In Portugal, the building code of each Municipality is specified in the town and country planning instruments, notably, the general plan (Plano Director Municipal), the master plans (Planos de Urbanização) and the (more detailed) detail plans (Planos de Pormenor).
The development of a real estate property may entail several types of urbanistic operations, which must always abide by the applicable town and country planning instruments, including but not limited to (i) plotting ("loteamento"), (ii) infrastructure works ("obras de urbanização") and (iii) construction works ("obras de construção"), each of these operations requiring the respective administrative approval (being that plotting and infrastructure works are normally encompassed within the same procedure).
The administrative approval of the urbanistic operations referred above, may follow several approval procedures as detailed below.
Prior to filing a licensing request, it is possible, although not mandatory, to file a previous information request ("PIP") in order to obtain further certitude regarding the feasibility of the intended project.
A PIP consists of a request addressed to the competent Municipality, asking for the same to pronounce on the possibility of executing a certain project under the applicable town and country planning instruments.
When a Municipality issues a favourable decision, the PIP becomes binding to the Municipality, to the extent that, if a licensing abiding by the exact same terms under which the PIP was approved is filed within one year counted as of the approval of the PIP, the Municipality is bound to approve it. The Municipality may also extend the PIP for an additional period of one year, upon request.
According to the law, the conclusion of a PIP procedure should take 40 to 50 days (including the consultation of External Entities). However, in practical terms and according to our experience, said conclusion may take 3 to 6 months (or more, depending on the complexity of the project and depending on the Municipality in question). In any case, deadlines may vary from Municipality to Municipality and, therefore, confirmation of each Municipalities practise is recommended.
Construction License and Previous Communication
The applicable law currently foresees two types of administrative procedure entitling the execution of urbanistic operations (including: plotting and infrastructuring, construction of new buildings and modification of existing buildings):
The License procedure is the standard procedure applicable whenever the law does not establish specifically that the operation in question may be exempted of such procedure or subject to the mere Previous Communication.
According to the law the conclusion of a licensing procedure should take about 3 months (including the consultation of external entities) to be concluded. However, in practical terms and according to our experience, said conclusion may take 12 to 24 months (or more depending on the complexity of the project and depending on the Municipality in question). In any case, deadlines may vary from Municipality to Municipality and, therefore, confirmation of each Municipalities practise is recommended.
- Previous Communication (which consists of a mere prior communication to the Municipality before initiating the urbanistic operation):
The specific situations where a Previous Communication is admissible by law, are situations in respect of which the degree of control by the Municipality may be lower.
Notably, the Previous Communication is allowed in situations where the parameters and requisites applicable to the urbanistic operation were previously established and approved by the Municipality with a high degree of detail (e.g. infrastructing or construction in areas covered by a plotting approval or by a detail plan, works in consolidated urban areas compliant with the Municipal plans and that do not exceed certain limits, or works complying with the exact terms of a PIP that has been approved).
The Previous Communication is filed with declarations signed by the architects and technicians responsible for the technical projects attesting that the urbanistic operation fully complies with the applicable rules, such declaration implying personal liability from the signatories.
Although the Previous Communication is foreseen in law as a mere communication upon which the developer may almost immediately start the works, the practise is often different because upon submitting the Previous Communication, Municipalities may require additional information to validate the admissibility of the Previous Communication or review the projects and make enquiries, which in practise may imply additional delay, rather than being immediate. Therefore, confirmation of each Municipalities practise is recommended.
Municipal Use Permit
In Portugal, the use of any real estate asset is generally subject to obtaining a Municipal Use Permit, which is the document that attest that a certain construction was built in accordance with the approved construction license and states the respective authorized use.
The existence of an appropriate valid Municipal Use Permit in respect of each property is also a requirement for the execution of any agreements implying the transfer of any such properties (asset deal).
The need for Municipal Use Permit is exempted for constructions built before Decree-Law no. 38 382, dated of August 7, 1951, came into force in the respective Municipality.