New rules on credit agreements for consumers relating to residential immovable property
Meet the Law
Decree-Law no. 74-A/2017, published in the Portuguese Official Journal on 23 of June 2017 ("DL 74-A/2017"), transposes into the Portuguese jurisdiction part of the provisions set forth in Directive no. 2014/17/EU, of the European Parliament and of the Council of 4 February 2014 ("Directive 2014/17/EU"), which regulates the marketing of credit agreements with mortgage guarantee or equivalent.
In addition to the partial transposition of Directive 2014/17/EU, DL 74-A/2017 foresees the legal framework for credit agreements relating to immovable property, namely through the provision of rules applicable to credit to consumers guaranteed by mortgage or other rights related to immovable property, thus consolidating legal rules and regulations foreseen in several legislation which already granted rights related to mortgage credit.
DL 74-A/2017 promotes the awareness and adjustment of consumer credit, in particular, through the strengthening of the provisions relating to the evaluation of the consumer's ability to repay the credit, and the establishment of guarantees suitable to ensure the rational and informed decision by the consumer about the characteristics of the credit, which must be properly suited to the consumer and communicated through the European Standardized Information Sheet (ESIS), also foreseen in said diploma.
A set of measures for the granting of responsible credit is also created, as the requirement of a proper level of skills and remuneration of the lenders' workers and providers of services in order to ensure the performance of their duties with quality and efficiency, and the establishment of a set of rules for the management of conflicts of interest.
According to DL 74-A/2017, the lenders must join, at least, two entities qualified to carry out arbitration proceedings, in the context of their obligation to make available alternative dispute resolution mechanisms to their clients.
These rules will enter into force on 1 of January 2018.