition of this right: Mortgage is a special real estate security which gives the creditor the right to be paid, according to registry rank, by the value of certain real estate properties belonging to the debtor or to a third party. Mortgage must be registered in order to become effective even between parties (articles 686º and 687º of the Portuguese Civil Code)
Each mortgage must clearly identify the property that guarantees the loan or the debt, because general mortgages are not permitted. (article 716º of the Portuguese Civil Code)
Type of right according to national classification: “Guarantee rights”
Observations: There are three types of mortgages:
Legal – The mortgage is, by all times, determined by law and the circumstances don’t depend on the owners or debtors. For example: the heir that hasn’t received any assets on the partition of succession, but only an amount of money the others will pay back, has the right to promote the legal mortgage on those assets. (article 704º of the Civil Code).
Judicial – The decision that demands the debtor to pay a certain amount of money has the legal power to register a mortgage on any properties belonging to him, even if it is not yet a final decision. (article 710º of the Civil Code)
Voluntary – The mortgage originated on a contract or a unilateral declaration of the owner. (article 712º of the Civil Code)
The new Civil Procedure Code (approved by Law 41/2013 June 26th) for the first time, established the possibility to convert an attachment into a mortgage as result of an agreement between the creditor and the debtor in the foreclosure procedure to pay the debt in parts. (article 807º of the Civil Procedure Code)
The mortgage will benefit from the priority of the attachment and it has been considered a voluntary mortgage.
1.1. With respect to the mortgage liability, the Portuguese -ASCR- mortgage system prepares in general two options:
a) Extracts include the global amount including all liabilities due to the loan (loan, interests or other debts). [E.g. The loan is 100,000 € and interest at 20,000 € is agreed. LR extracts indicate that the secured debt is the sum of both concepts, i.e. 120,000€].
b) Extracts include itemized liabilities arising from the loan, so that can be distinguished amount of loan and the other liabilities due to interests of the loan or others, guaranteed by the mortgage. [E.g. The loan is 100,000 and has agreed interest at 20,000 and mortgage cover up to 10,000 from other debts related to loan. LR extracts shall include separately information about these three types of debt].
1.2. Regular LR information in this system also comprises ordinarily:
1. Contract or basis of obligation guaranteed by a mortgage (e.g. a loan)
2. Name of the mortgagee or creditor
3. Name of the mortgagor or debtor (land owner)
However, there should not be expected any information about deadline of the loan or credit or other contract which is basis of the mortgage, deadline of the mortgage or deed whereby mortgage was constituted or awarded.
1.3. With respect to the mortgage rank (preference of the mortgage in comparison with other mortgages or encumbrances), this LR system has the following criteria:
1. Mortgage rank depends on date of registration of the mortgage, so whoever may ascertain mortgage rank taking into consideration the information on the date of registration of the mortgage.
OTHER GUARANTEE RIGHTS
Original name: Consignação de Rendimentos
Definition of this right: Income consignment consists of the application of the incomes of a certain immovable (or movable) property to ensure the fulfilment of an obligation and interests. (article 656º of the Civil Code)
Label of classification: “Guarantee rights”
Your observations: The registration of the income consignment will mention the term of duration, or, when no term is determined, the amount to be paid under the consignment. (article 95º, nº 1 paragraph p) of the Land Registry Code.)
ASSIGNMENT OF ASSETS TO CREDITORS
Original name: Cessão de Bens aos Credores
Definition of this right: Assignment of assets to creditors happens when there is a transfer of assets to the creditor, who is commissioned by the debtor to liquidate those assets, in whole or in part, to the satisfaction of his credit.
The assignment will be registered when respecting to immovable property.
(articles 831º and 832º of the Civil Code)
Label of classification: “Guarantee rights”
Your observations: Some authors say it is a kind of an attachment by agreement.
- LR Information on property rights
In this LR system these are the following:
Original name: Posse
Definition of this right: Possession is the power that arises from someone’s actions corresponding to property right or another right in rem (article 1251º Portuguese Civil Code).
Type of right according to national classification: “Provisional Right in Rem” (according to Law Professor M. H. Mesquita)
Observations: The mere possession is registered only in view of a registrar’s decision (delivered in a special process organized in the Land Registry Service, according to articles 116º and following of the Portuguese Land Registry Code (before 2001 only in view of a judicial decision) in which it is recognized that the possessor has peaceful and public possession for a period not less than 5 years. It has the potentiality to shorten the period for adverse possession (for usucapio).
It is very unusual to register the mere possession.
(articles 1294º, 1295º of the Portuguese Civil Code and article 2º, nº 1 paragraph e) of the Portuguese Land Registry Code.)
Original name: Usufruto
Definition of this right: Usufruct is the right to possess fully and temporarily one thing or right, belonging to a different person, without changing the form or substance of it. (Article 1439º of the Portuguese Civil Code)
Type of right according to national classification: “Right of use”
Observations: It is a strictly personal right regardless the matrimonial property regime chosen – article 1733º of the Civil Code.
Usufruct right may be subject to a deadline. However the duration can never exceed the life of the usufructuary. If the usufructuary is a legal person, public or private, the maximum duration is thirty years (article 1443 CC)
USE AND HOUSING
Original name: Uso e Habitação
Definition of this right: The right of use is the power to use a certain thing belonging to a different person, having the benefits and receiving the fruits of it to the extent of the needs of the user and his family.
When the same right refers to residential house it is called housing right. (Article 1484º Civil Code)
Type of right according to national classification: “Right of use”
Observations: It is also a strictly personal right regardless the matrimonial property regime chosen – article 1733º of the Civil Code.
The right of use and housing cannot be conveyed or encumbered; therefore it is also not sizeable. (Article 1488º of the Civil Code and article 736º, paragraph a) of the Portuguese Civil Procedure Code.)
SUPERFICIES / SURFACE
Original name: Superfície
Definition of this right: Superficies is the right to build or to maintain an everlasting or temporary construction, as well as to plant or maintain plantations, on a property belonging to a different owner other The construction may occupy the soil or the subsoil.
(articles 1524º, 1525º of the Civil Code)
Type of right according to national classification: “Right of use”
Observations: The right may arise from a contract, a will or from adverse possession (usucapio) or from the sale of the building or the existing trees separately from the soil.
It constitutes a new property right over the building or plantations – article 1528º of the Civil Code.
The units of a building in condominium can be object of a surface right.
Original name: Servidão
Definition of this right: Servitude is a burden imposed on an immovable property to the exclusive benefit of another, belonging to a different owner. The immovable property in which favour the easement is constituted is called dominant tenement; the property suffering it is the servient tenement.
The servitude content may cover any utility to be profited through the dominant tenement.
(articles 1543º and 1544º of the Civil Code)
Type of right according to national classification: «Right of use”
Observations: The servitude is inseparable from the immovable property.
The servitude cannot be mortgaged. (Article 1545º of the Civil Code)
Most common easements regard the right of access and servitude of waters.
It is also possible to register administrative servitudes which are established in order to satisfy specific public interests determined by law.
Original name: Propriedade Horizontal
Definition of this right: The units (for inhabitation, commerce, industry, parking, etc) that integrate a building, when sufficiently independent and autonomous entrance to a common part of the building or to a public road, may belong to different owners.
Each owner has an exclusive right of ownership to the unit and a co-ownership right to the common parts of the building. These two rights are inseparable. (Article 1414º of the Civil Code)
Compulsory common areas are: the soil and the foundations, columns, pillars, supporting walls and all the other parts that make up the structure of the building; the roof or roof terraces (although intended for use in any particular unit)); the lobbies, foyers, staircases and corridors of use or common passage to two or more joint owners; the general facilities of water, electricity, heating, air conditioning, gas, communications and similar. (Article 1421º of the Civil Code)
Type of right according to national classification: “Right of use”/”Property Right with restrictions”
Observations: Regardless of the fact that this right leads to the possibility of inscribing the ownership over the units of the building, the institution of this regime by the original proprietorship has its own inscription at LR, and leads to the opening of the “folios” of the units.
The rights and obligations of the owners on the common parts of the building shall be governed in the deed and inscribed in the register. (article 1418º of the Civil Code and article 95º, nº 1 paragraph p) of the Land Registry Code).
Original name: Direito Real de Habitação Periódica
Definition of this right: Right to occupy, perpetual or temporarily, for a certain period each year, a tourist housing integrated in a “condominium” (which might be formally constituted or not) designed for touristic purposes.
(Executive Law 275/93 August 5th)
Type of right according to national classification: “Right of use” /”Property Right with restrictions”
Observations: The inscription of this right gives place to the opening of a new “folio” (unit) for each period (usually a week). The owner of the condominium entitled for “time sharing” can not constitute any other real rights on the housing units.
Original name: Empreendimento Turistico
Definition of this right: Touristic venture is the establishment designed to provide accommodation services, in return for payment, offering an appropriate set of structures, equipments and complementary services.
(Executive Law 39/2008 March 7th)
Type of right according to national classification: Right of use (in the sense of using the property, by the owner. to legally admitted purposes)
Observations: The touristic venture may cover several properties, belonging to different owners.
However the development and administration of the venture must be held by a single person or entity.
Original name: Arrendamento
Definition of this right: Lease is the contract under which one part, provides the other, the use of an immovable, for a certain purpose, in return for payment.
(articles 1022º and 1023º of the Civil Code)
Type of right according to national classification: Right in persona – when registered, you may say it becomes exercisable against the world at large, as a right of use.
Observations: Excepted the rural lease, only the lease for a period longer than 6 years can be registered. The transmissions or encumbrances of the lease are also registered.
Original name: Contrato de locação financeira
Definition of this right: Financial leasing is the contract under which one part, the locator (an authorized financial institution), provides the other (the tenant), in return for payment, the use of a movable or immovable, specially acquired or constructed by indication of that tenant.
The lessee is assumed to receive all the benefits derivable from the use of the good and to incur the costs and risks associated with ownership. The financial leases are treated as loans from the lessor to the lessee and enable the lessee to purchase the durable asset in the end of the contract.
After an agreed period the tenant may purchase the thing for a determined or determinable price by simple application of the criteria set out in the contract. (Executive Law 149/95 June 24th)
Type of right according to national classification: According to the doctrine this right may be classified as a right of use or a right in persona. Some authors defend it is also a right of acquisition.
- Information on judicial restrictions included in Section “C”
This information includes LR entries or notices related to restrictions decreed by judicial orders which mean either a claim on the property, or a challenge on the registered title, or an attachment of the property to debts as a result of judicial procedures, etc.
In this system:
a) Information on judicial restrictions or charges forms part of the regular land register extracts
b) Means of formal publicity ordinarily contains information about the judicial order that leads to the registration of notices or caveats; about if notices or caveats are temporary or indefinite entries, or warn about this issue.
CLAIMS ON PROPERTY OR NOTICE OF DISPUTE
Name of the restriction or name or type of judiciary order which originates it: Ações
Purpose or purposes of the order or restriction:
1. The claims which purpose is the recognition, modification or extinction of any rights subject to registration over immovable properties must be registered.
2. The claims which purpose is the reform, the declaration of nullity or annulment of a registration act or its cancellation.
3. The claims which purpose is to obtain precautionary measures (previous to the final decision) like seizure or freezing or any other that affect the free transmission of the immovable properties.
The final decisions on the claims must also be registered.
(Article 3º of the Land Registry Code)
Your observations: The register of the claim is provisional but (since 2008) doesn’t have deadline.
The inscription of the final decision will benefit from the priority of the claim previously registered, in the rank of the rights and burdens.
Name of the restriction or name or type of judiciary order which originates it:Penhora
Purpose or purposes of the order or restriction: The attachment executes the seizure of the debtor’s assets which become available to the process to satisfy the creditor’s claim. Attachment is regulated in the Civil Procedure Code – article 735º)
Your observations: If the owner of the immovable property is different from the defendant, there will be a provisional inscription (usually for one year).
Name of the restriction or name or type of judiciary order which originates it: Arresto
Purpose or purposes of the order or restriction: The seizure is a way of preserving the assets of the debtor as a guarantee and of preventing the debtor from transmitting them in detriment of the creditor – it is usually used as a preliminary measure for enforcement proceeding. (Article 619º of the Civil Code)
Your observations: The register of the future attachment will benefit from the priority of the seizure previously registered, in the rank of the rights and burdens.
If the owner of the immovable property is different from the defendant, there will be a provisional inscription (usually for one year).
Name of the restriction or name or type of judiciary order which originates it:Arrolamento
Purpose or purposes of the order or restriction: When someone has righteous fear that the assets belonging to another person or entity (or to a society or marital patrimony that has been dissolved and is about to be parcelled out) may be hidden or dissipated, can require to the court the enlisting of them.
(Article 403º of the Civil Procedure Code)
Your observations: It is usually a preliminary measure and often used before divorce.
Name of the restriction or name or type of judiciary order which originates it:Insolvência
Purpose or purposes of the order or restriction: There is insolvency when the assets of a natural or legal person are less than its liabilities.
The insolvency proceeding is a universal foreclosure designed for liquidation of the insolvent´s assets.
(Insolvency and Company Recovery Code approved by Executive Law No. 53/2004 March 18th)
Your observations: The judicial declaration of insolvency is registered:
– In the civil (natural persons) registry –by annotation on the birth certificate;
– In the mercantile registry – by an inscription on the file of the legal person;
– In the land registry regarding the seizing of the assets belonging to the insolvent.
(Article 38 of the insolvency code)
OTHER ACTS THAT AFFECT FREE TRANSMISSION OF IMMOVABLE PROPERTIES
Name of the restriction or name or type of judiciary order which originates it: Any other judicial/administrative orders that may affect the free transmission of immovable properties.
Purpose or purposes of the order or restriction:
Your observations: Examples:
– selling prohibition on assets, for example prior to interdiction procedure; etc
Note: Judiciary restrictions may focus on property right, itself, other rights of use and on credits secured by mortgage or income consignment.
- Information about other restrictions
For purposes of the information, orders of attachment or seizure decreed by administrative authorities lead to administrative restrictions or burdens.
Fiscal burdens (tax liabilities falling on the properties and entered in the Land Register) work in this system as real encumbrances. (In Portugal the only fiscal burdens that are inscribed are attachment or seizure decreed by tax authority, that do not have any differences from the judicial ones, and that are real encumbrances; other burdens, such as «statutory right of lien of the State», are not inscribed at LR).
Other inscriptions which are not “rights of use” nor “Security rights” or “restrictions”
a. Acquisition rights in rem – rights from which can arise the acquisition of the property right or other “right of use”
PROMISSORY CONTRACT OF TRANSFER WITH REAL EFFECTS
Original name: Contrato Promessa com Eficácia Real
Definition of this right: Promissory contract is an agreement by which someone agrees to celebrate a specific contract. If concerning immovable property and the parties assign and expressly declare that the agreement has real effects, it has to be registered.
(Articles 410º and 413º of the Civil Code)
Label of classification: Right of Acquisition”
PRE-EMPTION CONTRACT WITH REAL EFFECTS
Original name: Contrato de Preferência com Eficácia Real
Definition of this right: Pre-emption contract is an agreement by which one person assumes the obligation to give preference to someone else on the sale of a certain thing. If concerning immovable property and the parties assign and expressly declare that the agreement has real effects, it has to be registered.
(Articles 414º and 421º of the Civil Code)
Label of classification: “Right of Acquisition”
Your observations: In the Portuguese Law there are several legal pre-emption rights that are not registered – the renter in the lease contract; – the co-owner (article 1409º); – the owner of the soil with superficies right (article 1535º); – the owner of the servient tenement with burden of access; – the co-heir regarding the sale of the right in the inheritance, etc.
There are also some other pre-emption rights, or rights of first refusal, regarding public interests for example, for architectural heritage protection, or for social habitation policy.
CONTRACT WITH APPOINTMENT OF A THIRD PARTY
Original name: Contrato para Pessoa a Nomear
Definition of this right: When celebrating a contract one party can reserve the right to appoint a third person who acquires the rights and assumes the obligations from the contract.
The right to appoint the third party must be registered and also the appointment of that third person. (articles 452º and 456º of the Portuguese Civil Code)
b. Operations of land division
LAND DIVISION OPERATION FOR URBANIZATION PURPOSE
Original name: Operação de Transformação Fundiária – Loteamento
Definition: Land division operations are the actions approved by public authorities (upon a private request or not) that create, or have the effect of creating, one or more plots designated, immediately or subsequently, for urban construction and resulting from a division of one or more immovable properties or from reparcelling. (Executive Law nº 555/99 July 6th)
Type of right according to national classification: Restriction to the property right
Observations: The inscription of the land division for urbanization purposes mentions all the building constraints in order to make them binding against third parties.
CONCESSION OF AN IMMOVABLE PROPERTY IN THE PUBLIC DOMAIN
Original name: Concessão em Bens de Domínio Público
Definition: It is possible to say that the concession of an immovable property in the public domain is the act by which a public authority temporarily transfers to a private party the rights of exploration of a certain immovable property in the public domain.
It is only possible to register the concession in order to inscribe a mortgage on it.
(article 2º nº 1 paragraph v) of the Land Registry Code)
Origin: “Right of use” (Administrative)
Observations: The transmissions of the concession are also registered.
ADMINISTRATIVE PROCEDURE FOR DEMOLISHING CONSTRUCTION
Type or name: Embargo de obra
Purposes of this restriction: To give public notice that there is a construction that has not been dully licensed, so it is suspended and forbidden to proceed.
Both, the decision of suspension and its cancellation or expiry are given publicity through land registry.(articles 102º onwards of Executive Law No. 555/99, December 16th, legal regime for building and urbanization)
Origin: Administrative (municipal government)
COMUNICATION OF PUBLIC UTILITY PREVIOUS TO EXPROPRIATION
Type or name: Declaração de Utilidade Pública
Purposes of this restriction: To give public notice that the immovable (or part of it) will be expropriated for public utility.
(Legislative Act n. 168/99, September 11th – Expropriation Code)
Origin: Administrative (State Government, Regional, or city council, depending on the issue)