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Buying a house in a tourist resort

What is a constitutive deed (título constitutivo)?
It is a document regulating the administration of a tourist resort, if the development is owned by various property owners. Among other aspects, this document defines the rights and duties of the property owners and common expenses, so that these expenses can be shared and the administration of the development can be regulated. This document must obligatorily be approved before any promissory purchase agreement or final sales agreement for independent fractions of a tourist resort can be entered into.

You must be in possession of the following elements before signing a promissory purchase agreement or final transfer agreement for a fraction or plot in a tourist resort. Contracts are considered null and void if these elements do not exist:

  • a copy of the approved and registered constitutive deed;

  • a copy of the contract that gives the entity operating the tourist resort approval to commercialise the accommodation unit in question;

  • an indication of the value of the scheduled instalment payable by the owner of the fraction or plot in the first year.
Other rules that you should be aware of:
  • The  act of purchasing a fraction or plot in a tourist resort determines that the property will be used for the purposes of tourism (in accordance with the approved designs or the operating licence).

  • A tourist resort can have several property owners. Irrespective of the number of property owners, the tourist resort must be operated by a single entity – the operating entity (entidade exploradora) - responsible for its commercial operation, all functional aspects and the level of service provided.

  • The accommodation units may neither be operated directly by their owners, nor may they be subject to contracts that compromise their use for tourism, specifically rental agreements or contracts that constitute rights of usage or right to reside.

  • It is obligatory to enter into tourism operation contracts, which give the operating entity the approval to commercialise the accommodation units for tourism purposes, regardless of whether the owner uses the property for the entire year, or if they fully or partially transfer it to be operated.

  • Tourism operation contracts must specify the operation conditions of the accommodation units, the property owner's share in the results of the operation of a given unit, as well as the rules for its use.

  • The operating entity is under the obligation to provide the owners of the independent fractions/plots with a deposit for their proper administration and conservation.

  • Accommodation units in tourist resorts are permanently under a tourism operation regime, even if they are occupied by the property owners 365 days per year.

  • Accommodation units must at all times remain furnished and fitted out in perfect conditions to be rented out as tourist accommodation - operating entities must ensure that accommodation units are in this condition, under the terms of tourism operation contracts entered into with the property owners.

  • The operating entity must ensure that all obligatory services of the category awarded to the tourist resort are provided.
What is the scheduled instalment payment and what is it used for?
It is a valuable consideration paid to the operating entity by the property owners of the development to cover the development's maintenance, conservation and operating expenses, under the terms set out in the constitutive deed (título constitutivo). Property owners may enjoy the services that are obligatory as a result of the development's category, the expenses of which are covered by the scheduled instalment payment.
THIS INFORMATION IS NOT INTENDED TO BE A SUBSTITUTE FOR CONSULTING THE APPLICABLE LEGISLATION

Source: Turismo de Portugal
Governo de Portugal
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