The concept of possession is extensively addressed in Brazilian civil law, encompassing various aspects related to property, contractual relations, and possessory rights. In the context of real estate transactions, the issue of possession compensation arises when the buyer cannot exercise the rights to use, enjoy, and benefit from the acquired property.
This article aims to discuss the legal nature of possession compensation within the scope of sale and purchase contracts, exploring the rights to use, enjoy, and benefit and the circumstances under which the possessor or buyer may claim compensation when unable to fully exercise these rights.
Possession and Property: Key Distinctions
Possession, as defined by Article 1.196 of the Civil Code, is the exercise, whether fully or partially, of some of the powers inherent to property ownership. Unlike property ownership, which grants the owner full rights over the asset (to use, enjoy, dispose, and recover it), possession is a factual situation that can receive legal protection, especially when good faith possession is established.
In real estate transactions, the buyer, upon taking possession of the property, should be guaranteed the right to use it, enjoy its fruits, and benefit from the economic and social advantages that ownership or possession of that property can provide. However, there are situations in which, due to factual or legal issues, the buyer or possessor cannot fully exercise these rights, which may give rise to the right to compensation.
Use, Enjoyment, and Benefit: The Buyer’s Rights
A purchase and sale contract is governed by Articles 481 and following of the Civil Code. When a buyer acquires real estate, they expect to take possession of the property and exercise the rights inherent to that condition, which include:
Use: The right to use the property for their needs or according to its intended purpose (e.g., to live in the property or use it for commercial purposes).
Enjoyment: The right to receive direct or indirect fruits from the property, such as rental income or natural produce (like crops in the case of rural properties).
Benefit: The right to economically exploit the property and derive income from it.
When the buyer is unable to exercise any of these rights due to some impediment, it raises the question of liability for damage compensation.
Cases of Compensation for Loss or Restriction of Possession
Possession-related compensation can arise in various situations, such as:
Eviction: Eviction occurs when the buyer loses the property due to a judicial decision recognizing the existence of a prior right held by a third party over the property. In this case, the buyer is entitled to be compensated by the seller, as provided in Articles 447 to 457 of the Civil Code. The seller is responsible for ensuring the buyer's full exercise of possession, and eviction creates the right to reimbursement of the purchase price as well as potential losses and damages.
Impediment to Use and Enjoyment: If the buyer takes possession of the property but, due to factual issues, cannot use it according to its purpose (e.g., due to the presence of unlawful occupants or third parties who impede its use), they may claim compensation for the inability to use and enjoy the property. In these cases, compensation is intended to compensate the possessor for the period in which they were deprived of the benefits of possession, such as the inability to live in the property or rent it out.
Delay in Delivery of the Property: In off-plan or under-construction real estate transactions, delays in property delivery are common. Such delays, in addition to causing material damages (such as rental expenses and maintenance of another property), also deprive the buyer of their rights to possession, use, enjoyment, and benefit, which may entitle them to compensation for the damages incurred.
Bad-Faith Possession: If a possessor acquires possession in bad faith, i.e., knowing the property does not legitimately belong to them, they are not entitled to compensation for improvements or additions made to the property. However, the legitimate owner may claim compensation for the unauthorized occupation of the property and the damages resulting from its unauthorized use.
Right to Compensation: Nature and Criteria
When discussing compensation for the loss or restriction of possession, some key aspects are considered:
Good Faith of the Possessor: A good-faith possessor who is deprived of the rights to use, enjoy, and benefit is entitled to compensation, whether due to eviction or inability to fully exercise their possession. Good faith assumes that the possessor was unaware of any defect or issue that could compromise their possession.
Loss and Damage: Compensation should cover the material losses suffered by the possessor, including the amount they were unable to obtain due to deprivation of use and enjoyment of the property, as well as any expenses incurred in renting another property during the period of restriction.
Value of the Fruits: If the possessor was prevented from enjoying the fruits of the property, such as rental income or earnings derived from property use, they may claim the return of these amounts, regardless of their good faith.
Conclusion
Possession compensation in the context of real estate transactions is directly related to the buyer's right to fully exercise the powers inherent to ownership, such as using, enjoying, and benefiting from the property. When these rights are restricted due to factual or legal issues, the buyer may seek compensation for damages, whether through eviction or practical impediments affecting their possession.
The good faith of the possessor is a central criterion for awarding compensation, and the calculation of damages must consider both the direct losses and the benefits the possessor was unable to obtain during the period in which they were deprived of possession rights.