[BUYING AND SELLING REAL ESTATE IN BRAZIL]
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real property only becomes the property’s rightful owner after the notarial purchase deed is duly registered with the competent Real Estate Registry Office, as indicated in the real property ownership certificate. 6. FEES AND EXPENSES RELATED TO THE ACQUISITION OF REAL PROPERTY Notarial and Real Estate Registry Office fees vary from State to State and are regulated by State law. In each State, the same fees will be charged by every Real Estate Registry Office and Notary Public practicing in that State. Lawyer’s fees can be negotiated and ar e established by the Brazilian Bar Association in its main fee guidelines. Under the law, a lawyer does not need to be present at the execution of the deed of sale; however, to ensure the validity of negotiations and compliance with the relevant legal formalities, it is advisable to have a lawyer present. Furthermore, the presence of a lawyer also serves to ensure the accuracy of the deed’s content in relation to the description of the property, the description of the succession of rights of the seller and his/her predecessors, in addition to other legal requirements. Depending on circumstances, other costs might be applicable, such as the laudemium , applied to marine land (properties located on islands or properties that fall under an occupancy regime or a permit issued by the Federal Government). 7. FINANCING The most common way to finance the purchase of a real estate property is through a bank loan. To grant a loan, Brazilian banks examine the purchaser’s credit history and financial situation in addition to having the current commercial value of the property appraised by a civil engineer.
Upon payment of the purchase price - loaned amount - directly to the seller, the bank secures its interest over the property by registering a guarantee with the Relevant Real Estate Office to guarantee the loan (commonly a mortgage or a fiduciary lien). 8. SPECIFICITIES WITH RESPECT TO RURAL LAND - PROPERTY BOUNDARIES DESCRIPTION AND ITS ENVIRONMENTAL DATA Brazilian Law prescribes particular provisions in relation to rural land, and anyone with the intention of acquiring rural land must be aware of (i) specific rules/regulations with respect to the description of the boundaries of rural land that detail satellite geo-referenced coordinates in accordance with the proper topographical rules established by the National Institute of Colonization and Agrarian Reform ("INCRA"), and (ii) specific rules/regulations with respect to demarcated preservation areas on such properties and cadastre thereof with the State and the federal environmental agencies. It is important to note that the description of rural properties by way of satellite geo- referenced coordinates must be certified by INCRA and may lead to other legal measures/requirements with respect to the property regularization, given that the description must be recorded in the property ownership record file. In addition to certification by INCRA as a requirement for the valid execution of a deed of sale of rural land, registration with the relevant Real Estate Registry Office is also required if the property in question comprises an area of more than 100 hectares in extent. It is also important to note that the registration of rural property data with the State and the Federal environmental agencies is a further requirement for the execution of deed of sale for the acquisition of rural land, coupled with
ILN Real Estate Group – Buying and Selling Real Estate Series
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