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Writer's pictureEdson Ferreira

Impacts of the Distrato Law on Real Estate Contract Termination: A Legal and Practical Analysis

 



This article analyzes Law No. 13.786/2018, known as the "Distrato Law," and its impacts on the termination of real estate purchase and sale contracts in Brazil. It focuses on the significant changes introduced by the law, its effects on the parties involved, and the jurisprudence of the Superior Court of Justice (STJ). The article aims to provide a comprehensive overview of the legal and practical implications of the new legal provisions for the real estate sector, highlighting the rights and duties of buyers and sellers and how the new legislation has brought greater legal security to real estate transactions. Legal security is a fundamental principle in real estate law, ensuring predictability and stability in transactions.


The introduction of Law No. 13.786/2018, the "Distrato Law," brought a new dynamic to contractual relationships in the Brazilian real estate market. This article explores the implications of this law, highlighting its legal provisions, the effects on the parties involved, and the interpretation of the STJ.


1988 Federal Constitution 

The 1988 Federal Constitution guarantees the right to property and freedom to contract, in accordance with the principles of the social function of the contract and objective good faith.


Brazilian Civil Code 

The Civil Code (Law No. 10.406/2002) regulates contractual termination in its articles 421 to 426, establishing the general principles applicable to contractual relationships.


Law No. 13.786/2018 

Law No. 13.786/2018, the "Distrato Law," brought specific rules for the termination of real estate purchase and sale contracts, especially in real estate developments, subdivisions, and incorporations. This law amended provisions of Laws No. 4.591/1964 (Real Estate Incorporations Law) and No. 6.766/1979 (Subdivisions Law).


Effects of Contract Termination

Before 2018 

Before Law No. 13.786/2018, contractual termination in the real estate sector was mainly regulated by the Civil Code and specific contractual provisions. The main consequences included:


Refund of Amounts: The buyer was entitled to a refund of the amounts paid, generally in full or with moderate retention, depending on the contractual clauses.


Retention: Retention was applied to cover administrative expenses and other costs. STJ jurisprudence varied, but generally allowed retentions of 10% to 25% of the amounts paid.


Improvements: Compensation for improvements made by the buyer to the property, depending on the contractual specifications and the good faith of the parties.


Compensation and Occupation Fee: Compensation of amounts and the occupation fee were less regulated, left to the discretion of the parties and court decisions.


After 2018 

With the introduction of Law No. 13.786/2018, there was more detailed regulation on contractual termination:


Installment Refund: The law allows the installment refund of amounts paid by the buyer, up to the limit of 12 monthly installments.


Retention: Retention was explicitly regulated, allowing the seller to retain up to 50% of the amounts paid by the buyer, depending on the case.


Compensation and Occupation Fee: Compensation and the occupation fee became more clearly defined, allowing the seller to charge up to 0.5% of the contract value per month of occupation of the property by the buyer.


Compensation for Improvements: Compensation for improvements made to the property must be expressly provided for in the contract, and its absence may result in the loss of the right to compensation by the buyer.


Jurisprudence and the Position of the STJ

Relevant Decisions 

The STJ has consistently aligned with the new legislation, applying the provisions of Law No. 13.786/2018 to balance the interests of the parties. Highlights include:


REsp 1.729.593/SP: The STJ reaffirmed the validity of retention clauses, provided they are not abusive, and recognized the possibility of installment refunds according to the new law.


REsp 1.599.511/SP: Decision that consolidated jurisprudence on the application of the occupation fee and compensation of amounts in real estate purchase and sale contracts.


Rights and Duties of the Parties

Buyer’s Rights 

Refund of Amounts: Right to a refund of amounts paid, with retention as provided by law and the contract. • Compensation for Improvements: Right to compensation for improvements made, if provided for in the contract. • Single or Installment Refund: Right to choose a single or installment refund, depending on the contract and legislation.


Seller’s Rights 

Retention of Amounts: Right to retain a percentage of the amounts paid, as stipulated in Law No. 13.786/2018.


Compensation and Occupation Fee: Right to charge an occupation fee and compensation of amounts for the buyer’s use of the property.


Contractual Clauses: Right to include specific clauses in the contract, provided they are not abusive and comply with current legislation.


Effects of Contract Termination

Adjustment of Obligations 

Contractual termination results in significant financial adjustments, requiring the refund of amounts paid by the buyer and the application of retentions and occupation fees by the seller.


Financial Impact 

Contractual termination can have a significant financial impact on both parties, requiring new financial planning and adaptation to the new conditions imposed by the termination.


Judicial Precedents 

Judicial decisions applying Law No. 13.786/2018 serve as precedents for future cases, influencing the interpretation and application of contractual clauses and legal provisions.


Conclusion 

Law No. 13.786/2018 brought greater clarity and legal security to contractual terminations in Brazilian real estate law. The STJ's actions in line with the new legislation have ensured balance in contractual relationships, protecting the rights of buyers and sellers. Proper application of legal and contractual provisions is essential to avoid abuses and ensure justice in real estate transactions.



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