The real right to durable housing

Decree-Law No. 1/2020, of January 9th, which establishes the legal regime applicable to the real right to durable housing.

On January 9th, 2020, was published in the Portuguese Official Gazette the Decree-Law No. 1/2020, which establishes the legal regime applicable to the real right to durable housing (hereafter “DHD”), which allows one or more persons to reside permanently and for life in an extraneous dwelling by paying the owner an initial deposit and periodic instalments.

The regime provided in said Decree-Law No. 1/2020 aims to constitute an alternative to purchase of own or leased housing solutions, with the main purpose to allow the reconciliation of stability and security conditions of housing for families alongside with conditions of flexibility and mobility.

The owner (singular or legal person, public or private) constitutes DHD in favor of one or more residents, provided that the housing is free of charge and liabilities and presents a medium minimum conservation level.

The contract is executed by public deed or private document, in which the signatures of the parties are recognized in person. In addition to this formality, the constitution of the DHD is subject to registration at the Land Registry Office, which must be requested by the resident within 30 (thirty) days from the date of the conclusion of the contract, and shall indicate its lifetime duration.

The resident has the obligation to pay the owner an initial deposit, which can be returned, in part or in full, if the resident waives the DHD during the first 30 (thirty) years of residence in the dwelling. Moreover, the resident must pay to the owner a monthly pecuniary charge, whose amount is freely established by the parties in the contract, as well as an annual pecuniary charge, due for each year from the eleventh until the thirtieth year, corresponding to 5% of the initial deposit and paid through deduction of the deposit.

DHD may be terminated by: (i) resignation of the resident, at any given time, with a minimum advance of at least 90 days prior to the date of delivery of the dwelling; (ii) death of the resident (or the last resident, if the contract is in favor of more than one person); or (iii) definitive non-compliance by either party.
It should be noted that DHD is not transmissible in case of death of the resident, and the only possible transfer is in case of execution of the mortgage that may be made on DHD as a guarantee of the credit that is granted to the resident as payment, partial or full, of the value of the deposit.

The legal diploma under consideration also foresees that the owner can freely transmit the dwelling burdened with DHD to third parties, free of charge or with a pecuniary amount associated, but this transmission cannot give rise to any other rights or real estate guarantees over the same dwelling, with the exception of the mortgage. The transmission to third parties of dwelling burdened with DHD does not affect the validity of the DHD.

To access the full text of Decree-Law No. 1/2020 of January 9th, please click here.