What documents should be checked when you buy property in Brazil?
How to avoid unwanted surprises when buying property in Brazil.
To make sure that the purchase of your real estate will run smoothly and without any unwanted surprises, it is necessary that before purchasing your property, a complete analysis be made of both the sellers and the property that you plan to buyj.
Most Important Documents needed for property transaction analysis:
1. Updated Property Registration (Matrícula in Portuguese):
First, it is necessary to verify whether the property belongs to the person who presents himself as the owner. To do so, requesting an updated registration (matrícula) from the Property Registry of the competent real estate district is essential. It will contain the history and basic information about the property, such as size, location, name of current and former owners, and existence of real estate encumbrances, among other important information;
2. Certificate of Ownership in the seller’s name:
Check the documents that the seller has to prove his/her ownership. These documents can be of various types, but the most common is the Deed of Sale (escritura de Venda).
3. Certificate of Real Estate Encumbrances:
This must be requested at the Real Estate Registry and consists of an analysis carried out by the Registrar himself, whose content will indicate whether there is any encumbrance, such as a mortgage or third-party right;
4. Tax Status Certificates:
These documents prove whether taxes were paid correctly and whether there are any tax debts related to the property;
5. Certificate of No Condominium Debts:
According to a recent understanding of the Superior Court of Justice – SPECIAL APPEAL No. 1,731,128 – RJ (2017/0138801-0), if the property is part of a formally constituted condominium, the debt consists of an obligation propter rem (arts. 1,334, § 2, CC; 1,336, i, CC and 1,345, CC). Therefore, when purchasing a property with condominium debts, you will be the one who will have to pay the debt, even if it was originated by the previous owner. Furthermore, article 4 of Law 4,591/64 requires a certificate of condominium debts.
7. Negative Certificate of Social Security and Labor Debts of the condominium:
This is important because, according to the understanding of the 3rd Panel of the STJ in Special Appeal 1,486,478, it is possible to redirect the execution of the condominium’s debt against the condominium owners after all attempts to seize the condominium’s assets have been exhausted.
8. Negative Certificate of Public Utility and Listing:
This will be used to find out whether the property in question has not been listed as a historical, environmental or artistic heritage site, as well as whether it has not been declared of public or social interest for the purposes of expropriation.
9. Energy, water, and gas debts:
Check whether there are any outstanding financial debts with the electricity, water, and gas companies.
10. Existing Lawsuits or Debts of the owners
Certidão de distribuição: This is a certificate that shows whether there are any ongoing legal actions against a person in a specific jurisdiction. It often indicates whether claims or lawsuits have been filed.
Certidão negativa: This translates to “negative certificate” and signifies that there are no outstanding legal issues (like debts, lawsuits, or criminal records) against the individual or entity in question.
Both certificates serve to provide verification of legal status but focus on different aspects.
This list contains the most important items but the final list of documents needed depends on the type of property being bought.
Penthouse in Rio helps its clients properly manage these risks.