If you own property in Portugal and rent it out, you may have come across the issue of maintenance and repairs. No building will remain in perfect condition forever, but if you are not using the property yourself, are you still liable for the property's maintenance? The simple anser is yes: owners are obliged to keep their properties in a good state of repair and maintenance under Portuguese law. Furthermore, if they fail to comply with this responsibility, the municipal council in their area can oblige them to carry out such works. If these are not carried out, the municipality may even take possession of the property in order to carry them out. Today we explain everything, from a legal standpoint, surrounding this topic.
The obligations of property owners and the powers of municipalities
First things first: what are the obligations you have as a property owner, and what powers does the municipality have should you fail to meet your obligations? Simply put, all real estate in Portugal must be kept and maintained in good condition and must undergo conservation works at least once every eight years. That is the law in Portugal. In addition, irrespective of any deadline, the owners must carry out any works that may be necessary for the maintenance of the safety, wholesomeness, and the aesthetic arrangement of the property.
- If the owner does not carry out such maintenance, the municipality can order the execution of the works necessary to correct bad safety or health conditions or the conservation works necessary to improve the aesthetic arrangement. Likewise, in cases where buildings are falling apart, or if they suppose a danger to public health and people's safety, their demolition can be ordered.
- If a building or fraction of a building is assigned a diminished maintenance level, the municipality can impose on the owner the obligation to rehabilitate it. In this case the municipality determines the works needed, and the deadline for the conclusion of these necessary works, always taking into consideration criteria of necessity, adequacy and proportionality.
The risks of non-compliance
If an imposition such as this occurs, the owner will of course be notified, and the order will be registered with the land registry. This ensures due publicity of the municipal decision and the consequent limitation on the free transfer of properties.
If the owner does not comply with the obligation to rehabilitate the property, does not initiate the urbanistic operations determined by the municipality, or does not complete the urbanistic operations within the established deadlines, the municipal council can take administrative possession of the buildings and immediately execute the determined works.
Who bears the cost of the works?
- The cost of the works and all the amounts relating to the expenses incurred by the municipality as a result of the execution of the works - including the costs of rehousing the tenants, as well as any indemnities or penalties that the municipality has to pay - are to be borne by the owner.
- If the owner does not have the financial capacity or does not wish to make the payment in cash, the owner may propose other ways of extinguishing the debt. This may include through payment in kind, on the basis of a performance bond, or even through the consignment of income from the property.
- The timely settlement of the debt resulting from coercive works carried out by the municipal council is essential. If the debt is not settled the amounts may be collected judicially in a tax execution procedure.
- As an alternative to the judicial collection of the debt in a tax execution procedure, and in accordance with a judgment of proportionality, the municipal council may opt for compensation through forced lease. In these situations, the municipal council rents the property through a competitive bidding procedure or through the application of municipal regulations for the allocation of dwellings. The rental payments made by the tenants will be applied to the debt, subject to the provisions of the law on deposit consignation.
- The municipal council will proceed with the annual rendering of accounts, updating the corresponding amount in debt and notifying the owner thereof.
If the owner is interested in regaining possession of the property they must state this intention in writing and, if there are any outstanding amounts still to be paid, the written communication must be accompanied by proof of full payment.
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