trouble with lawyer in a real estate transaction

Was an estate agent involved in the transaction or were you dealing directly with the seller?

Hi Rob,

The real estate  agent represented the seller- we found the lawyer on our own. She would call us periodically to express worries about the wait for the CPCV. The lawyer always said: "Relax. Don't give in to pressure."

What was the agreement with the lawyer? Do you have the wording? What did the agreement say? A transaction hasn't taken place and drafting a promissary is mostly a copy and paste job.

Do you mean by promissory  a document that reserves the real estate for you, prior to seeing the notary to complete the final transaction. I wonder because our "Reserva de Imovel" is a one page document prepared by the RE Agent and signed by buyer and seller. Defintely not worth €8700.

If you agreed to pay the lawyer this amount without stating by when this has to be done and independent of whether the final real estate transaction takes place then - good luck. Maybe you can still negotiate the price.

Its called a promissory and it's a pre-contract - basically a blue print for a final deed.

A reserva de Imovel has no legal value anyway- it just means that that particular real estate agent cannot show your property, not others. Otherwise, I would gladly have paid 2000€ for a reservation.

I don't think lawyers would accept a clause that states they don't get paid if the transaction doesn't take place.

I just think that an email is not a binding agreement- and wonder if I can still offer to pay less than 8000€, which seems unfair. Of course, he's having none if it. Thanks for your input!

What was the agreement with the lawyer? Do you have the wording? What did the agreement say? A transaction hasn't taken place and drafting a promissory is mostly a copy and paste job.
-@Rob Evans

In an email to him I said that 1,5% "is acceptable" to me- that's it.

he said he would make a binding agreement when the IMT is determined. Then they can hold your check to the owner in escrow until you pay the lawyer.

I 100% agree with you- I thought the promissory would basically be just like the final contract, but was very surprised to see it's a simple document with info about parties and the real estate - it;s a total racket.

Hi Bettina,

I suggest you have a meeting with another lawyer, and ask him for legal advice on what you should do. You may pay 80 to 100 euros for an hour's conversation.

Fees can be fixed by agreement between the parties. But as this agreement was made before the final conclusion of the house sale, it seems to me that the lawyer's right to the full amount of the fees is directly dependent on the outcome of the case, which in this case did not happen. Find out more before you pay. It all depends on what you have signed, and how the emails you exchanged with your lawyer are written...

Thank you so much for your response, Johnny! I have to stress that this lawyer is NOT Portuguese, but practices in Portugal. Several Portuguese real estate people have expressed their sympathy for my predicament and said this and that in terms of paying or not.

I will indeed contact another lawyer. Of course, no lawyer wants to discuss payment issues a client has with another lawyer, but I do believe it is my only option. After all, "my" lawyer was completely bereft of empathy when he learned we lost the apartment - and when I asked him why he insisted on waiting for telas finais for two weeks after the other docs came in, he called me "impertinent"- 

Its called a promissory and it's a pre-contract - basically a blue print for a final deed.
A reserva de Imovel has no legal value anyway- it just means that that particular real estate agent cannot show your property, not others.
-@bettinakozlowski

Well, our Reserva de Imovel was not signed by the RE Agent and thus didn't oblige the RE Agent to anything. It was a short agreement between buyer and seller based upon which we paid 10% of the sales price and later on finalized the whole transaction. The altter worked without problems and without payment to any lawyer.

@nz7521137

Well...good for you. The 10% payment  is usually  part of the Promissory Note, btw, so may be that is what is what you signed. I'm here because I have a problem with a lawyer

@Bettina,

Is he a member of the Portuguese Bar Association (Ordem dos advogados) ?

https://portal.oa.pt/advogados/pesquisa-de-advogados/

(Check it here - Fill in the "nome" field)

If not, I wouldn't pay. If yes, I would ask the Bar Association about such procedure. Maybe they will reply:

https://portal.oa.pt/contactos/conselho … -do-porto/

(Ordem dos advogados - Conselho regional do Porto)

This is a really crap situation but I agree with Johnny that you need to get advice from another lawyer.

We narrowly avoided having to pay a fee to a mortgage "broker" who was in fact simply gathering details and sending them on to an actual broker in Portugal. All this guy did was have a website that asked all the relevant info up front that he could then send to the actual broker in Portugal to get available mortgages, and he asked for 1.5% of the transaction.

Thankfully in our case I was investigating mutliple avenues to get a mortgage and my Portuguese estate agent was able to connect me with a broker in Portugal so we ended up with no fees there.

It really is crazy in your case that someone should expect that kind of fee for drafting a promisary which is... like I said, mostly a copy and paste job. There are a few minor bits that might need adding or ammending but once you have one promissary, you can ammend it per-client pretty quickly.

Our estate agent did that as part of their process so we didn't have to pay for it (he makes his fee from the seller on successful completion).

Please keep us up to date in here as you progress with this, and we hope it all works out for you!

hi! my friend had a similar problem in Lisbon. He wanted to sell his apt, but then changed his mind. The broker told that my friend must pay 7k regardless whether the deal happened. As far as I am aware, natural persons are free to act as they desire, but broker is probably a legal person - that may imply some liability.

Anyways, that is a nonsense clause, and payment like that can't be claimed. Maybe some proportional payment per hour for work performed. I think my friend ended up not paying those scam brokers:) (he was consulting with a local lawyer at the company he employed)

@bettinakozlowski I am an attorney licensed in the U.S. but not in Portugal, where I now reside. The following are just my thoughts regarding your message and based only on your message, so please don't take it to be a legal opinion as to Portuguese law.

As I understand property purchasing here in PT, there is no binding contract unless and until a Promissory Note is signed by the seller(s) and buyer(s). Once a Promissory Note is effective, it doesn't prohibit either party from pulling out of the deal but a financial penalty applies if a party does so.

In your situation, the seller sold the property to someone else before completion of the Promissory Note, as the seller never signed it. Legally, the seller had the right to sell to another party without a penalty until he or she signed the Promissory Note. I believe that, even when a Promissory Note is signed by both parties, it may be disputable as to its validity, if it is not properly recorded.

There is no way to know for sure if the seller would have signed a Promissory Note and sold you the property, if the Promissory Note were prepared earlier. While we may view the sale to another party as unethical, while a Promissory Note is in progress with someone else, it is legally permissible here. There are pros & cons in getting a Promissory Note to a seller quickly after a buyer's offer is accepted. Problems with legal documents on a property are, apparently, common. You should be fully aware of your rights and options regarding a Promissory Note.

As for the lawyer's fee, he is certainly entitled to charge for document review, drafting the Promissory Note, etc., and work otherwise related to the process leading up to the Promissory Note. First, you need to carefully review your understanding of the amount you agreed to pay the attorney and  what work that amount covered.

€8000 seems very high for even a full real estate transaction that went to completion. You can ask around for info on what others paid attorneys. It may be that you need to hire another attorney to deal with the lawyer payment issue. From your message, it does not appear that you have sufficient familiarity with the legalities and customary attorneys' fees surrounding a real estate transaction to be able to arrange a suitable fee negotiation with your real estate attorney. If you feel that you can identify a reasonable cost for the services your attorney already rendered, then you could offer to pay that amount to him to fully discharge your debt. One thing to ask for, if you don't already have it, is an itemized bill of services. At baseline, it should show you the task performed and the amount charged for it. If it is a task charged a flat fee, you should see that description. If it is a task charged by the hour or fraction of a hour, you should see the task, the amount of time it took to perform the task, the hourly rate, and the final amount for the task (time spent x hourly rate = final charge for the task.)

I hope this perspective helps a little bit. Best of luck in resolving this situation.

We retired from real estate in Portugal in 2010 so we know the procedures and costs well. In the past 18 months we bought two properties both under 2 years old, on the Silver coast and used two different Portuguese lawyers. Each only charged Euro 1000 for everything. That is checking the paper work and the CPCV which was drawn up by the sellers representative, some changes were required in both cases and these were made and checked again. Our lawyers signed the CPCV on our behalf and disbursed the deposits that we had transferred to their accounts. Our lawyers then paid the taxes and various fees and attended the Notary to sign the Final deed and paid from funds we had sent to them. We had given POA to both lawyers so that we did not have to attend in person and the POA was included also. After the final deed the paperwork was updated into our names and copies supplied.

Ok we were in the business and know how to strike a good deal with lawyers, but I am saddened to see that many buyers are being ripped off and charged ridiculous fees.

Go to as many lawyers as you need to and discuss the work, the terms, agree a price and get it in writing.