Real Estate Purchase and sale: Promissory Purchase Contract
The process of buying and selling a property is complex and involves some bureaucracy that has to be fulfilled. When the business of buying and selling moves forward there is a Promissory Contract of Purchase and Sale, or also known as CPCV.
This contract establishes the agreement and guarantee of the deal between the two parties involved in the purchase/sale of the house or land. It is essential to understand that the seller and respective buyer are committed to the fulfilment of the deal until the date of the deed of the property designated.
However, the signature of this contract is not mandatory, but being an option it may provide benefits for both parties involved.
The objective to be highlighted in this type of contract will be the preservation of the rights of both the buyer and the seller, who must respect and enforce certain specific requirements to keep the legal validity.
When to proceed with signing a CPCV?
The buying and selling process can be time consuming, from the market analysis, finding a property that meets the needs of each one, until finally finding the house you want, you may need to resort to a credit and its approval may take a long time. In this sense, in order not to lose the business opportunity, you can resort to the conclusion of the Promissory Contract of Purchase and Sale. This is an advantageous method for both parties, as the seller will not lose the deal and the buyer will not let the opportunity to acquire the property slip away.
When a property is still under construction, many times buyers are interested right from the start, and intend to acquire it even before its conclusion. This situation is one of the most common in the signing of the CPCV, because the deed of the same can only be done after the respective property acquires all the habitability licenses, that is, when the work is concluded.
Normally, the execution of this contract involves a monetary value, designated as a down payment, which serves as a guarantee of fulfilment of the respective contract. This amount may vary between 10% and 20% of the property’s total value. Since most of the financial entities only provide up to 80% or 90% of the capital for financing, it is necessary that the buyer ensures the necessary amount for the guarantee.
It is important to note that when signing the promissory contract, according to the Civil Code, both signatures should be recognised, and for this it is important to have a solicitor or lawyer present to recognise them.