Legal Aspects of Acquiring Real Estate in
Defining moments and timing are always the catalyst for any real estate opportunity and the right moment for investing in real estate in
Investing in real estate in
The first thing a foreigner needs to do, is to apply for a CPF number. CPF stands for “Cadastro de Pessoa Fisica”, which is, in rough terms, is the Brazilian version of the American Social Security. Only with this document that you will be able to purchase real estate, open a bank account (visa restrictions apply), etc. That can be done by an attorney in Brazil or personally throughout the Brazilian Embassies and Consulates spread all around the world; but please be advised that the last option usually takes a few months and that there are no guarantees for the issuance of the CPF, whereas the first option, usually takes 48hs and is much safer.
The second step is to procure reliable professionals to assist you, meaning, experienced, and most importantly, licensed real estate agents and attorneys. It is never recommended to purchase real estate without the assistance of experienced professionals, needless to say in a foreign country.
In Brazil specifically, due to the innumerable searches and certificates (“certidões”) in various courthouses and registries (“cartórios”) one must go in order to verify the authenticity and security of the property, along with the legal analysis of all these documents, it is literally impossible for a do-it-yourselfer to fulfill all of these obligations and procedures properly in order to have his or her rights safeguarded.
Also, special attention should be given to the purchase and sale contract, once it must be done in accordance to federal, state and municipal Laws and they do vary from one location to another. Another aspect is the registration of the contract at the proper registry, in order to avoid multiple sales. Some crooked sellers may sell the property many times if the contract is not registered in the proper “cartório”, leaving the buyer(s) with a complex lawsuit in their hands. Also, there must be a clause in the contract for the registration, so please pay special attention to this, as Brazilian realtors often leave this out.
Very important also is the international money transfer. Due to money laundering regulations, a transfer must follow some rules/laws. For a transfer to be accepted and legal it must be done through “Banco Central do Brasil” and the parties must produce a properly executed and registered contract for purchase and sale with a clause mentioning such transfer pursuant to the “Banco Central” rules for real estate transactions. Please be aware that Brazilian Realtors and Brokers do not know these rules and clauses; please consult with your attorney and have it written in the contract accordingly.
This has also extremely importance when becomes your time to sell your property, either to purchase another one or to take your money back to your home country. If your first transfer did not follow the rules, “Banco Central” will not allow you to transfer this money back to your country, as this could be considered a felony crime named “Evasao de Divisas” and the Brazilian IRS (“Receita Federal”) would, most likely, get involved on it as well and you, definitely, don’t want that to happen.
Basically, when purchasing real estate in Brazil the two most important things are; get professional assistance either from a licensed realtor or broker, and have an attorney do a thoroughly title search. There is always the possibility to purchase title insurance. Homeowners, investors and lenders in the
Assuming that the buyer hired a qualified attorney and/or purchase title insurance for the property, there are no further worries and buyer should be able to take advantage of the joys of living in
Nevertheless, after purchase, homeowners still have legal obligations. Just like in any other part of the world, after the purchase the new buyer will be responsible for paying property taxes annually. In
For those properties with a homeowners association, the maintenance shall be promptly paid as well, as fines for lack of payment may be up to 20% plus interest on every monthly missed due.
In conclusion, if a foreigner seeks the assistance of experienced professionals, follows the proper procedures to purchase real estate pursuant to the Law, it is very unlikely he or she will suffer any type headaches during or after the purchase process.
For further information or should you have additional questions, feel free to contact me at the numbers below.
Jose C. Santiago
Licensed Attorney –
Certified Title Attorney –
Licensed Real Estate Agent –
Certified Paralegal – USA