May 14th, 2021, coordinator of the real estate area of Tortoro, Madureira & Ragazzi Advogados.

Despite the world crisis resulting from the COVID-19 pandemic, contrary to other important sectors of the economy, the national real estate market has been presenting positive figures.

This result arises from fundamental factors, and without them we would not be able to reach the sector’s significant result. Among them, we can highlight the concession of credit for financing construction works and the acquisition of real estate.

For quite some time, the real estate financing has stood out in the market because of its low cost, often with interest rates below 1% per month.

This is due to the robustness of the guarantee used to make such credit feasible, i.e., in the event of default, the property that is the object of the contract will be responsible for the losses to be borne by the financial agent.

This same system takes place not only for the acquisition of real estate by the final consumers, but also for real estate developers who need to obtain credit for the realization and subsequent marketing of their developments.

For a long time the main form of guarantee practiced between the developers and the financial agents was the mortgage.

Since this guarantee was included in the list of security interests, in the event of default, it was expected that the property encumbered with such guarantee would account for the outstanding balance, thus minimizing the risk cost for the construction financing agent.

However, after the enactment of Precedent 308 by the Superior Court of Justice, the Judiciary Branch has established the understanding that the mortgage guarantee agreed upon between the construction company and the financial agent did not produce effects on the purchasers of the real estate units.

In short, this understanding annulled the previously existing guarantee in favor of the institution responsible for releasing the credit, with any loss being subject to court enforcement, which will only be successful in the event that the debtor has other assets.

In practice, the application of the understanding established by STJ Precedent 308 removes the mortgage from the list of security interests, in view of the lack of collateral for the credit released.

As a direct consequence, there was an increase in the cost of credit, obviously passed onto the final consumers.

Aiming to enable the resumption of the low cost of credit, the market sought solutions to minimize the risks of occasional default, finding in the fiduciary alienation a safe way to receive the released credits.

Unlike the mortgage, as the name itself suggests, the fiduciary alienation consists in the transfer of the terminable property to the creditor as a guarantee of the amounts released.

Upon discharge of the obligations, the guarantee is cancelled at the property’s registry, and full ownership is transferred in favor of the purchaser of the property.

However, in the event of default, the creditor financial institution is responsible for initiating the procedure for out-of-court enforcement, to be carried out before the Real Estate Registry in order to enable compliance with the legal requirements and confer legality to the act.

However, in analogy to the understanding established by the STJ about the mortgage collateral, the Court of Justice of the State of São Paulo, as well as the Superior Court of Justice (Special Appeal No. 1576164/DF), have been producing the understanding that any fiduciary alienation entered into between the financial agent and the construction company would not be valid with respect to third party purchasers.

However, some important considerations must be made.

Differently from the mortgage, the lien and encumbrance created by the formalization of a fiduciary alienation mandatorily involves the transfer of ownership of the property to the creditor’s estate.

It is worth mentioning that such a transfer derives from a legal requirement, and this action is duly registered in the property’s registry.

Well then, with the property now becoming part of the financial institution’s assets, how would it be possible for the developer to (formally) sell an asset that no longer belongs to them?

The answer is simple: legally, such a possibility does not exist, unless there is the consent of the fiduciary creditor.

As if the legal impossibility of the business deal entered into between the developer and the third-party purchaser were not enough, what causes the greatest indignation in the application by analogy of Precedent 308 to cases of fiduciary alienation lies in the fact that the Judiciary Branch gives better rights to the private instrument of purchase and sale promise entered into between the purchaser and the developer to the detriment of the fiduciary alienation agreement (with the force of a public deed) entered into between the financial agent and the developer, duly registered in the records.

It is certain that this understanding aims to safeguard the rights related to housing and human dignity.

However, by safeguarding the rights of a few (only those in a position to legalize the impasse), ironically, the Judiciary Branch ends up harming the largest portion of the population, since that as a result of legal uncertainty the cost of credit will certainly increase, affecting everyone.