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Writer's pictureEdson Ferreira

Attention in the Acquisition and Use of Contemplated Letter of Credit: Legal and Procedural Aspects.




The use of a contemplated letter of credit in real estate consortiums represents a viable alternative for property acquisition, providing the contemplative consortium member an opportunity to realize their investment in a planned and secure manner. However, to ensure a transaction free from complications and to guarantee legal compliance, it is essential to follow a series of rigorous steps and seek guidance from professionals specialized in law.


This article explores in detail the general steps for acquiring and utilizing a contemplated letter of credit, emphasizing the necessary legal precautions to avoid future complications. It covers aspects from verifying the initial contemplation of the letter to the final procedures of registration and release of remaining funds.


  1. Verification of Letter of Credit Contemplation Before proceeding with any negotiation or use of the letter of credit, it is fundamental to confirm its contemplation. This step involves:


Requesting Documentation from the Assignor: The first step is to obtain all documents related to the contemplated letter of credit from the assignor, including the contemplation letter issued by the consortium administrator, payment statements, and official correspondences.


Contacting the Consortium Administrator: It is crucial to directly verify with the consortium administrator whether the letter is indeed contemplated. Requesting written confirmation of the contemplation is crucial to obtain official validation.


Checking Payment History: It is necessary to ensure that all installments up to the contemplation date were regularly paid, without any financial arrears that could compromise the validity of the letter of credit.


Lawyer's Document Review: It is recommended to consult with a specialized lawyer to review all obtained documents, ensuring their authenticity and legal compliance.


  1. Negotiation of Contemplated Letter of Credit Upon confirmation of the letter of credit's contemplation, the negotiation phase begins, involving:


Assignment Agreement: Negotiating and formalizing an assignment agreement with the holder of the letter of credit. This contract should clearly detail the conditions of the assignment, including any applicable discount on the letter's value.


Approval by the Administrator: Requesting approval from the consortium administrator for the transfer of the letter of credit, providing all necessary documentation for analysis and approval of the process.


  1. Use of the Contemplated Letter of Credit Once the letter of credit has been properly transferred, the usage phase begins, including:


Preparation of Trust Alienation Deed: Drafting the trust alienation deed with the assistance of a lawyer. This deed defines the use of the property as collateral and the financial terms applicable to the transaction.


Signing and Registration of the Deed: Attending the Notary Public office to sign the trust alienation deed, ensuring all agreed terms are correctly formalized. Subsequently, registering the deed at the Real Estate Registry office to ensure its validity to third parties.


Release of Letter of Credit and Return of Balance: Notifying the consortium administrator about the registration of the trust alienation deed. The administrator then proceeds to release the letter of credit, deducting any agreed amounts and returning the remaining balance according to established terms.


  1. Commencement of Installments After completing the procedures for using the letter of credit, the contemplative consortium member begins making monthly payments as stipulated in the original consortium contract.


Final Considerations The acquisition and use of a contemplated letter of credit require diligence and legal knowledge to ensure all steps are securely conducted and in accordance with established norms. The guidance of a specialized lawyer is essential to mitigate legal risks and ensure the transaction proceeds smoothly, protecting the interests of the contemplative consortium member and ensuring the validity and security of the real estate investment.


Therefore, by following the steps described in this article and seeking appropriate legal assistance, contemplative consortium members can conduct their transactions calmly and effectively, benefiting from the opportunities offered by real estate consortium systems with legal security.

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