Pre-emption right (direito de preferência)
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The direito de preferência allows certain people, such as a co-owner or a tenant, to take the property instead of the auction winner by paying the same price.
A person with a direito de preferência does not bid: they wait for the result and, if they wish, step into the winner's place at the price the winner offered.
The most common cases at property auctions are:
- a co-owner, when another's is sold to an outsider (Civil Code, article 1409);
- a tenant, on the sale of premises let for more than two years (article 1091);
- anyone holding a registered pre-emption agreement that binds third parties (article 421).
In civil enforcement, holders of a statutory pre-emption right, or of a contractual one that binds third parties, are notified of the day and time of the sale so they can exercise it (CPC article 819). Once a bid is accepted, they are asked whether they wish to pre-empt; if there are several, bidding opens between them (article 823). In Tax Authority sales, they are notified of the day and time the assets are handed over (CPPT article 249(7)).
Example
Illustrative example: half of a plot is sold at auction for €20,000. The owner of the other half is notified, declares that they wish to pre-empt and deposits the €20,000. The half is awarded to them, and the highest bidder goes without.
In practice, at an auction
Holding the best bid does not secure the purchase when pre-emption holders exist. An e-Leilões listing must name the pre-emption holders known in the case, and the right is exercised directly in the proceedings, not on the platform.
A holder who was not notified may still bring a pre-emption action under the general rules (CPC article 819(4); Civil Code article 1410). In that case they replace the buyer, paying the price and the costs of the purchase.
The of the debtor's family takes priority over pre-emption (CPC article 844).