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    New rules for withdrawing from property purchase provide more legal certainty

    Novas regras para desistência de compra de imóvel trazem mais segurança jurídica

    Claudio Ribeiro Sandoval Filho, real estate law expert at Tortoro, Madureira & Ragazzi Advogados

    Published in O Estado de S. Paulo, on January 11, 2019

    Due to the absence of specific legislation on this matter, the buyer of a particular real estate development is often subjected to unconscionable practices of developers when dealing with withdrawal from business.

    In order to provide greater legal certainty for purchasing real estate property of the plan, especially with regard to the reimbursement of amounts paid, the chamber of the House of Representatives approved the final text of Bill No. 1220/2015, which provides objective and automatic rules, avoiding the need to resort to court.

    The legal text regulates contract termination due to default of the property buyer – the so-called real estate contract termination – creating rules about the amounts that may be withheld by the developers, as well as amounts that the buyers should receive, among other relevant issues.


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    Among the main project advancements, we highlight the fixing of a percentage of the amounts to be refunded to the buyers in the event of contract termination, by means of contract rescission or dissolution for default.

    The approved Law ensures buyers wishing to withdraw from the previously agreed upon business, the reimbursement of installments that range between 50% and 75% of the total amount paid.

    If the development has its equity separated from the developer, by means of a surety bond, the buyer will be entitled to a refund of at least 50% of the percentage paid to the construction company, less amounts established by law, such as real taxes, condominium quotas and the amount corresponding to the usufruct of property.

    On the other hand, if the development’s equity is not guaranteed by a surety bond, the conventional penalty cannot exceed the 25% limit.

    Another important point covered, frequently the object of lawsuits, was the provision regarding delay in delivering the property. If the delay is up to 180 days over the original deadline, it will not cause the developer to pay indemnity, nor will the buyer have grounds to terminate the contract, provided that expressly agreed, in a clear and prominent manner.

    If the time limit is exceeded, provided that by the sole fault of the developer, the buyer may terminate the contract and will be reimbursed in full, without prejudice to the fine established.

    However, if the buyer chooses to maintain the contract, the buyer will be entitled, as indemnity, to 1% of the amount paid to the developer, for each month of delay, monetarily adjusted.

    Therefore, Bill No. 1220/2015 seeks to provide greater legal certainty to contracts for deed, safeguarding the developers’ equity from unexpected events arising from the buyer’s default, and providing greater protection to buyers, inhibiting unconscionable practices, such as the withholding of all of the amounts paid, being the law now only subject to the president’s approval for coming into force.

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