Understand the regulations for the cancellation of real estate
The unstable economic moment that the country has been going through in recent years has been reflected in an increase in the number of properties canceled, which is the jargon that refers to the abandonment of the purchase or sale of the property in the plant.
A study by Abrainc (Brazilian Association of Real Estate Developers) shows that, in 2016, there were 37,702 breaches of this type in Brazil. The number corresponds to about 43% of the total properties sold. Historically, until 2014, this percentage used to be around 20%.
This increase put pressure on the development of an agreement that offers more security to companies in the real estate market. At the same time, there is a need to reduce the number of cases relating to the problem that are currently in the courts. Since last year, conversations between the private and public sectors have been developed with the intention of establishing a regulation that supports the real estate sale.
At the beginning of August, the negotiation generated a draft (that is, an initial, non-definitive text) for a provisional measure. The document is the result of a discussion developed in a working group that includes the Brazilian Chamber of the Construction Industry (Cbic); the Brazilian Association of Real Estate Developers (Abrainc); the National Consumer Secretariat (Senacom), an organ linked to the Ministry of Justice; and the Ministry of Planning.
There is still no judicial measure approved for the matter. We explain, below, the content of the draft, which should guide the decisions that will be taken soon.
What is a real estate cancellation?
Technically, the contractual termination is defined as the act that terminates a legal relationship established between the parties - buyer and seller. This applies to properties purchased at the plant or from third parties. When one of the parties decides to terminate the agreement, it must prepare the cancellation to notify the opposing party, stipulating the conditions under which this termination will be executed.
These conditions may concern, for example, the return of amounts, fines and terms . When these rules are not set out in the contract or are unsatisfactory, it may be necessary to take an extrajudicial action. The cancellation is applicable when the buyer is no longer able to afford the expenses or gives up on the acquisition of the property before the key delivery period.
What is being agreed upon?
Negotiations with the government relate, in particular, to real estate purchased at the plant. The conversation develops in order to establish rules that reduce the damage on the part of the developers without harming the buyers.
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So far, the agreement states that, if the buyer withdraws, the developer may retain up to 50% of the amount paid. This is as long as the amount does not exceed 10% of the total value of the property.
In the event of default of more than six installments, the developer may retain up to 50% of the amount paid. For debts between three and six installments, the ceiling drops to 30%. Here the same rule would apply: the maximum amount of the retention is also limited to 10% of the total price of the project.
The draft also addresses the so-called right of repentance. The consumer could give up, in up to seven days, of a purchase made at a sales stand.
From the point of view of the duties of the construction company, the proposal restricts the grace period for returning the amount within 90 days, establishing the percentage of 0.5% fine in case of delay. If the construction company takes more than six months to make the refund, the buyer can break the cancellation and go to court.
Negotiation status of real estate cancellation
The draft, which does not have the force of law, will serve as a basis for preparing the final proposal, which is being developed. The text is still controversial. Some professionals interpret it as unconstitutional for facing up to consumer rights. If approved, the provisional measure takes immediate effect, although it depends on the approval of the National Congress to be transformed into law in a definitive way.