The earthquake of November 1, 1755 almost completely destroyed the houses within the walls of Albufeira Castle. For this reason, Judge José de Mendonça, in the second half of the 18th century, had his palace built on his property outside the walls and further away from the coast.
Above the main door is his coat of arms, awarded in 1773, indicating the four noble families from which he descended, the Mendonça, Vieira, Matos and Moreira families.
The current stores on the ground floor used to be stables and warehouses for agricultural crops. At the back of the house, the arch gave passage over Rua dos Arcos to the estate's orchards.
In 1779, the Judge was appointed Ombudsman of Alagoas and left for Brazil, from where he never returned, later becoming a Judge in Baía and achieving great wealth. Several of his descendants were distinguished with titles of nobility in the Brazilian Empire.
In 1812, he donated his property in Albufeira to his brother Colonel Bernardo de Mendonça, Captain Major of Albufeira.
The Casa dos Arcos preserves the memory of the reception given to Queen Amélia by the Viscounts of Orada on her visit to Albufeira in 1902.
After the death of the Viscounts of Orada in 1917, the palace remained in the possession of family members until the present day.
It remained a family residence until 2017, when a refurbishment project began, seeking to renovate and maintain the design of the house. This year it opened to the public for the first time as a Guesthouse. Its aim is to provide its guests with a unique experience.