Legal Changes In The Real Estate Sector In 2019 – Multi-Ownership And Termination Agreements

On November 20, 2018, Federal Law No. 13,777 was passed, establishing a new form of condominiuma "multi-ownership" condominium. Multi-ownership allows the co-owners of a property to each use it for a pre-determined period of time as its single owner. Each "time fraction" is indivisible and bound to the right of use of the property for periods not less than to 7 days, which can be fixed and determined or change from year to year. The institution of the multi-ownership must be registered in the property's certificate at the real estate registry office with the indication of all time fractions established to each multi-owner and the correspondent occupation periods. Individual certificates and taxpayers' numbers will also be created and assigned to each time fraction of the property. Furthermore, a multi-ownership condominium must have condominium bylaws, which will rule the use of the property by each multi-owner and their proportional contribution to the costs of maintaining and managing the property. Each multi-owner may freely assign and lease their time fraction as well as sell or encumber it. If selling or encumbering, they must inform the condominium administrator. The other multi-owners are not entitled to the right of first refusal in the sale, except if that is provided in the multi-ownership condominium bylaws. Dissolution or Termination of Purchase and Sale Agreements of a Unit of a Real Estate Development or a Land Parcel, Federal Law No. 13,786 On December 27, 2018, Federal Law No. 13,786 was passed. Under this law, when an agreement between a real estate developer and a unit's buyer is terminated by dissolution or rescission due to the complete default of the buyer's obligation as per the agreement, the buyer is entitled to the restitution of the amounts already paid to the developer, increasing and/or deducting, whichever applies, the amounts stipulated in the law. The penalty due by the buyer must not exceed (i) 25 percent of the amounts paid, if the development is not subject to segregated estate, or (ii) 50 percent of the amounts paid, if the development is subject to segregated estate. The real estate developer must make the restitution in a single installment no later than (i) 30 days from the issuance of the occupancy permit, if subject to segregated estate; (ii) 180 days from the undoing of the agreement, if not subject to segregated estate; or (iii) 30 days from the resale of the dissolute unit, if prior to the other...