Urban title becomes a key piece in the purchase of a house

• Selling a house without revealing whether it has a license becomes grounds for canceling the deal.
• The Chambers are prohibited from charging fees without legal basis to those who build, and nullify fees that have no legal basis.
• The bonds that developers pay to guarantee works in allotments can now be paid in a phased manner, relieving financial pressure.

Anyone who buys, sells, builds or invests in housing in Portugal will have to deal with new rules from September. The Government published this Friday a diploma that rewrites a significant part of the Legal Regime for Urbanization and Building (RJUE) with the aim of "aligning with the urgency of creating the necessary offer to satisfy the fundamental right of all to housing."

Among others, the diploma touches on three fronts with a direct impact on the market: municipal fees on new construction, transparency in deeds and the rules of allotments.

"This measure increases the transparency of real estate transactions and ensures that citizens have essential information before making one of the most important financial decisions of their lives," says the Order of Notaries in a statement.

The omission of the mention of the existence or not of the urban title of the property makes the transaction voidable, which means that the contract produces effects but can be challenged by any of the parties.

But the decree-law goes further than a simple declaratory obligation. The diploma distinguishes three concrete scenarios: the transferor presents the title and it is mentioned; the transferor declares to have it but does not exhibit it in the act; or the transferor expressly declares that he does not have an urban title. In either case, the omission of the mention makes the transaction voidable, which means that the contract produces effects but can be challenged by either party.

The diploma also redefines the very concept of urban title. A license is now titled, for all legal purposes, by the last application duly completed with the summary of the urban operation, accompanied by proof of payment of fees and notification of approval or, in case of tacit approval, proof of submission.

It means that the simple proof of self-assessment of fees is no longer sufficient to title a transaction, something that the diploma itself justifies with the "insufficiency of the information contained therein" to ensure legal certainty before third parties.

Prior communication follows a similar logic. It is entitled by the duly completed form, by the proof of submission and, when there is an inspection, by the declaration of conformity issued by the Chamber. In operations subject to assignments (frequent cases in new construction) the title also includes proof of the assignments made. A condition that, in practice, makes the process more demanding for the developer, but also more transparent for the final buyer.

There is also a novelty with a direct impact on land registries. Allotment operations are now mandatory to be registered in the land registry of the buildings covered, and the City Council is obliged to communicate to the registry office all acts declaring invalidity, expiry or revocation of licenses or prior communications related to allotments. In other words, anyone who consults the land registry certificate of a land covered by allotment will have access to a more reliable photograph of the legal status of the property.

The title of use (the authorization to use a building or fraction) is automatically transmitted with the property, without the need for any additional formality. This standard aims to eliminate a common misconception in the market, where sellers and buyers sometimes confused the need to renew or transfer this document in second-hand transactions.

According to the diploma, the obligation to mention the urban title in any transfer of real estate comes into force "on the first working day of the third month following its publication on the first working day of the third month following its publication", which will be on September 1st. From that date, notaries, registrars, lawyers and solicitors are immediately bound by the new obligation, without any additional adjustment period.

"Wild rates" of municipalities now have a limit

For years, the unpredictability of municipal fees has been one of the biggest obstacles to the construction of new housing in Portugal, according to developers and professionals in the sector. In some municipalities, the amounts charged by the Chambers as concessions for equipment or green spaces represented a significant slice of the total cost of development, and this charge always ended up being reflected in the final price of the houses.

The diploma published this Friday now imposes a limit on these fees, with municipalities being required to establish, in their regulations, "the amounts of the fees to be charged, as well as the value or formula for calculating the deposit to guarantee the work and urban compensation".

In addition, municipal regulations now have express prohibitions. The Chambers cannot, for example, require the delivery of documents that are not provided for in a Government ordinance , create procedural rules that go beyond what the law allows, or set fees without legal basis. Whoever does so, sees these rules declared null and void. That is, if a Chamber approves a regulation that charges fees without legal basis, requires documents not provided for by law, or creates procedural rules beyond what the legislation allows, those rules have no legal value and cannot be applied. It's as if they didn't exist.

The practical impact of this rule depends, however, on municipalities reviewing their regulations within the deadlines provided, something that does not always happen with the desired speed. But from now on, a prosecutor who is faced with an illegal fee has, for the first time, a solid legal basis to challenge it in court.

Unlike the rule of transparency in deeds, municipal fees in new construction have a longer schedule, as they formally enter into force on the same date, but the nullity of these rules only takes full effect as municipalities review and adapt their regulations. The diploma does not set a maximum deadline for this review, which means that the effective change on the ground may take time, depending on the speed of each municipality.

The decree-law also changes the rules of allotments, the instrument that allows large plots of land to be transformed into sets of lots where housing is built, aiming to lower the cost of construction.

• The first amendment resolves an old blockage: the guarantees that developers have to provide to the Chambers to guarantee the construction of the infrastructures of a subdivision (streets, water networks, sewers) can now be constituted in a phased manner and proportional to the effective pace of urbanization. Until now, the guarantee had to be provided in full from the beginning, which made many projects unfeasible due to the lack of immediate financial capacity of the promoters.
• The second change has a more direct social reach. In allotments with lots intended for public housing, controlled costs or for affordable rent, the developer can now choose to build that housing on their own land instead of ceding the lot to the municipality. The diploma states that this allocation "can either result in the transfer to the private domain of the municipality, or it can be ensured in private property to be promoted by the subdivider". In theory, it means more affordable housing supply and faster, without depending on the constructive capacity of municipalities.

The rules of the allotments also follow the general rule of entry into force 90 days after publication. The same applies to the mandatory registration of land subdivision operations in the land registry and to the obligation for the councils to notify the registry offices of any invalidity, expiry or revocation of licences associated with land subdivisions.

_{(News updated at 17:44 pm with a quote from the Order of Notaries)}

_{https://eco.sapo.pt/2026/05/29/titulo-urbanistico-torna-se-peca-chave-na-compra-de-casa/}