A Brief Comparison Of Legal Regulations On Shopping Centers In Brazil And Portugal

Originally published in MORAIS LEITÃO, GALVÃO TELES, SOARES DA SILVA Briefing, March 2012

BRAZIL

According to the Brazilian legal regime, the use and the occupation of land, as well as urban zoning, are regulated by municipal rules. As a rule, there is no specific regulation applicable to shopping centers. Prior to the beginning of the construction works, it is mandatory to obtain a Construction Permit from the competent municipality, which allow the obtaining of the Occupancy Certificate, once construction works are completed. Along with these permits , for regular operation,shopping centers require a fire inspection certificate, as well as an operating permit issued by the local municipality. Depending on the municipal legislation, the referred permit may be issued for the shopping center or for each one of the shops. Other permits may be required by the competent authorities depending on the type of project and the municipality in which the project is located.

A shopping center may be established on a property represented or by one land title (one autonomous unit) or under a building condominium system (a horizontal property in the Portuguese Law, or the so called "condominio edilício" in Brazilian Law), in which each shop has its own registration. In both cases, the shopping center can be held by different people in a civil condominium in which each co-owner have an ideal fraction of the entire shopping center or of each shop, as appropriate.

In general, the shops are leased, being that the conditions of these agreements can be freely established between the parties in the terms provided by article 54 of the lease law (Law 8.245/91).

In this manner, it is customary that each shopping center has the following instruments which regulate it: (a) Civil Condominium Convention, (pro indiviso) that describes the relation between the co-owners, establishing, among others, the quorum for new investments, the distribution of profits and expenses, and the exercise of preemption rights (right of first refusal) between the co-owners; (b) Declaratory Term of General Lease Rules, which deals with the relation between the tenants and the entrepreneurs of the shopping center; (c) Internal Regulation which establishes the operation rules of the shopping center; (d) Statute of Retailers Association and Promotion Fund and Promotion Fund, which establishes the relations between the retailers with special focus on how to promote the shopping center jointly...