February 2011


43.11.2 Law applicable to dealing with properties in Portugal as assets of the bankruptcy estate

The EC Regulation on Insolvency Proceedings 2000 (‘the Regulation’) (see Chapter 41) generally provides that the law applicable to the bankruptcy is that of the Member State in which the bankruptcy order was made [note 1] (see paragraph 41.51). 

There are exceptions to this general rule, which exceptions include special provisions in the case of property.  In particular, the opening of the proceedings does not affect third parties’ ‘rights in rem’ to the property.  ‘Rights in rem’ are the rights of a creditor or third party in respect of assets belonging to the debtor which are situated in another Member State at the time of the opening of the proceedings (see paragraph 43.11.3) [note 2].


43.11.3 Protection of the rights of chargeholders

As outlined at paragraph 43.11.2, the Regulation provides that ‘rights in rem’ are subject to an exception to the general rule regarding choice of law.

Broadly speaking, ‘rights in rem’ include security rights such as a mortgage, and the Regulation provides that it is the law of the country in which the property subject to security that would take precedence when considering the effect of the proceedings on those rights.

To comply with the Regulation, the official receiver, in his/her capacity as trustee of the bankrupt’s estate, will have to follow Portuguese law when dealing with the rights of chargeholders. 


43.11.4 Properties in Portugal as assets of the bankruptcy estate

The Act provides that property, wherever situated in the world, forms part of the bankruptcy estate [note 3] [note 4], and the Act gives the trustee a power of sale over the property [note 5].

It is clear, therefore, that property in Portugal belonging to the bankrupt would form part of the bankrupt’s estate and should be realised as appropriate, following the guidance in this Part.


43.11.5 Ensure that value of property justifies action taken to protect/realise

As with any other property, the official receiver, as trustee,  should ensure that the value of the property to the estate justifies any action taken, or expense incurred, in relation to the protection or realisation of the property.

It is accepted that this may be something of a circular matter, in that it may be necessary to incur some expense to find out that the property has no value.


43.11.6 Ascertaining the value to the estate of a property in Portugal

In simple terms, the calculation of the value of a Portuguese property to the estate involves the same process as would be required for a property in England and Wales (that is, the value of the property less any secured charges).  What may be more difficult is the obtaining of accurate information regarding the value of the property and the amount and level of any outstanding charges.


43.11.7 Obtaining information regarding the value of a property in Portugal from the bankrupt

The most likely source of information regarding the value of the property will be from the information or documentation provided by the bankrupt, for example: 

  • Estimates of the value of the property made in the preliminary questionnaire or interview.
  • Documentation showing the purchase price.
  • Valuations provided during any re-mortgage process.


43.11.8 Other sources of information regarding the value of a property in Portugal

As in the UK, there are websites that give the prices of properties that are for sale and examples are given here:

It is possible that a local estate agent may be prepared to offer an opinion.  An agent may be located by region on the following website:


43.11.9 Where accurate valuation of property is necessary

Where it is necessary to obtain an accurate value of the property the official receiver, as trustee,  may consider appointing the Portuguese equivalent of a surveyor.  As this service is likely to attract a fee the official receiver should consider the necessity of the valuation against the likely benefit to the estate.  A surveyor may be located on the following website:


43.11.10 Establishing the position of charges against the property

It is likely that, as with a UK property, the official receiver, as trustee, will be able to establish what charges there are against the property from documentation or information provided by the bankrupt.

Assuming the identity of at least one of the secured chargeholders is known, a letter can be sent in the normal way (see paragraph 43.11.12) to obtain details of the amount outstanding under the charge and the identity of any other chargeholders.  Such an approach should be accompanied by a completed data protection act disclosure authority signed by the bankrupt (see paragraph 43.11.23) to avoid any refusal to provide information under jurisdictional differences.


43.11.11 Protecting the official receiver’s interest in the property

In the first instance, the official receiver, should contact any chargeholder and request that they note the official receiver’s interest in the property (see paragraph 43.11.12). 

In addition to informing the chargeholders of the making of the bankruptcy order, it will be necessary to register the official receiver’s interest in the property at the land register office (see paragraph 43.11.13).


43.11.12 Contacting the chargeholder

Annex 1 is an MP2 letter (seeking information from a chargeholder) that has been amended to be more relevant in respect of a Portuguese property.

Annex 2 is an MP3 letter (requesting the chargeholder to note the official receiver’s interest in the property) that has been amended to be more specific in respect of a Portuguese property.

Annexes 3 and 4 are, respectively, English language versions of Annexes 1 and 2. 


43.11.13 Protecting the property at the land registry

The official receiver, as trustee,  should take steps to ensure that his/her interest in the property is recorded at the Portuguese national land registry (see paragraph 43.11.14).  This will stop any unauthorised dealings in the property.

He/she can achieve this by registering a notice with the land registry (see paragraph 43.11.14) that bankruptcy proceedings in England and Wales have commenced.  This is provided for in the EC Regulation [note 6].  The registrar may charge a fee for registration.   

Annex 5 is a letter that official receivers may use to effect such registration.  Annex 6 is an English translation of Annex 5.  The letter at Annex 5 should be accompanied by a legalised original of the bankruptcy order (see paragraph 43.0.49), which should also be translated into Portuguese (see paragraph 32.3.39).


43.11.14 Registration of property at the land registry

Portugal is divided in to 18 Districts (‘Districtos’) on the mainland, plus another two off-shore districts, the Azores and Madeira.  These 20 districts are further subdivided in to Municipalities, and each region/district has its own Land Registry (‘Conservatória do Registo Predial’).  In order to deal with a property interest in Portugal it will be necessary  to establish into which area the property falls, so that the relevant Land Registry can be searched (see paragraph 43.11.15).


43.11.15 Searching the land register

The location of the correct land registry may be established by reference to the document attached to the following website:

It is suggested that the official receiver write to the relevant land registry to request a search, using the letter attached at Annex 7.  An English translation of Annex 7 is attached as Annex 8. It is not know whether a fee is payable to search the Portuguese land register.  If official receivers encounter any difficulties in this area they may seek the assistance of Technical Section.


43.11.16 Realising the interest in the property – transfer to the RTLU

As with a property in England and Wales, the official receiver may seek to transfer dealings in relation to the property to the appropriate RTLU as soon as possible after his/her interest in the property has been protected (see paragraph 43.11.11).


43.11.17 Realising the interest in the property

As outlined in paragraph 43.11.4, the Act gives the official receiver, as trustee, the power to take possession of and sell a property that forms part of a bankrupt’s estate.  Under the provisions of the Regulation [note 7] [note 8] the official receiver must have respect for domestic (Portuguese) law when taking steps to realise the interest in the property.  In particular, he/she must follow rules in Portuguese law when taking steps to realise the interest in the property.  In particular, he/she must follow rules in Portuguese law in regards to the conveyance of the property (see paragraph 43.11.18).

It is not expected that the official receiver, as trustee, should enter into such a procedure without expert guidance from a lawyer (probably based in Portugal) well versed in Portuguese law (see paragraph 43.11.21).


43.11.18 Procedure for conveyance

The first stage in the conveyancing process is for the purchaser and vendor to agree a pre-sales contract (‘Contrato de Promessa de Compra e Venda’).  This contact is binding in law and is usually backed by a deposit of 10% of the sale price.  If the purchaser subsequently backs out of the contract he/she will lose his/her deposit.  If the seller pulls out, he/she must return the deposit and, additionally, pay a sum equal to the deposit to the purchaser.   

Once the pre-sales contact has been agreed, and the deposit paid, the conveyance proceeds to the next stage, which is completion – the signing of the deeds (‘escritura).


43.11.19 Signing of the deed of sale

It is not expected that the official receiver, as trustee, would be required to travel to Portugal to undertake this procedure.  Instead, it is envisaged that the local legal representation (see paragraph 43.11.21) would deal with this part of the process.  For this to happen, the local representation would need to be given a power of attorney (‘Procuração Publica’).  The local representation should be requested to lead the official receiver in this process.


43.11.20 Notary

The notary (‘Notário’) is a government appointed official whose role it is to oversee the property conveyancing process.  He/she does not act for either side and is interested to see that the sale proceeds in line with the process set down by the law of Portugal.  He/she also has a role in checking the property for outstanding charges or other matters affecting title.


43.11.21 Instructing a local solicitor

It is not envisaged that the official receiver should attempt to deal with the sale of a property in Portugal directly, and it is recommended that local legal representation is obtained to deal with the particular aspects of Portuguese conveyancing and insolvency procedures – not least the need to be personally present at the signing of sales contracts (see paragraph 43.11.19).


43.11.22 Locating a solicitor in Portugal

Solicitors engaged by the official receiver, as trustee, in this country may be able to recommend a solicitor in Portugal with whom they have some connection or arrangement.

The website of the Law Society has a database of lawyers that may be searched by location and specialism:

Alternatively, the British Consulates in Portugal may be able to recommend a solicitor (


43.11.23 Data protection

It may be the case that any Portuguese organisation from whom the official receiver seeks information will cite data protection as a reason for not providing the requested information.

In this case, the official receiver should have the bankrupt complete the data protection subject access form (attached at Annex 9) and send that to the relevant organisation with a renewed request.

Information regarding Portuguese data protection law may be found at the website:


43.11.24 Disclaiming the property

The official receiver, as trustee, may issue a disclaimer of the property, but only if the property has some onerous obligation attached to it (such as an obligation to repair, maintain, make safe, insure for public liability or make secure) and, as a result, has no value to the estate.

Obligations that the official receiver may typically encounter when dealing with a Portuguese property include the obligation to pay service charges, maintenance charges, community charges, or similar – which may attach to the property.

Annex 10 is a document, in Portuguese, which explains the purpose and effect of a disclaimer and which should be included with the notice of disclaimer when served on the interested parties. Annex 11 is an English translation of Annex 10.

See Chapter 34 for advice regarding the process of disclaiming.


43.11.25 Timeshares

Timeshares are dealt with in detail in paragraphs 31.3.52 to 31.3.55 and the Case Help Manual part Timeshares.  In short, the basic principle for dealing with a timeshare is that it should be valued (using the services of one of the companies whose details are given in the Case Help Manual part, or a company providing similar services), taking into account any outstanding finance or service charges, and realised as appropriate.


43.11.26 Abandoning the property (amended July 2013)

Where there is no prospect of the property achieving equity sufficient to make realisation worthwhile, the official receiver, as trustee, may cease to take any active steps in dealing with the property – effectively, ‘abandoning’ the property to the mortgagees.  Where the property’s value is affected by some onerous obligation (to insure or make the property safe, for example) a disclaimer would be the more appropriate course of action (see paragraph 43.11.24).

Where this position is apparent prior to the process of registering his/her interest at the Land Registry (see paragraph 43.11.11), the official receiver may discontinue that process.  The official receiver should, though, ensure that his/her interest in noted by the mortgagees in the event of a surplus arising.