Real Estate Acquisition In Brazil - A Brief Summary

There has been a large amount of real estate investments in Brazil in the last years. Not only large investors have been appreciating the hotel and shopping center areas, small investors have been viewing the Brazilian environment as a great opportunity for retirement plans. Thus, either in large or small proportions, the Brazilian real estate market has been in great development.

Investments can be made by individuals or by foreign or national companies. In Brazil the most common practice is limited liability companies - Limitadas. The acquisition of real estate through Brazilian Companies is very much used for tax and inheritance reasons. Also, direct investment in Brazilian Companies may grant the right to permanent visa requirements (50,000 US dollars for individual investors or 200,000 US dollars for entities)1.

Rules that are usually applicable include the Brazilian Civil Code, Public Register Law (Law 6015/73), Lease Law (Law 8245/91), among others.

The Public Register Law established a system. There are many Real Estate Registrars whose "jurisdiction" is defined according to the location of the real estate property. Such registers have listed a description of the property (all real estate properties have a registration number), all previous and present owners, third party rights (as mortgages, liens, encumbrances or burdens) and other information. Any transfer or burden incurring upon real estate must be recorded at this Registrar. Transfer and other deeds shall always be executed by the parties (or its representatives) before a public notary and then recorded at the Real Estate Registrar.

Thus, to evidence the ownership of the property, a certificate is issued by the Registrar, which includes the owners and transfers during the last 20 years as well as any encumbrances, liens and burdens incurring upon the property. This document is publicly available. As this document is issued by due empowered authority, there is no need for any insurance regarding transfer of real estate. In fact, there is no title insurance product available by Brazilian insurance companies.

However, there is no State guarantee of title. Thus, it is important that a legal counsel analyzes this document to verify if all transfers were duly made (if not all future transfers may be cancelled) in accordance to the law and in their due powers.

Other documents that are necessary for the transfer (and shall be required by the notary when drafting the agreement) are...