Promissory Contract

Before the public Deed of Purchase and Sale is signed before a Notary, a promissory contract (Contracto de Promessa de compra e venda) is drawn up and signed by the vendor and the purchaser. This contract secures the deal and ensures that the final Deed of Purchase and Sale is done.

The final Deed is usually a simple document which includes the price, identification of the vendor and purchaser, identification of the property. Any special conditions of the deal such as terms of payment, or works that must be carried out in the property are usually recorded in the Promissory Contract.

A deposit is paid on signing of the promissory contract, although it is not compulsory by law, it is normal to pay 10% of the purchase price at this stage.

If the Vendor defaults on the contract, the purchaser has the right to ask for double the deposit to be returned unless the contract deems otherwise.

If the Purchaser defaults on the contract, the vendor is entitled to keep the deposit.

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