[BUYING AND SELLING REAL ESTATE IN PORTUGAL]
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The purchaser must report the defect or flaw to the real estate seller or property builder within one year from the date of detection of the defect (always within the warranty periods referred to above). The problems that have arisen during this period cannot be the result of bad use by the purchaser. There may be warranties with distinct deadlines when a conventional warranty is stipulated between the parties and is expressly stated in the sale and purchase agreement. This legal warranty can also be refused by both parties, specifically if they agree to sell the property “as it is” at the moment of the sale. IV.2. SPECIAL PURPOSE VEHICLE (INDIRECT ACQUISITION) The second form of real estate investment is the indirect acquisition of property, via a special purpose vehicle, previously incorporated, or acquired, for such purpose. This procedure requires the compliance of
as commercial companies (usually joint- stock and limited liability companies) and undertakings for collective investment of a contractual nature or of a corporate nature. IV.2.3. SALES GUARANTEES In special purpose vehicles acquisitions, it is common practice for the seller to accept liability for a specific length of time for any infringement of its representations and warranties on the object of the sale and underlying assets. V. TYPES OF SPECIAL PURPOSE VEHICLES It is standard practice in Portugal to make real estate investments through one of these three vehicles which, in other words, represent the process of a special purpose vehicle acquisition deal: (i) commercial companies, (ii) real estate investment funds and, (iii) real estate investment companies. V.1. COMMERCIAL COMPANIES Joint-stock companies as well as limited liability companies are on the Portuguese frontline, representing most of the existing national commercial entities. V.1.1. LIMITED LIABILITY COMPANIES BY SHARES (PLC) In a PLC, share capital is divided up into shares, with a minimum initial amount of €50.000,00, and must, only at the moment of its incorporation, have a minimum of five shareholders, unless it is incorporated by another company as its sole shareholder. Also, only two founding shareholders are required when the State, or a State holding company, owns more than 50% of the capital stock. After the incorporation, restrictions to the minimum number of shareholders no longer apply.
some steps, as follows: IV.2.1. DUE DILIGENCE
As in direct acquisition deals, in indirect acquisition deals it’s also recommended the commission of a due diligence procedure by the purchaser, in order to i.) verify the property’s legal status, as detailed above, and to ii.) analyze the investment vehicle’s commercial, financial, tax, corporate and legal status, ensuring the legal acquisition of equity stakes as well as that no undesired obligations or rights are dragged along with the entity to be used as vehicle. IV.2.2. SHARE DEAL This process involves the acquisition of equity stakes in investment vehicles, such
ILN Real Estate Group – Buying and Selling Real Estate Series
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