Real estate expert Filipe Lourenço points out the complications of the simplex and warns of the responsibility of the property sector to warn of risks.
Source: Author
Author: Filipe Lourenço, Real Estate Specialist
It promised to revolutionise the real estate sector (lato sensu) through simplification, but, being nice and diplomatic, the vast package of legislative changes published at the beginning of the year is still being assimilated by the various players in the process.
While making it clear that I always welcome any legislative changes that help to reduce bureaucracy in the licensing of any urban development operation by the municipalities, it is essential that there is a transversal method and a single line of interpretation of the legislation.
This is not the case. The municipalities that apply the new legislation (!) differ in their application (what is possible in one, is not in another), the banks also differ, and municipalities and banks still differ between themselves. As if that weren't enough, instead of clarifying, the regulation of the diploma has added even more doubts.
It's the real complication of the simplex.
Only those who are building owners, property consultants or players in the sector are aware of the widespread confusion at this time of a paradigm shift, with the municipalities moving control of urban planning operations from a phase prior to the respective execution to the moment of execution or even completion of the work.
The legislative changes were aimed at simplifying and speeding up procedures, eliminating or softening legal requirements, project appraisal parameters, or eliminating the intervention of licensing bodies, such as town halls, in cases such as the extension of urban planning operations, which are now only subject to notification of commencement, or even exempt from prior control.
Good news, were it not for the disparity of interpretations on the part of the intervening entities, on the one hand, and, on the other, the creation of the generalised perception in the market that everything was, in fact, much simpler and quicker. When it comes down to it, property consultancy is caught between the bureaucratic machine with its different interpretations of the same law and the client who thinks that everything is now easier and quicker.
It's up to responsible real estate agents to warn of the increased risk of buying properties with illegal alterations, and it's up to the buyer to check. There is also the risk of compromised access to credit, as banks continue to ask for a licence to use the property when applying for a mortgage. Not to mention the potential risk that the future sale of the property will be more complex and likely to devalue.
More than just a temporary collateral impact, this is a ball of string that will take a long time to unravel, with standardised procedures that are transversal to all municipalities and banks in particular. Until then, it's up to property consultants to accommodate some of the impact and advise their clients as best they can.
Until everything is standardised, we can save ourselves the irony. After all, it is no longer compulsory to have baths and bidets in bathrooms, as has been widely reported.
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