Unpaid condominium fees in Portugal: what to do

When a condominium has unpaid fees, the answer is to act early: a friendly reminder, an offer of a payment plan and, if the debt persists, legal collection. The law makes that last stage easier, because the minutes (ata) of the owners' meeting that approved each owner's contributions and the due dates are an enforceable title (título executivo) (Article 6 of Decree-Law 268/94, as amended by Law 8/2022). And since 2022 the administrator actually has a duty to take legal action within a set time, unless the owners' meeting resolves otherwise.

What the law says

The obligation to pay

The expenses needed to maintain and use the common parts and to pay for shared services are paid by the owners in proportion to the value of their units (frações autónomas), unless otherwise provided (Article 1424 of the Civil Code). It is the administrator's job to require each owner to pay their share of the approved expenses, including interest and financial penalties set by the building's rules or by a resolution of the owners' meeting (Article 1436).

Interest and penalties

The owners' meeting can set financial penalties for failing to comply with its resolutions, and these can also be written into the building's rules (Article 1434 of the Civil Code). There is a limit: the penalties applied in any one year can never exceed a quarter of the annual taxable income (rendimento coletável) of the offender's unit. A penalty above this ceiling is open to challenge.

On top of penalties, late-payment interest is due on the overdue amounts. Under the current wording of Article 6 of Decree-Law 268/94, the enforceable title covers the principal owed, late-payment interest and financial penalties, provided these were approved by the owners' meeting or are in the building's rules.

The minutes as an enforceable title

An enforceable title lets you go straight to enforcement proceedings, without first having to obtain a judgment recognising the debt. For the minutes to serve this purpose, they must state:

• the annual amount each owner has to pay;
• the due dates of those payments.

Minutes that only approve the overall budget, without the breakdown per unit and without due dates, may not be enough. It is worth checking this before every ordinary meeting.

The 90-day deadline

Law 8/2022 added a duty for the administrator to Article 6 of Decree-Law 268/94: to bring legal collection proceedings within 90 days of the owner's first missed payment, provided the amount owed is equal to or higher than the social support index (indexante dos apoios sociais, IAS) for that calendar year. The owners' meeting can resolve otherwise, for example to allow time for a payment agreement.

Step by step to collect

1. Spot it early

The more time passes, the harder it is to recover. An up-to-date account statement for each unit makes it possible to spot arrears in the very first month. At Condgest, each owner can check their account on the owners' portal, which prevents many late payments caused by simply forgetting.

2. Friendly contact

A written reminder followed by a phone call solves a good share of cases. Many debts arise from changes of bank, inheritances or sales that were not properly notified.

3. Payment plan

If the owner cannot pay everything at once, a written agreement with instalments and specific dates is often the quickest solution. The owners' meeting should set the criteria for these agreements or ratify them, and the agreement should include the owner's acknowledgement of the debt. Acknowledging the right before the creditor interrupts the limitation period (Article 325 of the Civil Code).

4. Final demand

A registered letter stating the amount owed, broken down by period, with a final deadline for payment or an agreement.

5. Legal collection

Route	When it is used	Note
Enforcement proceedings (ação executiva)	When the minutes meet the requirements of an enforceable title	Allows you to ask for seizure of assets or income
Payment order procedure (injunção)	For money debts without a suitable enforceable title	If there is no objection, it produces an enforceable title
Declaratory action (ação declarativa)	When the debt itself is disputed	Takes longer

In court, the condominium is represented by the administrator (Article 1437 of the Civil Code). Choosing the route and conducting the case should be done with a lawyer or solicitor.

Selling a unit with debts

Since Law 8/2022, anyone selling a unit must ask the administrator for a statement of all current condominium charges and any outstanding debts, with their nature, amounts and due dates. The administrator has 10 days to issue it, and the statement is a mandatory supporting document for the deed or the authenticated private document (Article 1424-A of the Civil Code).

Debts are the responsibility of whoever owned the unit on the date they should have been paid, unless the buyer states in the deed that they waive the statement and therefore accept responsibility for any debts of the seller. Charges falling due after the sale are the new owner's.

In practice, a sale is often when old debts get paid, but you should not wait for one.

Limitation period: how long the condominium has

Condominium fees are periodically recurring payments and, according to the prevailing view in the courts, they become time-barred after five years (Article 310(g) of the Civil Code), counted from the date each payment could be demanded. An unpaid fee from January 2021 may therefore be time-barred in 2026 if nothing has interrupted the period in the meantime.

The limitation period does not apply automatically: the debtor has to invoke it. But letting debts build up for years is the most expensive mistake a condominium can make. Extraordinary contributions, such as a one-off payment for works, may be treated differently and should be looked at case by case.

Mistakes to avoid

• Approving accounts without the breakdown per unit and without due dates in the minutes.
• Setting penalties without a resolution, or above the limit in Article 1434.
• Letting years go by without any demand for payment.
• Naming debtors in the common areas instead of dealing with the matter through the proper channels.
• Using the common reserve fund to plug the gap left by unpaid fees without a resolution and without planning to replenish it.

This article is for information only and is not a substitute for legal advice on a specific case.

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