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Law Alert 1 - Is your Property at Risk of Expropriation?

Law Alert 1 - Is your Property at Risk of Expropriation?

Under the Economic and Social Stabilization Program (PEES - Programa de Estabilização Económica e Social), the Portuguese government has issued a new real estate expropriation law using the current economic crisis and the pandemic as the reason.

This law went into effect on 23 February 2021, and will be in force until December 2022, although it could be subject to further extensions.

How could this new Law affect you?

This law enables the government to use the argument that if it is in the “National Public Interest” your property could be at risk of being expropriated. Properties include villas, buildings, smallholdings and farms.

Who has the right to apply for expropriation of a property?

National government, ministries, governmental companies and departments, as well as locals councils and municipalities. But it does not stop there: in addition real estate developers, mining, telecommunications, energy, and geological exploration companies that have projects of national public interest approved may request the appropriate governmental body for expropriation assistance. Those are just an example of who will be legally allowed to request the expropriation of any property needed for the successful completion of projects seen of being of "National Public Interest".

The expropriation may be partial or of the total area of your property.

 

"This law, which came into force on February 23, 2021 and is in force until December 31, 2022, grants the Government the appropriate legislative authorization, thus enabling the Government by creating a special regime for simplifying and speeding-up the expropriation process.

... "Restrictions caused to public utilities in the properties necessary for underground conduits, circulation paths, needed for the construction of networks or infrastructures which are affected or will be affected, namely for transportation and mobility services, environment and energy, as well as for the realization of geological surveys, other types of surveys and any other required studies or operations, will result in the expropriation of the needed property, but the corresponding compensation will always be guaranteed ".


Does the councils / Municipalities have the right to veto/stop an expropriation or any project considered to be of a National Public Interest?

Many people are under the misconception that local councils can stop any central government actions in their council area at any time. This couldn’t be furthest from the facts.

When an opinion is requested from local councils by the government, it is not with the intent to define if they are for or against any proposed development, instead the opinion the government requests from local councils, are geared to assist in circumventing the difficulties and even opposition that exploiting companies (developers, interested parties, etc) may encounter. It is not a request for approval or denial.

 

In other words, government is using local power knowledge and the influence of local government for the sole benefit of private interests, instead of local public interests.

 

We need to keep in mind, that many local government leaders (Mayors and other local government executives) have their eyes on future seat in central government (i.e. parliament). This results in them often playing cat and mouse games with their local constituents – i.e. appearing to do versus doing.

This is another reason, why it is critically important that all local residents vote if they qualify to do so. Voting, gives you access to your representatives. Meaning they can be held accountable.

If my property is expropriated will I receive compensation?

The compensation due to people or companies for being without what belongs to them for "PEES" type projects, namely projects of National Public Interest is ensured:

 

“The expropriations provided for in this decree-law give the expropriated persons the right to receive fair payment, in accordance with the criteria and procedures provided for in the Expropriation Civil Laws, namely in terms of payment methods, payment guarantees, payment of the respective interest and the attribution of that value to the interested parties ”.

 

However, with regard to this topic, all that is foreseen is what is contained in the Expropriation Civil Code, without any simplifications in this field. However, this solution, although guaranteeing that compensation will be paid, risks making the compensation claim process more time consuming, in our opinion. Time will tell ...

Could the expropriation be reversed?

The current law makes provision for the right of reversion of the expropriation order but only if the assets have not been used for the purpose that it was initially expropriated for.

What type of National Interest projects could see my property being expropriated?

  • Lithium Mining (and many other mining projects)
  • 5G and 6G infrastructures (Telecommunications)
  • The old fracking risk (Onshore oil and gas exploration – the contracts are gone but the concession areas remain – risk of new tenders)
  • Mass agricultural projects
  • Mega Solar parks, and other power grids (Think EDP for example)
  • Airports and other major infrastructure construction projects such as roads, etc.
  • etc, etc, etc...

What can YOU do in the meantime?

  • Support ASMAA as we dig deeper into what’s taking place in the background, behind closed national, regional and local “government” doors, by supporting ASMAA, you enable us to continue to keep you informed.
  • Sign the Petitions that are running. Click here!
  • Vote in the upcoming municipal/council elections. If you not registered yet, we invite you to register now. Council elections will be held in September or October this year. If nothing else, being a registered voter, will enable you to have your voice heard in your local council – that’s one of the first steps to protect your interests should you ever need to do so. (If you are an EU or UK expat, and a resident in Portugal, you can read more about your right to vote in local elections here)

Which political parties voted in the Portuguese Parliament for this new law?

This law was approved in Parliament on September 18, 2020 with votes in favour by PS, BE, PCP, PEV and Joacine Katar Moreira, and votes against by PSD, CDS-PP, PAN, Chega and Liberal Initiative, and the abstention of Congresswoman Cristina Rodrigues.

Can I read a copy of this law?

You can download copies of the law, and the expropriation code in Portuguese in the attachment section below.

What is considered as Fixed Property / Immovable Property?

"Fixed Property means means land, together with improvements affixed thereto, and includes any share or unit in a company which confers a right to or an interest in the use of immovable property, and, in relation to a property time- sharing scheme, any time-sharing interest, and any real right in any such land, unit, share or time-sharing interest."


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