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7 DOCUMENT ISSUES REQUIRING ATTENTION WHEN BUYING REAL ESTATE IN BRAZIL

Purchasing real estate in Brazil is something many investors and savvy people want to do. Who wouldn't like to take advantage of paying cheap for real estate in a developing country like Brazil? However, buying real estate in Brazil requires attention to a series of document-related issues. To become a legal owner and avoid legal troubles, it is necessary to go through a paper bureaucracy and do everything as the law requires. Check out some document-related issued requiring attention at the time of purchasing real estate in Brazil!

1. Verify the Seller's Documents

The Seller must provide documents. If the seller is a legal entity, that is, a company, it must submit these additional documents:
• Copy of Corporate Taxpayer Registration (CNPJ);
• Certified copy of the Articles of Incorporation/Bylaws;
• Documents registered under the Trade Board with regards to modifications in the Articles of Incorporation/Bylaws;
• Federal contribution taxes clearance certificate; and
• Clearance Certificates.

2. Obtain the Following Seller's Clearance Certificates:

• Notary Public Office for Registry of Deeds;
• Civil procedures;
Bankruptcy and composition with creditors;
• Labor Justice;
• Social Security Contribution Clearance (CND/INSS by its acronym in Portuguese; debts);
• Municipal and State tax executives; and
• Federal Justice.

3. Verify the Real Estate Documents

• Property title with register;
• Real estate liens clearance certificate (proving the real estate is free of debts);
• Urban real estate tax (IPTU by its acronym in Portuguese) clearance certificate;
• Construction annotation attached to real estate registration;
• Register of reinstatement actions and sales (proving the real estate was not informally sold);
• Copy of slip with register and assessment fees (TCA by its acronym in Portuguese) payment registration;
• Certificate of Occupancy (use permit);
• Floor plan;
• Emphyteutic Certificate (for buildings set out in a leased land);
• Technical Responsibility Note (ART by its acronym in Portuguese) of the engineer in charge of the work; and
• Purchase and sale option agreement duly fulfilled, dated and signed.

Not always you will have such documents available, but a diligent buyer won’t open his wallet before a full due diligence has been properly done.

4. Get Your Own Documents in Place

In order to acquire real estate property in Brazil, a foreign purchaser must also supply documents such as:
• Copies of ID Card, Taxpayer ID (CPF, which may be obtained in a Brazilian consulate, marital status certificate and prenuptial agreement public deed;
• Federal tax clearance certificate (if the purchaser is a trader); and
• Clearance certificates (usually not applicable if you are not looking for finance, which is actually very difficult for foreigners to obtain from abroad).

5. How to Make a Purchase and Sale Agreement

This document must be made under the advice of a specialist lawyer like our firm and must contain:
• Basic data of seller and purchaser (names; ID Card No., Individual or Corporate Taxpayer No., Voter's Card no. and profession);
• Real estate value;
• Payment method (cash, bank financing if any);
• In the case of financing: input value, installment terms and amounts, including interests;
• Penalties (in case of rescission, delays in real estate delivery or properties delivered in conditions different from those established);
• Proportion of furniture included in the real estate (if applicable); and
• Broker/real estate company commission.

6. Tips to Assess the Seller’s credibility

In order to verify appropriateness, find references on the seller. Verify what projects it is involved with, what institutions it works with and whether other undertakings from the same seller or company were delivered within the established terms and conditions.

Many foreigners contact our company after being deceived by a fraudulent seller of real estate in Brazil. Unfortunately, they usually do so after paying substantial money to the fraudster. As it is usually difficult and expensive to track and sue such fraudsters, most of the time these foreigners will NOT be able to recover their money. Thus, you got to do your home-work first and make sure you are dealing with a legitimate party!

7. Be Patient and Never Fall into the “You Got to Rush” Trick

Tricksters operating in Real Estate will usually rush prospective foreign buyers into the transaction. They know that a due diligence would quickly reveal their evil essence, so they rush the buyer in order to avoid a due diligence to become time feasible!

Don’t fall for that. Brazil is a huge country and there are plenty of opportunities for you to explore.

Bottom-line is do your homework checking on the seller’s and the property’s documents before opening your wallet. Our real estate due diligence services start as low as USD 1,200.00 per property.

Pay attention to these tips and you will certainly multiple your chance of a successful acquisition in Brazil.

FOR A QUOTE ON YOUR CASE

Please email us at info@oliveiralawyers.com for a quote or question about your specific needs. Calls will be handled by our secretary and may take longer to be returned than emails.