Apartment Rental (Part Five)
To review, I was in Porto with Miguel, our real estate agent, and after checking out several apartments, the last one was a winner. I was up late talking to Jana via Skype and up early the next morning to let Miguel know we were ready to start negotiations on the Miragaia flat. This is when it gets real…
It was at this point that I learned about the landlord's preference not rent to a foreigner though Miguel assured the landlord's son that we were exactly the type of renters they were looking for: older, quiet, respectful of the property and financially secure. However, he also warned me that we were probably going to have to come up with a more sizable rent deposit in addition to the security deposit because we didn’t have a track record as renters here.
After some discussion, we agreed that it would be acceptable to offer a security deposit equal to one month’s rent, and three months’ rent in advance. We still be making a rent payment at the beginning of September, so the landlord would always have a total of four months’ rent in his possession. Ouch!!!
At this point, our visas had not yet come through, so we’re agreeing to eight months’ rent due on a twenty-four month contract (remember the one-third rule?) with the possibility that the SEF (Serviço de Estrangeiros e Fronteiras) might still turn us down. Time to take a big deep breath and go for it. So while Miguel returned to the hotel to call the landlord and hammer out the contract, I headed off to play tourist in Porto.
This is where having pros on your side really matters. If this was a U.S. rental contract, I’d have a much better chance of understanding the nuances, but trying to work out the details in a foreign country without adequate backup is just increasing the chances of making an expensive mistake. Nearly every day we see horror stories on some of the expat boards about folks who have been screwed over. If you can't source local assistance from friends, or other expats, consider hiring a well-regarded real estate agent to help you with this next step. If you encounter a landlord who doesn’t want to issue a contract or insists on keeping your deposits months after the contract ends, it’s time to walk. Trust your instincts.
As the day rolled on I received text messages from both Miguel and our lawyers reassuring me that all is on track. I deeply appreciated those reassurances while I took lunch down by the river, hit a couple coffee shops (I’m now an espresso junkie) and hitched a ride on the funicular railway. At this point, I am fully aware that there is a tremendous amount of activity being done behind the scenes. To help matters out, besides the landlord’s son acting as go-between, his daughter-in-law was a lawyer so she could handle the legal work on his behalf. Coupled with Miguel and our lawyers, I knew we were getting the best contract possible.
By the time I got back to the hotel about 5 PM, we had a preliminary contract, and a meeting set up for the next morning. The stars were aligned on this project: To go from looking at an apartment to signing a contract in a day and a half is just unheard of in Portugal (a process I’d been told usually takes seven to ten days, at the very least, most of the time chewed up by the legal teams). What speeded up the process? Besides the pros, we also had our Portuguese fiscal numbers (also referred to as a NIF) and a local bank account adequately funded to handle the deposits/rent. (The bank account has an App that allowed me to wire the security deposit and the required rental payments during our contract signing.)
The contract that we signed was very clean, mostly the restatement of Portuguese rental laws, which Miguel explained to me paragraph by paragraph. Due to the general reluctance to rent to foreigners in the Porto area, we did end up having to pay quite a bit of money up front, but that is what it was going to take. The experience may have been much different in Lisbon, and likely to be a lot different with rentals in the Algarve where there is a higher concentration of expats.
The finalizing of the contract was straightforward: Initial the top of each of the page and sign my life away on the last page. Then a few entries on my iPhone which directed the money to the landlord's account. After that I have the keys in my hand, handshakes all around and we are a giant step forward to starting our new life in Portugal!
Now came the next challenge: changing over the utilities to my name.
The water, sewer and trash in Porto are supplied by a municipal utility and the offices are in the main part of town. Having been shown where the gas and water shut off valves were in the apartment complex, and how to turn on the electricity to the apartment, I’d taken photos of anything I could think the service providers might need. I also toted along my fiscal number, my passport and the rental contract, because the more docs you have, the better off you are.
Note: Don’t be surprised if someone along the way takes a photocopy of your contract. It’s the way things are done here.
The first stop was the water company. I tried out some of some of my elementary Portuguese as the agent did not speak much English. Between the two of us, we persevered and after half an hour I had arranged water for our new home. It definitely helped that I had a photo of the meter so they had the proper numbers to plug into their form.
Unlike the water, the gas and electric is not municipal but are provided by third party marketers, like in some parts of the US. I went over to Galp Energy in Vila Nova de Gaia (a city on the other side of the Douro River) on Saturday morning but was missing some necessary information. For electric service I needed a ‘location code’ called the CPE and for the gas there was a code called the CUI. The agent at Galp said I would need to telephone to get the numbers. Not sure how to proceed, I chatted with Miguel (who was back in Lisbon at this point) and he said to contact the landlord and ask for an old billing statement. That was promptly provided via my iPhone and it had the necessary numbers that the gas company required. Unfortunately, that office was now closed, it’d have to wait until Monday.
During a conference call our lawyer recommended we work with EDP, a different gas and electric supplier, which I did. Adrienn also took on the task of setting up our phone and internet service, which helped immensely. By the time I flew home on Tuesday, we had an apartment, as well as various utilities: gas, electric, telephone, internet, landline phone and cell phone service.
I’m still astounded at the speed at which this came about and can only repeat that having professionals on your side can make all the difference.
However… understand that our experience is unusual and that patience, documentation, and more patience is always required when you’re renting in a foreign country. Do be extra cautious with any landlord who wants to “work off the books”. Just like in the U.S., it’s buyer beware.
In our next blog post, we’ll discuss what it’s like to move into an apartment a third the size of our home.
10/10/2017 03:40:35 pm
I love your adventure so far, my wife and I hopefully won't be far behind. The apartment story hits home-we can handle all the paperwork thrown at us but are really unsure how we'll make the housing requirement work. Will your real estate agent and lawyer be willing to work with others the way they did with you?
10/10/2017 04:23:44 pm
Thank you! It's fun documenting all this, knowing that someday we'll look back and mumble, "Wow. We did that?"
We mentioned how some landlords may try to cut corners. One way to do this is to not record the contract so they do not have to pay taxes. How will you know? Well, every month you should receive a receipt from 'Autoridade tributária e aduaneira,' who is the tax system in Portugal. This assures that your rent has been reported. This also assures the renter that the contract has been recorded. This is important if there would be any conflict between renter and landlord, that the parties will be backed up by Portuguese rental law.
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Harold is a former software engineer. Jana is an author. Together they're exploring their new life in Portugal.