Why a well-drafted purchase and sale agreement matters
- Elton Martins
- 8:13 am
The city of Maringá and the northwest region of Paraná currently have an increasingly attractive real estate market, with properties for every kind of buyer, many well-located neighborhoods offering a good quality of life and plenty of leisure options, the chance for families to buy their long-awaited own home, and countless investment opportunities.
Once you have found your property, a purchase and sale agreement must be drawn up, setting out every term of the deal: price, deadlines, payment method, measurements, the current status and condition of the property, delivery date, deed, and the full identification of the parties and their spouses, if any.
Each type of deal calls for a specific type of contract, and some guidance is needed so that the purchase is carried out safely, avoiding problems that range from administrative to judicial issues, for example when the property has already been given as collateral or even seized. That is why competent real estate advice is so important, eliminating possible errors and defects that could compromise your purchase.
Documents required to buy a property
Although it may seem bureaucratic, the parties' documentation is extremely important, because it allows the civil, judicial and financial situation of each party to be reviewed. If any certificate shows pending matters, there is a risk of losing the property being purchased.
| Document | Where to get it | What it is for |
|---|---|---|
| Birth or marriage certificate | Civil Registry Office | Shows the parties' civil status and who must also sign (spouse) |
| Clearance certificates | State courts, labor courts and federal courts | Reduce the buyer's chances of losing the property over the seller's debts or lawsuits |
| Certificate of interdiction and guardianship, where applicable | Civil Registry Office | Proves that the owner has the legal capacity to sell |
| Updated property registration record | Real Estate Registry Office | Checks for encumbrances such as a mortgage, seizure or fiduciary lien |
The real estate purchase and sale agreement
The real estate purchase and sale agreement is the formal record of the deal made between buyer and seller regarding a given property. It proves the deal and sets out all the agreed rules, deadlines and conditions, bringing stability to the essential procedures of the transaction.
For the deal to be effective, the contract must meet requirements set by law: legal capacity of the parties, a form prescribed or not prohibited by law, and a lawful, possible, economically valuable, determined or determinable subject matter, thus avoiding defects that could void the deal. The absence of any of these conditions creates a defect that may lead to the invalidity of the legal transaction, causing losses, usually financial, to both buyer and sellers.
It is one of the most important contracts, since it involves gathering the documents of the property, the seller and the buyer, as well as assessing the risks arising from the deal itself and from lawsuits. That is why a prior review by a real estate law specialist, what we call due diligence, is so important.
The contract does not transfer ownership
It is essential to know that the purchase and sale agreement does not transfer ownership of the property. Under Brazilian law, ownership is only transferred upon registration with the Real Estate Registry Office, which is done through a Public Deed of Purchase and Sale.
Public deed and real estate registration
The Public Deed of Purchase and Sale, executed before a Notary Office, gives formal validity to the purchase and greater legal certainty to those involved. It is mandatory for transactions worth more than 30 minimum wages, under Article 108 of the Brazilian Civil Code.
This document creates rights, but ownership is transferred with the registration of the deed at the Real Estate Registry Office. Whoever buys a registered property acquires full ownership; whoever buys a property without that registration acquires only possession. Without registration, you will only have possession and use of the property, but it will not officially be yours.
A private contract may only be used where the law expressly allows it; in real estate, only for transactions worth less than 30 minimum wages. And a private purchase agreement, with or without notarized signatures, does not have public faith: it does not have the form nor produce the legal effects of a public deed.
Other real estate contracts
There are other types of private contracts for each situation: promise of purchase and sale agreements, off-plan purchase agreements and real estate lease agreements (residential and commercial).
A well-structured contract protects the rights and duties of buyers and sellers and is a cornerstone of the transaction: besides involving large sums, it sets out the details of the entire deal.
Our team specializes in Real Estate Law, Property Registration and Real Estate Investments, and can advise you on purchasing your property, whether as a home or an investment, from drafting the purchase and sale agreement to registering the public deed with the Real Estate Registry Office.
We are at your disposal.