Is It Possible to Cure the Default After Consolidation of Ownership? Legal Limits and Judicial Review

Is it possible to cure the default after the consolidation of ownership in fiduciary conveyance? Can the debtor cure the default after ownership has been consolidated in the name of the fiduciary creditor?

The answer requires technical caution: as a rule, no. Law No. 9.514/1997 establishes a step-by-step procedure with strict temporal milestones, within which the right to cure the default has clear limits. Once these milestones are exceeded, the consolidation of ownership produces significant legal effects.

That said, exceptions do exist, especially where there are procedural defects or violations of the fiduciary creditor’s legal duties.

What is curing the default in fiduciary conveyance?

Curing the default is the right granted to the fiduciary debtor to regularize overdue payments, including statutory charges, in order to prevent the consolidation of ownership of the property in favor of the creditor.

It is a balancing mechanism of the system, allowing preservation of the contract when the default is remediable within legal limits.

Until when can the debtor cure the default?

Objectively, curing the default is possible up to the consolidation of ownership in the creditor’s name, provided that:

·         the debtor is validly notified;

·         the statutory deadline is observed;

·         payment is made in full, including charges and expenses.

After consolidation is duly registered, the right to cure the default is exhausted, and the procedure moves to the auction phase.

Is the consolidation of ownership an absolute act?

No.

Although consolidation produces relevant effects, it is not immune from judicial review. If it is verified that:

·         notice to the debtor was irregular;

·         there was a defect in the registry procedure;

·         statutory deadlines were not observed;

·         there was a violation of objective good faith,

the consolidation may be challenged in court, which reopens the discussion regarding the effects of the default and, in certain cases, the very possibility of curing the default.

Can the default be cured after consolidation by judicial decision?

In exceptional cases, yes.

Case law admits flexibilization of procedural rigidity when it is demonstrated that the debtor did not have a real and valid opportunity to cure the default prior to consolidation.

In such cases, this does not represent an unrestricted expansion of the debtor’s rights, but rather a restoration of legality in the face of material procedural defects.

Does the principle of objective good faith influence this analysis?

Decisively.

Objective good faith imposes duties of:

·         transparency;

·         cooperation;

·         procedural fairness.

If the fiduciary creditor acts in a manner that artificially hinders or renders impossible the curing of the default, the procedure may be reviewed, even after consolidation, to prevent imbalances and abuses.

What happens if the consolidation is deemed valid?

If consolidation is valid:

·         the right to cure the default is extinguished;

·         the property enters the creditor’s legal sphere;

·         the auction phase begins;

·         any reversal will depend on serious and proven defects.

In this scenario, the discussion shifts from curing the default to the regularity of the auctions and subsequent acts.

Conclusion: procedural rigor and legal certainty

Curing the default is a relevant right, but not an unlimited one. The fiduciary conveyance system requires respect for legal milestones, under penalty of legal uncertainty.

At the same time, the procedure does not authorize abuses and must always be subject to:

·         strict legality;

·         objective good faith;

·         judicial review when invoked.

In Real Estate Law, deadlines are not mere formalities.

They are guarantees of balance and predictability.

Ferreira Advocacia acts with technical rigor in matters involving fiduciary conveyance, curing of default, consolidation of ownership, and real estate auctions, providing precise and strategic legal analysis.