Illegal buildings/pools in the Algarve and Legalisation

A brief history

Many people are surprised to discover that there are enormous amounts of illegal (or unlicensed) buildings, extensions and swimming pools throughout the Algarve. There are historical and practical reasons for this.

If we look back a few years in time, the process to build a swimming pool or to alter an existing house was as slow, costly and cumbersome as the process to build a new house. Approval times for projects were (and still are in many cases) measured in years, not months. The net result of this was that it was cheaper, quicker and easier to build something without permission and then legalise it afterwards, rather than follow the correct process. As there is no overt control of unlicensed building (in general the municipalities do not send people out looking for infractions), then there was no incentive to legalise any unlicensed construction.

Discovering the truth

When buying a property in the Algarve that has unlicensed parts, purchasers should understand exactly what they are buying. Due to the disparate nature of records relating to properties and construction in Portugal, it is not always easy to find out which parts of a property are correctly licensed. This is, in itself, a complicated subject so we will only give a summary here.

The first thing that we look at is the stamped plans of the property. These will have a stamp (or "carimbo") from the council, to confirm that they are the plans registered at the municipality as part of the construction process. However, not all properties have registered plans, for example any property that is exempt from having a habitation license will not have plans registered at the council. In that case, things are more complicated and less clear.

When stamped plans exist, these can be carefully compared to the actual physical property. Often properties may look similar to the plans but are larger (it is often said that the house "engordou" (got fatter) so this should be noted.

To be really sure that all is correct, then it is necessary to visit the municipality and inspect the entire process relating to a property. This will include all information held on record in relation to the property and all inspections etc.

When a property is exempt from having a habitation license, then there will often (but not always) be a certificate issued by the municipality to confirm this. Normally when the request was made for this certificate some form of plans will have been submitted to the council, so these can be checked.

To buy or not to buy?

So you have found the perfect property in the Algarve. If your estate agent is any good, they will have explained that there are some issues with the property, and now you don´t know what to do. In many cases, the initial reaction is to run away, but time should be taken to investigate the issues.

In many cases the unlicensed parts are not of great concern. However, if the alterations/additions are impossible to legalise then you should make sure that you understand the implications of this.

Just because a property has some illegal parts it does not mean that it can not be sold, or that you should not buy it. Information is key.

It is worth mentioning that some properties (mainly those that do not need a habitation license) often have rather opaque and unclear records. This often means that it is not possible to exactly define what is licensed, so assumptions have to be made.

REN and RAN-beware

If the property in question is within one of the more protected areas (REN or RAN-ecological or agricultural reserve) then future legalisation will be more complicated, as permission is needed from the entities responsible for these areas.

Addtional restrictions in relation to construction are often applied, and these can include a reduction in the built area permitted and even a charge over the property that prevents you from selling it for 10 years.

Common pitfalls

In the past there were fewer rules as to what you could build, where you could build it, sizes of construction etc. It is probable that the planning rules have changed since the original construction.

If the existing construction does not comply with the current planning rules, then it will be difficult (and in some cases impossible) to legalise.

Common issues are:

• Construction too close to the boundaries of the plot
• Built area larger than currently allowed
• More floors/stories built than is now allowed

Legalisation project

If you want to resolve the issues in relation to your property, then you can submit a project to the council, asking to legalise the unlicensed parts of the property. This is a formal process, which has to include architectural (and in some cases Engineering and Building Services) drawings and a specification, studies of the PDM (planning rules) and any other permissions that my be necessary from third parties.

There are different types of legalisation project, and these depend on the age of the property and the rules in that particular council. If a property was built before 1989 then you are able to ask for the legalisation based on that, although you have to prove the age of the property. 

If the unlicensed parts were built after 1989 then there is no "automatic" right to legalise, which can result in a more complicated legalisation project. In any case, nothing is guaranteed, as the council will decide what they will permit to be legalised.

The timescale to complete a legalisation project is not defined, and it is normally in excess of a year. If permissions are needed from other entities, then this will add to the time needed.

Bank valuations and unlicensed parts

You can purchase a property with unlicensed parts and obtain a mortgage. In most cases the bank valuer will give a zero value in relation to the unlicensed parts, which will reduce the amount the bank is prepared to lend you.

If a legalisation process is ongoing at the time of the valuation, then the valuer may give two values. one "as is" and the other once the legalisation is completed.

Summary

Dealing with unlicensed parts of properties in the Algarve is part and parcel of buying and selling properties. If you have good information, and understand the implications and restrictions that exist, then there is no reason that you can not purchase a property with unlicensed parts.