Excuse Me but You Don’t Own That Property

Just like in the US, the true owner of real property in Brazil will always have a deed or escritura. This document, filed publicly with a notary office, is proof that you purchased the property. Without it, you have...well, you certainly don’t have the property.

A purchase agreement or even an agreement for the promise to purchase real property, something that’s common in Brazil, is helpful. It can show that you have a right to property. But having the right to something doesn’t mean that you actually have it. If the seller never signs the deed over to you, you’ll be stuck trying to enforce the contract in a Brazilian court.

But the matrícula, a document showing the transfer history for a property, is perhaps an even more critical piece to the real estate puzzle. Without it, the property isn’t truly yours. A third-party could, in good faith and without knowing you bought the property, purchase it as well. And in this case, you’d be out of luck, except perhaps for a claim for fraud against the seller. That’s why it’s so important for the matrícula to be reviewed and updated immediately after each transfer.

Certainly there’s risk with all business transactions. And this risk is elevated in cross-border transactions, especially in Brazil. But you can minimize the risk and protect yourself by ensuring that the documentation is clean and in order before you close.

Do your due diligence and insist that the seller provide current documents that reflect the true nature of the transaction. When it comes time to turn around and sell the property, you’ll be thankful you did.