The Pre-Emption Right for Owners of Adjoining Land

Considering the original wording of article 1380(1) of the Civil Code, the majority understanding was that for the pre-emption right to exist, both properties (the one being sold and the adjoining one) must have an area smaller than the cultivation area established for the region. In other words, if one of the properties (the one being sold or the adjoining one) had an area larger than the cultivation area, the pre-emption right would not apply.

This understanding changed in 1988 with the introduction of the new rural consolidation regime (Decree-Law No. 384/88), which specifically stated that “owners of adjoining lands enjoy the pre-emption right as stated in article 1380 of the Civil Code, even if the area of these lands is larger than the culture unit.” The majority opinion was that this provision extended the scope of article 1380 of the Civil Code, hence it was interpreted that the pre-emption right existed if only one of the properties (the one being sold or the adjoining one) had an area smaller than the cultivation area established for the region.

However, in 2015, the new legal regime for the agrarian structure (Law No. 111/2015) repealed Decree-Law No. 384/88, without including a specific provision on pre-emption rights. The question therefore arises as to whether, in view of this repeal, the original interpretation, based solely on article 1380(1) of the Civil Code, should be reinstated, according to which the pre-emption right would only exist if both properties (the one being sold and the adjoining one) had an area smaller than the cultivation area.

Ten years later, despite the limited amount of jurisprudence on the subject, there is a noticeable trend in the jurisprudence suggesting that the pre-emption right does not exist when one of the properties has an area larger than the cultivation area.

This was the recent conclusion of the Guimarães Court of Appeal in the above-mentioned judgment, which stated that, “with the repeal of this regime, (...) whether or not we agree with the criteria established by the legislator for granting the pre-emption right to the owner of the adjoining property, it is clear from article 1380 of the Civil Code that both properties (the adjoining one and the one being transferred) must have an area smaller than the cultivation area for that right to be exercised.”

Similarly, the Supreme Court of Justice reached the same conclusion in its judgement of 13 December 2022 (case 769/17.3T8LRS.L1.S1), stating that there is “no other interpretative hypothesis but to analyse the current legal prerequisites for the exercise of the pre-emption right in light of the provisions of Article 1380 of the Civil Code, as per the 1966 version of the Civil Code, without the said amendment (which objectively no longer exists, having been expressly removed).”

It should be noted that this regime is always subject to certain exceptions, as article 1381 of the Civil Code establishes that the pre-emption right does not exist (i) when one of the properties is part of an urban estate or is intended for purposes other than agriculture, or (ii) when the sale involves a group of properties that, although scattered, constitute a family-type of agricultural use.

Furthermore, it is important to note that the conditions analysed above and these exceptions do not apply to land included in the National Agricultural Reserve (RAN), which is regulated by specific legislation (Decree-Law No. 73/2009). Article 26(1) of this decree simply states that “owners of rural or mixed properties included in a RAN area shall enjoy the pre-emption right in the sale or payment in lieu of adjacent rural or mixed properties,” without introducing any exceptions regarding the area of the land or its intended use.