Acquisitions And Leases Of Rural Properties By Foreigners

Real Estate

The Brazilian National Institute of Colonization and Agrarian Reform (INCRA) published on December 14, 2017 the Normative Ruling No. 88 (INCRA NR 88/2017), which changes the procedure for INCRA's review of the acquisition or lease of rural properties by foreigners in Brazil. INCRA NR 88/2017 repealed and replaced INCRA Normative Ruling No. 76, of 2013.

INCRA NR 88/2017 did not change or soften the restrictions for the acquisition or lease of rural properties by foreigners in accordance with the legislation in force, nor did it establish a maximum term for INCRA to conclude the analysis of the authorization requests. The new ruling clarified some aspects regarding the approval process, especially in relation to (i) the conditions, documents and information required for approval; (ii) track by INCRA of transactions involving rural properties carried out by foreigners, and (iii) the regularization procedure for transactions that do not comply with the relevant legislation. The main changes brought by NR 88/2017 are summarized below:

Regularization Procedure. INCRA NR 88/2017 established a new regularization procedure for acquisitions or leases concluded in disagreement with the restrictions imposed by Federal Law No. 5.709/71. Such transactions may be now validated after the analysis of thefeasibility and legality of the request by INCRA. The acquisitions and leases implemented until December 14, 2017 are eligible for regularization. However, INCRA did not establish any term for the regularization request to be presented. Appeal. INCRA NR 88/2017 provides the interested party with the ability to file an administrative appeal in case a request is denied by INCRA. The appeal should be addressed to INCRA's Regional Superintendence, which may reconsider the decision within five days. If such appeal is denied, the interested party may further appeal to INCRA's Regional Decision Committee, which will have 30 days to render a decision. In the event of another denial, the interested party may resort to the General Coordination of Rural Land Enrollment, which shall grant a decision within another 30 days. Null and Void Act. The NR confirms as null and void the acquisitions and leases carried out in disagreement with Federal Law No. 5.709/71,1 but it carves out exceptions. Among the exceptions, INCRA establishes that the following cases should not be annulled (i) third party acquisitions carried out in good faith, which conditions for...