Wednesday 18 December 2019

Registering a house in Brazil

I posted some time ago about my house hunting in Brazil (House hunting in Brazil) and my paranoia about getting legal title when most properties did not appear to have any. I have a friend who bought a piece of land (two adjacent plots) 10 years ago with the intention of building a house, which would also serve as a language school, as at the time she was renting and not making enough to finance the construction as well.
To cut a long story short she was away for 6 years trying to raise enough money teaching in Europe to finish the construction - having only completed the foundations and the ground floor walls, no roof, before she left. Due to a change in circumstances she is now planning to sell the property, but like most here does not have title deeds (escritura), though she does have a legal document, which is a "Promesa de compra e venda" - Promise of sale and purchase. These are drawn up before final registration, and are legally binding between the two parties - the seller promises to transfer ownership of the property when the buyer finishes paying for it. Often land purchases are made in instalments, not necessarily with a legal mortgage but simply (ir)regular payments made by the buyer to the seller, so this document means the buyer retains title until payment is made in full, but guarantees that he transfers title upon completion! The process could take years.
The problem my friend is having is that this "promise" was made 10 years ago, and while still legally binding - and she paid in full at the time! - the land where she is was never zoned for residential building, and still, apparently, has not been formally scheduled as such by the local authorities. She went to the local land registry and was told that they cannot register her title, but that she could sell on the land - with another "promise" document, and the original vendor would still be liable to register the title in the new buyer's name, when and if registration become possible. It turns out that she, too, did not buy from the original seller (who was himself a lawyer!), but from the person he sold the plot to originally!
People here have an in-built distrust of the legal profession, so much of the legal processes are done at a "cartorio" (registry office), rather than using solicitors. When someone passes away often they die intestate (no will) so there is then a battle between the heirs - large families so could be several sons/daughters and even ex-wives/partners - and they will all try and lay claim to any land, often selling off plots rapidly to raise money. Two or three children sometimes sell the same plot, leaving future problems for the buyers, or the oldest child (or a brother/spouse/etc.) may come along later and claim that they were the real heir! All of these could be avoided by using solicitors, having a will, and so on - but without this "protection" it makes for years of litigation!
The land is officially in an Environmental Protection Area, so should never be zoned for residential, but there are around 100 houses in the area, most, if not all, without proper legal title - and some are large multi-bedroomed guest houses. Others are paying local council taxes, and have electric and water supplies, but IBAMA (Brazil's environment agency) is not happy that the council are allowing this construction to occur, and may, if they get government backing, take action against the "land" owners, though they have been trying for years. It is more than likely that they will have to back down and allow the council to zone it as residential, and then permit registration of title, but this could still take some years.
Everyone goes along believing that the system will eventually prevail and they are safe buying property on these "promises", and that they can register proper title at some later, unspecified date, which is something that I could never do!

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