Real Estate Sector Regulation

Regulations Relating to Real Estate Activity

Our real estate activity is regulated by different matters, such as the developer’s obligations, restrictions imposed by zoning laws (parceling, land use and occupation), master plans or by environmental protection laws.

The area relating to the ownership of real estate is regulated by the Civil Code. Aiming to provide greater security in the sale of real estate, as well as in the constitution, transfer, modification or waiver of real rights over real estate, the act only operates with the presence of restricted legal formalities.

The real estate activity, in the sale of units to final consumers, is also impacted by Law 8078/90, or “Consumer Defense Code” and Law 13,786/2018, or “Retirement Law”, which bring elements of protection to purchasers , as well as the specific rules about the contract and its termination and the right of repentance.

Real Estate Development

The development activity refers to the realization of a real estate project.

Therefore, according to article 28, sole paragraph of Law 4591, of December 16, 1964, (Incorporation Law), real estate development consists of the activity carried out with the purpose of promoting the construction, for total or partial disposal, of buildings or set of buildings composed of units, by means of sale and purchase agreements, or effective sale and purchase, of ideal fractions of land, linked to future units, in buildings to be built or under construction under condominium system, making them responsible if the developer delivers, within a certain period, price and under certain conditions, the completed works.

The Incorporation Law regulates the obligations of the developer, among others:

Only negotiate the sale of units under construction after having obtained the registration of the incorporation in the registration of the land at the Real Estate Registry Officer, whose application must be accompanied, mainly, by the following documents: a) title deed for the land, or irrevocable and irreversible promise of purchase and sale duly registered; b) clearance certificates for federal, state and municipal taxes, protest of titles, civil and criminal actions and liens on the land, land sellers and the developer; c) construction project duly approved by the competent authorities; d) calculation of the areas of the buildings, specifying, in addition to the global one, that of the common parts, and indicating, for each type of Unit, the respective built-up area; e) descriptive memorandum of the specifications of the projected work; f) discrimination of the ideal fractions of land with the Units that will correspond to them; g) draft of the future condominium agreement that will govern the building;

  • supervise the construction of the project foreseen in the contract and in accordance with the approval granted by the government authorities;
  • obtain the certificate of completion (“Certificate of Occupancy”) of the enterprise;
  • make the specification and institution of the building condominium, so that each unit can have its exclusive owner, registering the built area of the enterprise; and
  • deliver to the acquirer the completed units, in accordance with the contractual specifications, and transfer to the acquirer the property right of the unit, through the drawing up of the public deed of sale and purchase.

The purchaser’s main obligation, in turn, consists in paying the price related to the ideal portion of the land and the construction.


The construction of the incorporated enterprise can be contracted and paid for by both the developer and the final purchasers of the units.

Articles 48 et seq. of the Incorporation Law provide for two construction systems for the buildings object of incorporation: construction by contract and construction by administration.

Construction under the contract regime can be of two different types, one at a fixed price, agreed upon before construction begins, and the other at an adjustable price, by indices previously determined by the contracting parties.

In construction by administration, the purchasers of properties under construction are responsible for paying the full cost of the work, in the form of apportionment of monthly expenses made by the developer or the builder, with no previously determined price for the construction, but only an estimated price.

Segregate Estate

According to the Incorporation Law (Law No. 10,931/04), the developer is entitled to submit the real estate development to the allocation system and the special tax regime (RET), which establish several rights and obligations to the developer, resulting in greater protection to the purchasers of the real estate units and to the bank financing the work.

The affected property segregates the land, the works carried out on it, the financial resources and all other assets and rights linked to it from the property of the developer, which can only be used for the achievement and delivery of that particular real estate project.

Thus, the enterprise subject to the equity will be responsible only for the obligations related to the execution of its works and delivery of the finished and finished units to the purchasers, not communicating with other rights, debts and/or obligations of the developer or other incorporations.

Since August 2010, Even affects the equity of all real estate projects launched. In addition, it uses specific purpose companies (SPEs) formed to carry out specific real estate projects, whose purpose is the total segregation of rights and obligations of each of the real estate projects carried out. Therefore, it reinforces the security of the affected assets and also presents itself as a more efficient and transparent structure for cases in which the company acts in partnership with third parties.

Chattel Mortgage

Law 9.514/97 instituted the chattel mortgage of real estate with the purpose of facilitating real estate financing in general.

With the fiduciary sale mechanism, the creditor holds ownership of the assets pledged by the debtor. According to article 25, upon full payment of the debt to the creditor, the fiduciary property is dissolved, and the creditor must issue the term of discharge, which will be taken to the Real Estate Registry Office for cancellation of the fiduciary property registration, and the debtor will then own the property.