Portuguese renovation contract: what should be included?
You've found a contractor and agreed a price. Before you transfer a deposit or let work begin, here is what the agreement needs to say, clause by clause.
A Portuguese renovation contract should name the contractor, define scope and exclusions, tie payments to milestones, and set rules for delays, changes, snagging and termination.
Percentages are illustrative and drawn from the examples below.
In this guide
- Who and what
- Full details of the contractor
- A detailed scope of work
- What isn't included
- Money
- Total contract price
- A milestone-based payment schedule
- Define what "completed" means
- Time and change
- Start and completion dates
- How delays will be handled
- A written change-order process
- Materials and people
- Materials and specifications
- Who buys the materials?
- Subcontractors
- Insurance and licensing
- Permits and approvals
- Site management and responsibility
- Finishing and exit
- Snagging and final payment
- Warranties and defects
- If the relationship breaks down
- Before you sign
- The €100,000 question
- 10 questions to ask before signing
- Frequently asked questions
A contract is more than a price
A renovation contract defines what is built, who is responsible, when payments fall due, how changes are approved and how the project finishes.
A renovation contract should establish exactly what is being built, who is responsible for what, when payments become due, how changes are approved, what happens when work is delayed and how the project reaches completion.
For foreign owners renovating in Portugal this matters even more. Language differences, unfamiliar construction practices and informal agreements create ambiguity surprisingly quickly.
A good contract won't guarantee your renovation goes perfectly. It makes it much clearer what happens when it doesn't.
Full details of the contractor
Name the legal entity, its NIF or NIPC, address, signatory, alvará and insurance. The entity you pay must be the entity doing the work.
Start with the basics. Your agreement should clearly identify who you are actually contracting with.
Make sure the entity named in the contract is the same entity receiving your payments and responsible for delivering the work.
A trading name, a first name or a WhatsApp number is not enough for a substantial renovation project.
A detailed scope of work
List every task the contractor is responsible for, with materials, models, quantities or allowances. Vague scopes are the most common source of renovation disputes.
One of the biggest sources of renovation disputes is surprisingly simple: the owner and the contractor thought they had agreed to different things. "Renovate bathroom" is not a scope of work.
One line, one price, and nothing to check the work against.
- Removal and disposal of existing bathroom
- Plumbing modifications
- Electrical work
- Waterproofing system
- Wall preparation
- Tiling
- Sanitaryware installation
- Vanity installation
- Lighting
- Painting
- Final finishing and cleaning
Where possible, specifications should also identify materials, brands, models, quantities or agreed allowances. The more detailed the scope, the less room there is for disagreement later.
What isn't included
Write down every exclusion, such as fees, licensing, appliances, waste removal or VAT. Never assume something is included because it seems obvious.
This can be just as important as what is included. If the price excludes certain work, those exclusions should be written down. Common ones:
Never assume something is included because it seems obvious. Ask:
"What will I need to pay for that isn't included in this price?"
Then put the answer in writing.
Total contract price
State the price, whether it is fixed or an estimate, and whether IVA is included. Price unknowns separately rather than leaving everything open-ended.
The contract should state the agreed price and explain clearly which kind of price it is.
The agreed sum covers the defined scope. Changes only through the written change-order process.
The final sum can move. The contract should say how, by how much, and who approves it.
It should also state whether VAT (IVA) is included. If some elements cannot be priced until work begins, identify them separately:
That is far clearer than discovering halfway through that the contractor considers major parts of the project to be "extras".
A milestone-based payment schedule
Link payments to identifiable stages of progress, not dates, so money never runs significantly ahead of completed work. Keep a final portion until handover.
This is one of the most important parts of your contract. Avoid letting payments get significantly ahead of completed work. Rather than paying by date, connect payments to identifiable stages of progress.
| Milestone | Payment | Cumulative |
|---|---|---|
| Contract signing / mobilisation | 10% | 10% |
| Demolition and preparation completed | 15% | 25% |
| Structural / first-fix work completed | 20% | 45% |
| Plumbing and electrical milestones completed | 20% | 65% |
| Finishes substantially completed | 20% | 85% |
| Practical completion | 10% | 95% |
| Final snagging / handover | 5% | 100% |
| The right structure depends on the project. | ||
Money should broadly follow progress.
If 60% of the project is complete, you do not want to discover you have already paid 90 to 100% of the contract value. Once most of the money has gone, your commercial leverage becomes considerably weaker.
When payments have already run aheadContractor stopped work in Portugal? What to do when your building project goes wrongDefine what "completed" means
Give each milestone objective completion criteria, and on larger projects have an architect, engineer or project manager confirm it before payment.
Payment milestones only work when everyone understands what triggers them. "Bathroom completed" can mean very different things.
Where practical, milestones should have objective completion criteria. For larger projects, you may want your architect, engineer or project manager to confirm a milestone has been reached before the payment is released.
Project start and expected completion dates
Record expected start and completion dates and list what can legitimately move them, such as client changes, approvals, materials or unforeseen structural conditions.
Your contract should identify an expected start date and an expected completion date. It should also address circumstances that can legitimately affect the programme:
The objective isn't an inflexible deadline. It is an agreed programme, and an agreed answer to what happens when that programme changes. For substantial projects, attach a detailed construction schedule as an appendix.
How delays will be handled
Set notice requirements, revised schedules, extensions of time and consequences of unjustified delay, so delay is discussed before the project is months behind.
Suppose your contractor says the project will take six months. Month eight arrives. Then month ten. What happens?
Depending on the project and on legal advice, the agreement may address:
Delay should not first become a topic of discussion after the project is already months behind schedule.
A written change-order process
Approve every material change in writing, recording what changes, the cost, the programme impact, your approval and the date before work proceeds.
Almost every significant renovation changes. You open a wall and find a problem. You decide on different flooring. The architect changes something. The contractor recommends an alternative. That is normal. What causes problems is making these changes informally.
Your contract should explain how variations are approved. Every material change should be documented like this:
Then the work proceeds. No ambiguity.
Materials and specifications
Name manufacturer, range, product reference and price for materials that matter. Where products aren't chosen yet, set a written allowance per unit.
"Premium tiles" is subjective. A specific manufacturer, range, product reference and price allowance is not. Where materials matter, identify them:
If you haven't chosen the exact product yet, establish an allowance:
Floor tiles: material allowanceUp to €45 per square metre, excluding installation. A clear financial assumption for both parties.
Who buys the materials?
Decide whether you or the contractor buys materials, and if the contractor does, how deposits, receipts, markups, delivery and ownership work.
Clarify deposits, receipts, markups, delivery and who owns the materials once paid for. For bespoke items such as windows, kitchens or stone, ask for visibility of supplier orders and payment status.
You control the supplier and the receipt. Agree who checks quantities, accepts delivery and stores items safely on site.
Subcontractors
State who manages each trade and who remains responsible for their work, especially if you contract several trades directly instead of one main contractor.
Many Portuguese renovations involve several trades. Your main contractor may use:
The contract should establish who manages these subcontractors and who remains responsible for their work. If you contract directly with several trades, responsibilities need to be particularly clear. Otherwise:
Insurance and licensing
Ask for the contractor's licence and insurance details in writing and verify them, including alvará or certificate checks with IMPIC where they apply.
Before signing, verify the contractor's credentials and the insurance relevant to the project. Do not simply accept "Yes, we're licensed." Ask for the details and verify them where appropriate.
Depending on the nature and value of the works, Portuguese construction licensing requirements may apply. For relevant contractors this can include checking credentials with IMPIC, the Instituto dos Mercados Públicos, do Imobiliário e da Construção.
remodel.pt personally vets the local contractors it introduces, including their credentials, before you meet them.
Permits and approvals
Assign responsibility for every approval, from municipal processes to condominium consent, and confirm whether work can legally start before each is granted.
Do not assume the contractor is responsible for every approval. The agreement should say who handles:
This matters most for structural alterations, extensions or significant changes. Before work starts, you should be able to answer three questions:
What approvals are required?
Who is responsible for obtaining them?
Can work legally begin before they are obtained?
Site management and responsibility
Agree who controls the site: security, keys, working hours, waste, protection of existing property, neighbours, condominium rules, utilities and cleaning.
For substantial renovations, make clear who controls and manages the site:
These seem minor at contract stage. After six months of construction, they often aren't.
Snagging and final payment
Inspect at practical completion, list defects, have them corrected, then release the final payment. A retained balance is the incentive to finish properly.
"Finished" does not mean every item has been completed correctly. There may still be:
The contract should establish a snagging process:
- Practical completion
- Property inspected
- Snagging list created
- Defects corrected
- Final payment released
Holding an appropriate final portion of the price until agreed completion items are addressed creates a strong incentive to finish the project properly.
Warranties and defects
Set warranty and defect responsibilities in line with Portuguese law, and keep a proper project archive rather than relying on WhatsApp history.
Ask what happens if something goes wrong after completion. The contract should address warranties and responsibility for defects, taking into account applicable Portuguese law. Keep a complete record:
Paperwork
- Contracts
- Invoices
- Receipts
- Contractor information
Technical
- Product warranties
- Technical documentation
- Plans
Evidence
- Photographs
- Approvals
- Completion documentation
Do not rely on WhatsApp history as your project archive.
What happens if the relationship breaks down?
Define serious breach, cure periods, how termination is notified, how completed work and materials are valued, and how the site and money are handed over.
Nobody starts a renovation expecting a dispute. Your contract should still contemplate one, and say what happens afterwards.
What counts as a serious breach?
Must the other party be given time to remedy it?
How must termination be communicated?
How is completed work valued?
What happens to materials already purchased?
What documentation must be handed over?
What happens to money already paid?
How is the site transferred?
For significant projects, review these provisions carefully with a Portuguese lawyer.
If it has already gone wrongWhat to do when your contractor stops work and the project stallsThe €100,000 question
Front-loaded payments can leave you having paid 100% of a renovation that is only 60% complete, with most of the budget gone.
Imagine your renovation costs €100,000. Your contractor asks for €40,000 before starting, €30,000 after demolition and €30,000 halfway through.
Front-loaded schedule on a €100,000 renovation, illustrative
What you've paid
What exists when the contractor stops turning up
Paid 100%. Built 60%.
Now imagine the contractor has cash-flow problems, moves workers onto another project, or simply stops turning up. Your problem is no longer "how do I finish my renovation?" It becomes:
How do I finish my renovation when most of my budget has already gone?
This is precisely why contract structure matters. If you are already in that position, our guide on what to do when a contractor stops work in Portugal walks through the recovery steps.
Ask these 10 questions
If the contract can't answer these ten questions, resolve them before you sign and before substantial money changes hands.
- Is the scope of work sufficiently detailed?
- What specifically isn't included?
- Is VAT included in the quoted price?
- What deposit am I paying and why?
- Are subsequent payments tied to verified progress?
- Who determines when each milestone has been completed?
- How are additional works approved?
- What happens if the project is delayed?
- What happens if either party needs to terminate the contract?
- Is enough money retained until snagging and final completion?
If you cannot answer these from the contract, resolve them before you sign and before substantial money changes hands.
Don't wait until there's a problem
The easiest time to fix a renovation's commercial structure is before construction starts. After a vague contract and a large deposit, options narrow.
The easiest time to improve the commercial structure of a renovation is before construction begins. Once you've signed a vague agreement, transferred a large deposit and work has started, your options get more complicated.
For significant renovations, independent legal and technical advice before signing can be money well spent. And if you're unsure about the contractor, the quotation, the project structure or the payment milestones, get another perspective before committing.
Frequently asked questions
QWhat should a renovation contract in Portugal include?
The contractor's full legal details and alvará, a detailed scope with exclusions, the price and whether IVA is included, a milestone payment schedule, dates, delay and change-order rules, permits, snagging, warranties and termination terms.
QHow much deposit should I pay a renovation contractor in Portugal?
There is no single figure, but the deposit should be proportionate to mobilisation and early material orders. A hypothetical schedule might start at around 10%, with later payments tied to verified progress.
QShould renovation payments be tied to dates or milestones?
Milestones. Payments linked to identifiable, objectively defined stages of progress keep money from running ahead of completed work.
QIs IVA included in a Portuguese renovation quote?
Not always. The contract should state clearly whether the price includes VAT (IVA), and whether it is a fixed price or an estimate subject to adjustment.
QHow should changes to a renovation be approved?
In writing, recording what is changing, the extra or reduced cost, the effect on the programme, the owner's approval and the date. An informal WhatsApp "go ahead" is not enough.
QHow do I check a contractor is licensed in Portugal?
Ask for the alvará or certificate details and verify them with IMPIC, the Instituto dos Mercados Públicos, do Imobiliário e da Construção, where they apply to the works.
QWhat is snagging and why does it matter for the final payment?
Snagging is the list of defects found when the property is inspected at practical completion. Holding a final portion of the price until those defects are fixed gives the contractor a reason to finish properly.
QWhat happens if my contractor stops work after I've paid?
Stop further payments, get an independent assessment of the work and cost to complete, document everything and take Portuguese legal advice before terminating. Our guide on what to do when a contractor stops work covers each step.
Kellogg is a former payments executive turned entrepreneur, with a family background in real estate. He has spent the past year bringing that experience to the Portuguese property market, and co-founded remodel.pt to apply the same rigor to how contractors are vetted.
This article provides general information about renovation projects in Portugal and is not legal advice. Contract requirements and legal rights depend on the circumstances of each project. For advice on a specific contract or dispute, consult an appropriately qualified Portuguese lawyer.
Last updated 7 October 2026