Brazilian Real Estate Law: Contracts and Guarantees

Published on October 4, 2025 and written by Cyril Jarnias

Real estate law in Brazil, a complex and dynamic field, holds crucial importance for anyone wishing to effectively navigate this country’s growing real estate market. Real estate contracts, central elements of any transaction, require clear understanding to guarantee the protection of all involved parties’ interests. Furthermore, the various legal guarantees offered by Brazilian legislation provide indispensable security in a legal environment often perceived as labyrinthine. This article aims to clarify the essential points and unveil the subtleties, thereby enabling the reader to acquire a solid foundation for successful real estate transactions in Brazil.

Real Estate Law in Brazil: Key Elements of Purchase Contracts

Main Laws and Legal Requirements

Brazilian real estate law is based on several texts: the Federal Constitution, the Civil Code (articles 1,225 to 1,245), the Land Registration Law (Lei dos Registros Públicos), as well as tax regulations, municipal regulations (urban planning, zoning) and administrative acts from bodies like the CNJ or INCRA.

To be valid, a real estate purchase contract must include an accurate description of the property, complete information on the parties (seller/buyer), the agreed price, and payment terms.

For any purchase exceeding 30 times the Brazilian minimum wage, it is mandatory to draft a public notarial deed (“Escritura Pública”) before registration in the land registry.

Crucial Steps for Concluding a Purchase Contract

1. Obtaining the CPF: The CPF number is essential for any real estate transaction, including for non-residents.
2. Prior Verification (“due diligence”):
   • Analysis of the title deed at the local land registry
   • Verification of debts associated with the property
   • Check for the absence of mortgages or ongoing disputes
3. Signing a preliminary agreement or promise of sale (optional but common)
4. Drafting and signing the definitive deed
5. Registration in the land registry: Only this registration confers effective ownership to the buyer.

Step	Description
Title Verification	Check at the land registry
Preliminary Agreement / Promise	Preliminary agreement with suspensive conditions
Authentic Deed	Drafting before a notary if value > 30x minimum wage
Registration	Mandatory registration for effective transfer

Main Obligations of the Parties

• Seller
  • Guarantee the validity of the title and absence of hidden defects
  • Provide all required documents (previous title, tax certificates)
  • Deliver the property free of any undeclared encumbrances
• Buyer
  • Perform all necessary verifications before signing
  • Pay the full agreed price according to the stipulated terms

List of mandatory clauses in the contract:

• Complete identification of buyer/seller (including CPF)
• Exhaustive description of the property (address, cadastral area…)
• Total price and financial conditions/possible installment payment
• Deadlines/modes of possession/use transfer
• Clauses relating to penalties in case of non-performance

Specific Rights & Protections for the Buyer

Protections against hidden defects/non-conformity: possible recourse against seller up to five years after discovery depending on severity; possibility of cancellation/partial restitution/adjusted price.

Right to obtain a certified copy of the registered title.

List of essential documents:

• Valid CPF of buyer/seller
• Previous official title
• Negative certificate of tax/municipal debts
• Proof of payment of taxes/fees

Competent Jurisdictions in Case of Dispute

The local civil courts where the property is located are competent to settle any dispute related to a real estate transaction.

Key Financial Aspects

List of main fees:

• Real Estate Transfer Tax (ITBI): generally between 2% and 4% depending on the municipality,
• Notary & registration fees,
• Attorney/advisor fees if necessary,

Other points:

• Taxable capital gains upon resale: progressive rate up to approximately 22%.
• Access to mortgage financing via local banks – need for proof of solvency.

Financial Element	Detail
ITBI	Municipal transfer tax
Notary/Registration Fees	Variable depending on property value
Capital Gains	Taxation between approx. 15–22%

⚠️ Procedures may vary slightly between states/municipalities; always consult a qualified local professional before final commitment

Guarantees for Expatriates in Brazilian Real Estate Transactions

Legal and Contractual Guarantees for Expatriates in Brazilian Real Estate Transactions

Expatriates benefit from a set of legal and contractual guarantees when purchasing or renting real estate in Brazil. The main protections are as follows:

Guarantee	Description	Applicability for Expatriates
Rental Guarantee	Fiador (personal guarantor), fiança empresarial (corporate guarantee), depósito caução (security deposit), título de capitalização (capitalization bond with an insurance company)	Mandatory for rental, variable choice depending on the landlord
Seguro fiança	Private insurance covering unpaid rent, damages, sometimes legal fees	Alternative to a traditional guarantor, increasingly used
Contractual Guarantee	Specific clauses in the sale or lease contract (property condition, delivery deadlines, guarantees on hidden defects)	To be negotiated during contract drafting
Legal Guarantee	Respect for consumer rights, verification of ownership, absence of mortgages or debts on the property	General right, applicable to all, including expatriates

Specific Rights Granted by the Brazilian Legal Framework

• Right to complete information about the property (condition, charges, legal history).
• Right to verify property ownership via the land registry (cartório de registro de imóveis).
• Right to obtain a written contract in Portuguese, specifying all essential conditions.
• Right to legal recourse in case of fraud, hidden defect, or non-compliance with contractual commitments.

Securing Payments and Protection Against Fraud

• Payments must be made through traceable banking channels (wire transfer, certified check).
• Funds are generally blocked until the transaction is finalized and the authentic deed is signed.
• Systematic verification of the property’s legal status (absence of mortgage, tax debts, ongoing disputes).
• Use of specific insurances (seguro fiança, title insurance) to protect against certain risks.

Roles of Notaries and Lawyers in Real Estate Acquisition

• Notary (tabelião): Authenticates the transaction, verifies document validity, registers the property transfer with the cartório.
• Specialized Lawyer: Highly recommended for expatriates. They perform due diligence, analyze the contract, ensure the property’s legal compliance, advise on tax and regulatory specifics.

Importance of Verifying Property Title and Legal History

• Consultation of the land registry to ensure the seller is indeed the owner.
• Verification of the absence of debts (IPTU, condominium fees), mortgages, or ongoing disputes.
• Check of urban planning compliance and property use (residential, commercial, agricultural).

Local Specificities and Practical Advice

Local Specificity	Explanations and Advice
Coastal Areas	Specific restrictions for foreigners (area limits, need for prior authorization); attention to erosion and construction rights.
Rural Areas	Acquisition subject to INCRA authorization; quotas for foreigners, enhanced controls on fund origin.
Condominiums (condomínios)	Strict internal regulations, collective charges (condomínio), need to verify the condominium’s financial health.

Practical Tips to Avoid Disputes and Secure the Transaction

• Always hire a lawyer specialized in Brazilian real estate law.
• Never sign any document without a sworn translation and full understanding.
• Demand the presentation of all legal certificates for the property and the seller.
• Prefer installment payments, with final release after effective property transfer.
• Check the reputation of the developer or real estate agency.
• In case of doubt, favor transactions through recognized agencies or platforms.

For any real estate transaction in Brazil, caution, preparation of a complete file, and assistance from professionals are essential to secure the investment and avoid disputes.

Main Legal Clauses in Brazilian Real Estate Contracts

Main Legal Clauses in Brazilian Real Estate Contracts:

• Property Description: The detailed description of the property (area, location, characteristics) must exactly match that in the land registry. Any discrepancy can prevent registration and thus the legal recognition of the property transfer.
• Identification of Parties: Complete and verified information on the buyer, seller, or tenant is mandatory. The tax identification number (CPF for individuals) is essential.
• Purchase or Rental Price: The agreed amount must be clearly indicated, as well as the specific terms (cash purchase, installment payment).
• Payment Terms:
  • Details of installments.
  • Payment method and currency.
  • Penalties in case of delay.
• Key Dates:
  • Contract signing date.
  • Scheduled date for delivery/entry into the premises.
  • Lease duration or deadline for concluding the definitive sale.
• Obligations of the Parties:
  • Seller’s obligations (conforming delivery, absence of mortgages).
  • Buyer’s obligations (full payment).
  • For leases: routine maintenance by the tenant; major repairs by the owner.

Guarantees Offered

Guarantee	Description
Rental Guarantee	Bank guarantee/insurance for unpaid rent
Eviction Clause	Protection against loss of property due to a legal defect
Hidden Defects	Obligation for compensation if unrevealed defect

General and Specific Conditions

General Conditions: systematic application such as compliance with local laws on condominiums or urban planning.

Specific Conditions: particular requirements related to the current state of the property or modifications requested by a party.

Sanitary and Environmental Clauses

• Compliance with local sanitary standards: conformity with municipal regulations regarding health and infrastructure (drinking water, drainage).
• Environmental Clauses:
  • Proven absence of contamination
  • Commitments regarding ecological maintenance
  • Required authorizations for structural modification

Recourse in Case of Dispute

Common list of contractual recourses:

• Mandatory prior attempt at amicable conciliation
• Direct referral to the competent civil court
• Mediation/arbitration explicitly provided for in some contracts

Common Practices & Recent Developments

Common Practices:

• Mandatory written formalization before a local notary (“Cartório”)
• Systematic registration in the land registry (“Registro Geral do Imóvel”) — only this step confers legal ownership to the new acquirer
• Frequent inclusion of a “cláusula de vigência”, guaranteeing that certain obligations persist even after normal expiration if registered

Legislative Updates:

• Recent strengthening of anti-money laundering controls during significant acquisitions
• Increased precision regarding preferential rights in condominiums (“direito real”)
• Progressive extension of alternative mechanisms like mediation/arbitration thanks to the new Brazilian CPC Code

Effect on Legal Protection

The strict documentary formalization required by the Brazilian judicial system offers strong security to buyers/sellers/tenants/owners. Notarial registration protects against any future challenge while several contractual guarantees specifically frame each type of real estate operation. Regulatory developments progressively strengthen these protections through a very dense federal/state/local legal framework that promotes transparency and legal stability.