Urban simplex: advantages and risks

The lack of affordable housing is a growing trend in Portugal, which results from a reduction in the supply of houses for purchase or lease. To address this problem, the More Habitação program was implemented, which includes urban simplex measures. Although there are various advantages associated with the urban simplex, these measures are not isolated from cliffs.

Simplex Urbanístico

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What is urban simplex?

The urban Simplex is part of the “More Housing” package of measures approved by the Government, with the aim of solving the growing problems in housing.

The idea behind simplex measures is to reduce bureaucracy in the property buying and selling process, eliminating some unnecessary steps during it. Therefore, these measures essentially aim to speed up the process of building, buying and selling properties, so that the market is less saturated and makes housing more accessible to the Portuguese.

Therefore, despite not being perfect measures as they pose some risks, promoters and mediators consider the implementation of these measures to be beneficial for boosting the real estate sector.

What changes with simplex?

The Urban Simplex is part of the package of measures “Mais Habitação” approved by the Government, with the intention of solving the growing problems in the habitation.

The idea behind simplex measures is to reduce bureaucracy in the process of buying and selling property, eliminating some unnecessary steps during the process. Thus, these measures are essentially intended to accelerate the process of building, buying and selling property, so that the market becomes less saturated and makes housing more accessible to the Portuguese.

In this way, and despite the fact that there will not be perfect measures to trace some risks, promoters and mediators consider the implementation of these measures as something beneficial for the dynamization of the real estate sector.

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Advantages

1. Simplification and streamlining of Processes

By simplifying and reducing bureaucracy in processes, responsibility will be transferred from official bodies to third parties.

Thus, property buyers are less unprotected, since these urban simplex measures facilitate the sale of properties with licensing problems, which could be problematic for someone who is not aware of them.

This lesser protection for those who acquire a property can make it more difficult to cancel the sale of the property, and the possibility of reversing the deal, if there are illegalities and contingencies.

2. More properties on the market

With the implementation of urban simplex measures, the sale of properties without licensing is now permitted .  If the buyer is aware of the situation of the property and sees no inconvenience in purchasing it, the sale may be completed. 

In this way, without the need for a license to sell properties, the number of properties on the market will increase.

3. Lower administrative costs

The procedures for obtaining a license were previously very time-consuming and bureaucratic, which resulted in the payment of additional fees and expenses before a property could be sold.

With these measures, the process of obtaining a license will be more agile and efficient, which also makes it possible to reduce or completely eliminate some additional costs resulting from the process.

Risks

1. Less protection for families and investors

By simplifying and reducing bureaucracy in processes, responsibility will be transferred from official bodies to third parties .

Thus, property buyers are less unprotected , since these urban simplex measures facilitate the sale of properties with licensing problems , which could be problematic for someone who is not aware of them.

This lesser protection for those who acquire a property can make it more difficult to cancel the sale of the property, and the possibility of reversing the deal , if there are illegalities and contingencies .

2. Problems with hiring and housing credits

With the implementation of these measures, different financial institutions will be more cautious when granting mortgage loans, possibly not waiving the need to present a license when applying for credit for approval.

Therefore, the lack of a license in some cases may make it difficult to grant mortgage loans .

3. Illegal construction and security issues

Properties subject to works without the appropriate license may be subject to fines, legal action and, ultimately, the property may even be considered illegal and, as such, have to be demolished.

With this greater circumvention of rules and quality requirements in the construction of properties , this can ultimately put the safety of the property’s residents at risk . 

Conclusion

Urban simplex measures are an important step towards solving some problems present in the Portuguese real estate sector, enabling an increase in the supply of properties for sale and new construction projects, reducing excess bureaucracy in processes and reducing property sales prices.

However, when it is no longer necessary to present a license to sell a property, the buyer must exercise greater discretion and care in their investment, as they become more responsible for it.

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