Office Dr. Rathenau & Colleagues: Portuguese Property Law 2016

Power of Attorney

A power of attorney (procuração), also referred to as power of representation, is the right and the power to act on behalf of another person. Such a power is transferred by a legal act and is constituted by the mere declaration of the client. Legally there is a difference between the internal authorisation of the attorney and the client on the one hand and the external authorisation (attorney or any other empowered party - third party) on the other, i.e. between the attorney's legal power to bind the client and what his client has allowed him to do with that power. Usually, the attorney's power external competences is more far-reaching than what the client has actually asked and allowed him to do.

Contracting parties can be represented by any other person when concluding real estate contracts or carrying out any other legal act. To prevent abuses of the consented power regarding the external relationship, you should entrust a lawyer with the representation. It is by definition the job of a lawyer to protect his client's interests.

In Portugal the power of attorney is subject to special formal requirements. The form required for the power of attorney is usually the same form as the one required for the transaction for which the power is conferred.

For example: If the power of attorney is issued for the acquisition of a real estate it has to comply with the same formal requirements as the acquisition contract that is to be concluded at the end of the transaction. A real estate contract has to be authenticated in order to be valid. In Portugal a lawyer is entitled to authenticate such contracts. Therefore, the lawyer can authenticate the power of attorney as well. Thus, your lawyer can ensure the compliance with all formal requirements.

If the client is abroad and unable to be present in Portugal during the transaction in Portugal the power of attorney can be issued abroad as well.  There are two possibilities: the document can be authenticated by the Portuguese consulate or by any notary. In the first case the client will sign the power of attorney written in Portuguese in front of an official of the consulate and then it will be authenticated. In the second case the same procedure will take place in front of the notary. According to the Hague convention of October 5th 1961, the authentication by a notary has to be apostilled afterwards. After the whole procedure, the document, the authentication and the apostille will be translated into Portuguese. This will be done in Portugal according to the legal framework.

A power of attorney for the acquisition or the sale of real estate can be conferred in general terms (e.g. "the power to buy real estate in Portugal"). Whereas the power of attorney to carry out a donation has to be very specific as to the subject of the donation.

Usually a power of attorney will include the right to delegate authority. Thus, the attorney will be able to delegate his power to conclude the transaction if he is unable to do so himself (e.g. in case of an illness). It is also possible that the attorney represents both parties at the transaction. In this case the power of attorney has to state explicitly that he can conclude contracts "with himself".

Generally, each conferred power of attorney is revocable, but at property sales the parties often agree on an irrevocable authority. This is especially the case when the owner of a property does not yet have all the required documents for the transaction. Then the owner can issue an irrevocable power of attorney for the "buyer" and in this way secure the transaction for the other party. This power of attorney allows the lawyer to request the missing documents from the authorities and to "sell" the property  to the buyer for a determined price. Upon issuing such a power of attorney the vendor already receives the entire price for the property. According to the applicable law the tax on acquisition of real estate has to be paid before issuing such a power of attorney. Thus, in this case the tax is paid before ownership is transferred. The power of attorney assures that the subsequent transaction will take place. Nevertheless, such a transaction does comprise a danger: the issuing of the power of attorney cannot be registered in the land register. 

Of particular interest is the fact that in Portugal it is possible to marry without being present. One of the engaged couple can always be represented. An empowered person can get married for you, that is, act on your behalf during the ceremony. This wedding is referred to as marriage by proxy. In this case, the right of representation is of course restricted to the actual act of marriage. The proxy is not authorized to choose the spouse.

The spouses can also empower a person for the divorce.