Though Fewer Homes Are Being Repossessed, Deco is Calling for More Protections

5 November 2017

In 2016, the number of repossessed properties fell to levels last seen in 2011. But Deco has warned of the existence of homes that are threatened by small debts, such as telephone bills

Fewer homes are being repossessed in Portugal. By 2016, the number dropped to levels last seen in 2011, the year the troika arrived. The improvement of the country’s economic situation and the reduction in the unemployment rate help to explain the reduction. According to data from the Ministry of Justice, to which the DN/Dinheiro Vivo had access, in 2016 the number of properties that had liquidation imposed in the courts of first instance reached 9581. This was a decrease of 4% compared to 2015 when there were 9982 repossessions executed by the courts. That figure is below the 9612 registered in 2011, the year the country applied for foreign financial aid.

The difficulties brought about by the austerity imposed by the international lenders led to a peak in repossessions in 2013, which rose 74% compared to the registered in 2011, to 16,746 properties. In May 2014, Portugal announced the departure of the Economic and Financial Adjustment Program. And since then repossessions have been declining, coinciding with the recovery of the economy. In 2016, the economy grew by 1.4%. The unemployment rate, which in 2013 reached 16.2%, fell in 2016 to 11.1%. Before the rescue, in 2010, unemployment stood at 10.8%.

Deco calls for strengthening protections

Despite the decline in the number of property repossessions, Deco – the Association for Consumer Protection – is calling for protections for family homes to be strengthened. This is due to reports that it has received, for example, of cases where families lost their homes as a result of debts to telecoms companies. In 2016, Law no. 13/2016 of May 23 was introduced, which amended the Code of Procedure and the Tax Procedure to protect family residences within the scope of tax enforcement proceedings.

But Deco believes that families remain unprotected and at risk of losing their home due to other types of debt, including low-value debts, mortgages and in cases where they are third-party guarantors. “We have reports of families who lost their homes because they cannot pay their mortgage loans and because of minimal amounts of debt,” said Natália Nunes, head of the Deco Over-Indebtedness Support Office. “The law should go further in protecting family homes. At present, protection only exists in cases of execution of tax-related debt,” he said. According to Natália Nunes, the courts lack the power to intervene in the execution of repossessions when housing is concerned. “Family homes have no real protection in Portugal,” she said. He regrets that the judges themselves are unable to help in such situations. “There are cases of families whose home were repossessed due to debts of 800 or 900 euros, which is unfair and completely disproportionate in terms of the amounts owed to the value of the real estate,” Ms Nunes stated. “We have a case in which, because of a loan of three thousand euros, the bank proceeded with the attachment of the house, which calls into question the right to housing in Portugal.”

In 2016, NOS led the list of companies with the highest number of lawsuits, executions and proceedings brought in court. Including among the top 10 are Vodafone, Meo, EDP, debt collection companies, Cofidis, BCP and Bankinter. Each firm brought more than 500 lawsuits in 2016.

For Natália Nunes, “there is a great lack of knowledge on the part of the families of the risk of losing their home in case of debt.” “And the families are very fragile in these cases because they do not have the means of access to an adequate defence in court and to pay legal costs,” she said.

Original Story: Diário de Notícias – Elisabete Tavares

Photo: Gonçalo Villaverde / Global Imagens

Translation: Richard Turner