Sealed bid (carta fechada)
Updated on
A sale by carta fechada is a method in which each interested party submits a single secret bid and all bids are opened at the same moment.
Unlike an auction, in a carta fechada sale nobody sees the other bids. Each person states the price offered and, on the set day and time, the bids are opened. The highest wins.
Tax Authority. It is the second stage of the sale: if the attracts no bids, the sale moves to sealed bids for 15 to 20 days, with the base value dropping to 50% (CPPT article 248). The bid can be sent electronically through the Portal das Finanças (article 251).
Courts. Bids are handed in at the court office together with a of 5% of the announced value, and opened before the judge (CPC articles 820 and 824). The preferred method in civil enforcement is now the electronic auction, so court sealed bids are less common.
Example
Illustrative example: a property valued at €100,000 received no bids in the Tax Authority auction at €70,000. It moves to sealed bids with a base value of €50,000. Three bids arrive: €51,000, €58,000 and €63,000. The €63,000 bid is accepted.
In practice, at an auction
If the highest price is tied, opens between the tied bidders; if none wishes to raise, lots are drawn (CPPT article 253; CPC article 820). In court sales, a bid can only be withdrawn if the opening is postponed by more than 90 days. Step by step: Sealed bids: how to make an offer.