The Closing Process in Brazil
By Jose Santiago
Here is a description of the closing process that takes place in Brazil, when buying property.
1. It all starts when the seller signs a purchase and sale contract, known in Brazil as the "Intrumento/Compromisso Particular de Venda e Compra". Although, the agreement is the first step, the purchase and sale agreement is very important, as its contents will serve as the guidelines for the entire transaction. Therefore, it is fundamental that you know and understand all of your rights and obligations under it. Upon execution of it the buyer usually pays a deposit in order to show good faith and to finalize the execution of the binding purchase and sale contract. In Brazil, the buyer usually pays the seller directly, as there are no escrow accounts, nonetheless, it has become very frequent to use international escrow accounts, which brings more security to all parties, but in this case the seller must consent in writing.
2. A Real Estate Company, Realtor, Seller or Attorney begins the acquisition of the title documents. Each property has a series of documents recorded at the local courthouses and registries that reflect prior owners, lenders and other parties who have or had an interest in the property you're buying. Such documents also show any pending lawsuits and liens against the property and/or seller. The examination of such documentation is very important and should be done by a third party who has no interest in the conclusion of the transaction.
3. The property is inspected. In most cases, a professional inspector should conduct a property inspection or survey to ensure the integrity of the property.
4. The "Escritura Publica" is prepared. Usually a notary or an attorney, in conjunction or not, will prepare the document, which will later convey the property rights to the new owner. It also shows the legal description of the property, sale price, and all costs/fees that will be paid at closing.
5. You close on your property. On closing you'll need to provide all the funds, a picture ID, and your Tax ID Card, know in Brazil as the CPF. During the closing, you (and whoever else is buying/selling the property with you) will have to sign an "Escritura Publica de Venda e Compra" before a notary, and once payment is made and "escritura" is executed, the closing process ends, but not the entire process of acquiring the real estate.
6. Registration of "Escritura". Property rights in Brazil are 100% enforceable only when the "escritura" is duly registered, so make sure your attorney or notary registers the "escritura", as soon as possible at the proper Real Estate Registry. Only when this step is completed will you become the official known owner of the property you paid for.
Should you need further information, feel free to email me at firstname.lastname@example.org.
Jose C. Santiago, J.D.
Attorney at Law & Licensed Real Estate Agent
Offices in Brazil and United States
DISCLAIMER: All information herein given is merely for elucidative purposes, it summarizes the STANDARD procedure to safely convey property rights in Brazil. Real Estate transactions always have many variables and details that differ from one to another. In case of doubts regarding your transaction, always consult with your own attorney.
Previous articles by Jose:
Permanent Visas in Brazil
Brazil: International Money Transfers
Brazil: Squatters Rights (Usucapião) - Be Aware!
Brazil: Annual Procedures to Keep Your CPF Number Valid
How to Hire a Lawyer in Brazil Part 3
How to Hire a Lawyer in Brazil Part 2
How to Hire a Lawyer in Brazil Part 1
Tax Information for Foreigners in Brazil Part 4
Tax Information for Foreigners in Brazil Part 3
Tax Information for Foreigners in Brazil Part 2
Tax Information for Foreigners in Brazil Part 1
8 Reasons to Invest in Brazils Real Estate
The Brazilian Resident Investor Program for Foreigners
Brazil: Annual Required Procedures to Keep Your CPF Number
Legal Aspects of Acquiring Real Estate in Brazil