“This decree-law reinforces the mortgage in the face of the right of retention, which, to date, has absolutely prevailed over the first”, reads the diploma, framed within the scope of a measure introduced in the Recovery and Resilience (PRR) to meet disbursement targets.

In practice, and as ECO explains, the change in law removes the right of those who signed the purchase and sale promise contract (CPCV) to be compensated in the first place for the deposit they gave for the house.

However, the buyer will be paid before the bank if they have “incurred expenses on the property with a view to preserving it or increasing its value”, as the document explains.

According to Paulo Valério, president of the Portuguese Association of Insolvency and Recovery Law (APDIR), cited by the publication, with the new law, “there is a risk that the promisor-buyers will be harmed more because first the banks will receive the payment and only then will they have right to recover the deposit in double the amount”.