Simplex Portugal: Paradigm shifts and the increased need for legal support in real estate

Throughout 2024, the Portuguese government has implemented a legal package named Simplex. It includes measures to overcome challenges related to a lack of housing and simplifying urban planning and licensing, in line with a “zero licensing” philosophy.

It is a common complaint in the real estate market in Portugal that licensing was inherently slow and complicated. One of the results of this was uncertainty as to when construction could start and how long it would take to gain approvals, say the Ecovis experts on the need to introduce Simplex.

The changes introduced with Simplex aim to simplify and speed up procedures, either by eliminating or softening legal requirements for assessing projects, or by eliminating the intervention of licensing bodies. In Portugal, urban licensing and planning is mostly a competence of the municipalities, which are now also obliged to use a standardised electronic platform for planning procedures.

The two paradigm shifts in the Simplex legislative package

The major change with Simplex is the removal of the control of urban licensing from a phase prior to the execution (prior control) to the moment of execution or even completion.

With Simplex, developers can, in some cases, prepare all the project documents, together with statements from the authors assuming responsibility for their work, submit that package to the municipality, pay the taxes due, and simply start construction. Prior validation by public entities has simply been removed.

Seek advice on real estate transactions, because building regulations have not become any easier.

Gonçalo Areia, Managing Partner, RBMS – Member of ECOVIS International, Lisbon, Portugal

On the transactional side of the real estate market, Simplex has also eliminated the need to present usage licensing documentation at the time of closing a deal, creating another paradigm shift in the responsibility for the legality of constructions. The absence of a requirement for sellers to provide these documents during closing streamlines the transactional side but puts more responsibility on the side of the buyer for the legality of the construction being purchased.

Demand for advice for those wishing to build is increasing

All these measures increase the need for holistic support in real estate. On the one hand, this means strong legal and technical knowledge to support real estate developers through the construction phase (safeguarding compatibility of projects with zoning regulations). On the other hand, it is important to provide support on the pre-contractual and transactional side of real estate, with proper due diligence on the legality of the property and full lawfulness of the transaction, before irreversible financial commitments are made.

For further information please contact:

Gonçalo Areia, Managing Partner, RBMS – Member of ECOVIS International, Lisbon, Portugal
Email: goncalo.areia@rbms.pt