New rules in force on estate development, subdivisions, and public records

Many new items came into effect on December 28, 2021, with Provisional Presidential Decree No. 1085/2021 (“MP”). The MP introduced some exceptions regarding this immediate effectiveness concerning amendments in Article 130 of the Public Records Law, which will only come into force in 2024. Still, this news is not just for Officers of the Public Records, Real Estate Registry, Protests, Notary or Legal Entities & Persons Registry Officers. As important as they are for them, the news is equally important for the general public.

The MP addresses the Electronic Public Records System (“SERP”), which will considerably modernize our system, including by establishing short deadlines for many acts, in alignment with this modernization. With the SERP, we will now have a unified electronic system that allows for documents and information to be exchanged between the different Public Records offices and different Government bodies. Users will be able to, among other services, request any information as electronic certificates from any location. They will also be able to update information with greater precision and speed, such as marriage information, change of a street name, or the name of a legal entity in the different records of interest to them.

Still in the matter of simplification, users will now receive the electronic statements regarding the acts for them to produce their effects, unlike the previous need to present the instrument itself (the deed, for example), and the National Council of Justice (CNJ)’s National Disciplinary Board of the Courts may define, in relation to legal acts and transactions related to personal property, the types of documents that will be prioritized when received in the offices of the notary public by the electronic statement.

This same system will provide a more efficient way of searching for properties and, consequently, reinforces the importance of public records in its role as a repository of personal and property information. This will undoubtedly bring a new rhythm to the most diverse legal relationships, including creditors and debtors. It should be noted that, in this context, the MP reinforces the principle of concentration in registration when it deems necessary to characterize good faith, and expressly provides that they will not be required to characterize good-faith of a third party that purchases the property, the prior obtaining of any documents or certificates in addition to those legally required and, especially, the obtaining or presentation of forensic certificates or judicial court clerks. This issue is especially important and, by virtue of the MP, it can have immediate repercussions in countless discussions about it. The concepts also apply to personal property, which can now be registered in the Registry of Deeds and Documents similarly to the Real Estate Registry for this purpose.

There is an interesting simplification of acts when the MP simplifies the procedures for registration of Deeds and Documents that solves the problem of multiple registrations in different locations and different clerk’s offices. It is now enough to register in only one location.

Concerning real estate developments, in addition to changes in relation to the material that must make up the dossier for instructions on the real estate registry and the deadline for this act, a relevant simplification is made to facilitate the condominium creation, which is now a single act done with the registration of the real estate development. This drastically reflects on the costs involved and simplifies the cancellation of acts related to the development, such as the extinction of the allocated assets when the construction is annotated automatically, the purchase and sale agreement or promise to sell, accompanied by the respective instrument of discharge from the institution financing the construction, without the need for specific cancellation annotation.

Regarding subdivisions, there is an interesting solution to subdivisions in areas located in more than one real estate registry, with a new rule that addresses the location of the registry and puts an end to many discussions about it, consistent with the solution mostly applied.

Although most of the MP is in force, it is worth remembering that it must be converted into Law by the Brazilian Congress within (sixty) (60) days, which can be extended once for the same period. If the MP is not converted into Law, it will lose its effectiveness. However, it is a fact that when the MP is converted into Law, as happened previously, its text will have to undergo changes that can improve the text and the important rules contained therein.

We address here the outlines of the MP to provide an overview of it. To learn more about the changes brought by the MP and their effects on legal transactions involving public records, our real estate team is available to assist you.