The news of the Housing Law

The news of the Housing Law

Last October 1st, the Lei de Bases da Habitação (Housing Law) published on September the 3rd, came into force. The main purpose of this law is to lay the foundations of the right to housing and the responsibilities of the state to make this right effective for all citizens.

In April 2018, the first bill on this subject, by Mrs Helena Roseta, was delivered to the parliament, and after public discussion, opinions, debates and various hearings, the first Housing came into force in Portugal. All of these steps in the legislative process can be analyzed in detail here.

Of the various measures that make up Law 83/2019, the following points stand out:

• The "State is the guarantor of the right to housing" can be read in the general principles of the Law, so the State is charged with promoting the effective use of vacant public housing, while also encouraging the effective use of privately owned housing, especially in central areas.  It should also place public real estate in rental programs, encouraging access to housing with incomes compatible with household incomes.
• The decree stipulates that the state, autonomous regions and local authorities cannot promote the eviction of vulnerable individuals or families without previously providing resettlement alternatives and cannot be carried out during the night. There are also a number of other concerns in eviction situations, as can be seen from reading Article 13 of the law.
• The law provides for the creation of the Programa Nacional de Habitação - PNH (National Housing Program) which aims to establish the objectives, priorities, programs and measures of the national housing policy. It is described as a multi-annual, progressive and dynamic document. The public entity responsible for monitoring the above program has the responsibility to prepare the Relatório Anual de Habitação (annual housing report), which not only assesses compliance with the PNH, but also reports on annual public appropriations and implementation rates and makes proposals and recommendations for the future. There is now a Conselho Nacional de Habitação (National Housing Council), which is a consultative body of the Government in the area of ​​national housing policy and which has among its competences to issue an opinion on the NPH proposal and on the Annual Housing Report.
• Public financial support becomes available for: Public programs promoting rehabilitation, energy efficiency or seismic resilience; in the acquisition of primary residence; in the maintenance and conservation of real estate and finally the housing cooperatives, self-building and housing associations. (see Article 30).
• In the area of ​​subsidization, this Law provides for the granting of subsidies to citizens who are unable to access the private housing market, and there are now 5 different types of subsidies, as evidenced in article 31 of the law under review. 
• In order to comply with housing policies, there is an incentive for building rehabilitation and urban regeneration. Urban rehabilitation must include conditions of energy efficiency, seismic vulnerability and accessibility. Public rehabilitation and building programs should promote sustainable construction, favoring the local economy, using materials available locally. (see Article 36)
• For the public rental promotion, and in accordance with article 42 of the law in question, the state has to guarantee the described income schemes. The state, autonomous regions and municipalities can now put part of their assets in the service of public housing programs and may also develop cost-effective housing programs to be established with the private or cooperative sector.
• For the private rental market, the state is expected to create conditions of security, stability and trust through the creation of income insurance and rights protection programs for both landlords and tenants, as can be seen in the Article 44 of the basic housing law.
• With regard to Mortgage Loans, property will be handed over to the bank if payments are not being made, provided that it is stated in the signed contract. In the case of debtors in a difficult economic situation, a protection regime may be applied, including possible debt restructuring, repayment in kind or substitutionary measures for foreclosure. With regard to guarantors, the credit repayment terms may not be more unfavorable (see Article 47).
• One of the central points of debate during the legislative process was the effective use of housing, namely the issue of private vacant buildings, which was eventually published in a law that the state promotes the effective use of publicly owned vacant dwellings and encourages the effective use of privately owned vacant dwellings, particularly in central areas. In the case of private buildings, the law dictates that dwellings that are unjustifiably and continuously without effective housing for reasons attributable to the owner are considered vacant and owners subject to sanctions.

It was at this last point that we went to a REMAX commercial in Lisbon, Paulo Lopes, and we wanted to know if the new vacant building laws were already having an impact on the real estate market.

According to Paulo Lopes, in Portugal there are many varied assets in conditions of abandonment and in a vacant state, in need of intervention, for various reasons. On the one hand we have the owners who are a set of heirs who do not understand each other, the owners who have no interest and the owners who do not have the capital to recover the property but do not want to dispose of it. On the other hand we have the unknown owner, the owner that has passed away, had no direct heirs and no records since, and it is difficult to find out who owns the property. All this makes it difficult and sometimes impossible to sell the property.

Thus, with the entry into force of this law, and in the case of real estate of unknown owner, the municipalities have legislation that allows temporary occupation of the property, to carry out remodeling works and put the properties in lease programs, facing current lease needs.

In situations where the owner is known, with the imposition of sanctions (eg. IMI increase) and the pressure from the municipalities to carry out works, they have decided to put the property on sale. According to Paulo Lopes, if you just research the real estate market, it already has the existence of several vacant properties for sale. The number will probably increase.