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en-The protection of property buyers in Portugal has recently been reinforced by the judicial system.

11/07/2024

The Supreme Court of Justice (STJ) of Portugal issued a significant decision in the field of contract law, specifically on contracts - promises to buy and sell properties. The decision addressed essential issues related to the execution and non-compliance of these contracts, reaffirming the protection of buyers (Process: 3283/17.3T8STR-B.E1.S, Rapporteur: Fernando Baptista).

The case involved buyers who, after failure by the seller, claimed not to have received possession of the properties as agreed in the promissory contract. This resulted in legal action to secure the right to retention and compensation for the damages suffered. 

Right of Retention 

The STJ reiterated that the right of retention is applicable to all third parties, functioning as a real guarantee that persists until the public sale of the property. The decision highlighted that this right extends to the proceeds of the sale, giving buyers preference in payment over other creditors.

Consumer Quality 

The court analyzed the quality of the promising buyers, concluding that, although they are not typical consumers (as the properties were not intended for their own permanent housing), they still had rights due to their position of hyposufficiency resulting from the contract - promise. This interpretation expanded the protection offered to buyers, regardless of the intended use of the property.

Execution of the Contract - Promise 

The decision highlighted the need for an effective delivery to establish possession, emphasizing that a merely symbolic delivery (such as the handing over of keys) is not sufficient to characterize possession. The court required proof of real and continuous possession, rejecting attempts to simulate compliance.


Default and Compensation 

The STJ determined that non-compliance by the promising seller results in a credit equivalent to the value of the properties on the date of default. This credit is protected by the right of retention, allowing prospective buyers to retain the property until their credit is completely satisfied.

This decision represents a significant milestone in Portuguese jurisprudence on promissory contracts, strengthening the position of buyers and providing greater legal certainty. Parties involved in contracts of this nature should consider this decision when assessing the need for legal measures to protect their contractual rights

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