Making Construction and Property Rehabilitation Easier: The Simplex Reform

By Friday April 19th, 2024 Artigo

The second legislative reform of the Simplex program was published under DL No. 10/2024 to simplify administrative procedures for construction and property rehabilitation.

Portugal has included the Simplex program in its Recovery and Resilience Plan to strengthen relations between citizens, businesses, and the government.

The idea was to reduce administrative burdens and complexities hindering business activity. The government aimed, with the new licensing simplex, to reduce the bureaucratic burden faced by companies, especially regarding sector-specific licenses.

In reality, the implementation of the simplex program began with the approval of simplification measures in the environmental sector and other areas in Decree-Law No. 11/2023.

However, despite the efforts made, Portugal still faced significant business environment challenges. Indeed, both the European Commission and the World Bank have continued to point out the existence of excessive barriers to licensing economic activities as obstacles to competitiveness and investment in Portugal.

With this new package of SIMPLEX measures, the Government sought to prioritize the simplification of administrative activity, both for construction and property rehabilitation licensing (as well as for other sectors such as industrial). To this end, and promoting a “zero licensing” approach, it attempted to eliminate unnecessary licenses and authorizations.

However, as we had the opportunity to write here, some gaps and inconsistencies in the drafting of this new package of measures have generated uncertainty and criticism from some institutions.

According to the Government, the intention is to promote new legislative initiatives with the same purpose of simplification and reduction of administrative burdens, especially in the sectors of commerce, services, tourism, and agriculture. The goal will be to continue the reform of simplifying existing licenses, eliminating unnecessary procedures, and facilitating business activity to promote economic growth.

Thus, with the aim of simplifying the construction and rehabilitation of properties, the Simplex program:

  • Eliminates the “need to obtain urban planning permits”;
  • Introduces new cases where only prior communication is required, exemption, and waiver of prior control;
  • When it is legally possible to follow the simplified prior communication procedure, it is no longer possible to choose the license regime;
  • Creates new situations exempt from prior control – works such as the creation of interior floors that do not affect structural stability; for the replacement of openings with others; with identical exterior finishes to the original, or to promote energy efficiency, will be exempt from any prior control;
  • Eliminates the need for an opinion from the competent entity regarding cultural heritage in certain situations, such as works inside buildings or conservation outside, and even for the installation of advertising signs;
  • Replaces the construction license with the payment receipt of due fees;
  • Extends the validity of favorable preliminary information to two years without the need for an extension;
  • Extends the deadline for the execution of works indefinitely;
  • Internal building matters or specialties such as water and electricity will not fall under municipal jurisdiction.

In other words, the reform simplifies the processes of obtaining urban planning permits in Portugal for construction and property rehabilitation, facilitating prior communications and information instead of issuing licenses.

The intention seems to be to focus on enforcement. That is, as a guarantee of compliance with legal standards, instead of allocating resources to lengthy bureaucratic processes for licensing, the simplex focuses on enhancing enforcement powers during and after the completion of the work.

Municipalities will have more autonomy to contract inspection services without the need for prior approval. Furthermore, inspections will be guided by strict legality, without interfering with aspects related to the technical merit of the works.

With the same aim of simplification and transparency in the licensing of construction and property rehabilitation, measures are being introduced such as:

  • Alteration of procedure deadlines and (re)introduction of the concept of tacit approval;
  • The countdown for deadlines begins upon submission of the request by the individual and not at an intermediate moment;
  • Limitation of requests for additional information to only once during the procedure;
  • Delegation of powers to service directors, avoiding overloading the responsible councilor.

These measures change the procedure itself, simplifying it and expediting its processing.

Additionally, measures are being adopted to standardize procedures and avoid disparities in treatment among municipalities.

This means that, although each municipality may have its own land use and building regulations, procedural and formal rules will be more consistent across the country. Thus, costs and complexity of the process for individuals are reduced.

It is noteworthy the introduction of the regime of tacit approval. Individuals can now proceed with their projects if municipalities do not make the necessary decisions within the established deadlines.

However, it is important to recognize the pressure that this measure of tacit approval puts on a public administration with limited resources and personnel. For this simplification to be effective, it is necessary to simultaneously optimize available resources to handle administrative staff overload. It is not advisable to lighten the processing of procedures by relying on municipality delays, with a view to taking advantage of this measure. Urban planning is at stake.

Furthermore, the creation of an Electronic Platform for Urban Procedures is planned, which will allow online submission of requests, consultation of processes, receipt of electronic notifications, among other functionalities.

This platform will be mandatory for municipalities as of January 5, 2026, ensuring uniformity in procedures and required documents.

In summary, the recent legislative reform aims to simplify the bureaucratic processes involved in urban licensing.

The intention is clear: to streamline and uncomplicate administrative procedures, creating a more conducive environment for urban and social development.

However, it is crucial to consider the issue of legal security in the sector, as an excessive simplification of processes can lead to imbalances.

There is a legitimate concern that this simplification may leave consumers more vulnerable, as they are often the least informed and protected party.

On the other hand, postponing the verification of legal compliance of works to later stages can lead to a significant increase in embargoed or suspended works. Indeed, such a situation could result in even greater commercial damage than that caused by the slowness of licensing procedures.

Yes, it is a fact, it is not sustainable for years to separate the licensing request from the start of construction. However, it will be even worse if, after the initial investment, stakeholders encounter the same obstacles as before, now brought on by inspection.

It is therefore essential to strike a balance between simplifying procedures and ensuring legal security, in order to promote sustainable urban development and avoid losses for all parties involved.

We will be here to see if the goal is achieved.

Thank you for reading,

The GSN Team