In order for all parties to be safe, the process of buying and selling real estate follows a series of well-defined steps. One of them is the drawing up and writing of property, an indispensable legal instrument.
Throughout this blog post, you will learn:
- What is property deed
- The difference between deed and property registration
- How to make a deed of property
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WHAT IS A PROPERTY DEED?
The property deed, like other public deeds, is an instrument that formally validates a legal act between one or more persons. It is mandatory and signed before a Notary Public, thus ensuring that that document is legally valid.
Property deed is an essential step in the buying and selling process, since it precedes the transfer of ownership. The order of actions is as follows:
- Purchase and Sale Commitment Agreement
- Property deed (notary's office, made in person or online)
- Property registration at property registration (Property Registry Office)
The exception is when the property is acquired via real estate financing. In this case, it is the banking institution that is responsible for signing the contract, which is equivalent to the deed of property. The order is as follows:
- Real estate financing contract (Bank)
- Property registration at property registration (Property Registry Office)
WHAT IS THE DEED OF PROPERTY FOR?
Think of the deed as a purchase and sale contract that the Brazilian courts recognize as such in real estate transactions and that serves to ensure security for all involved.
With a signed deed, for example, the seller does not run the risk of discovering that that apartment has been sold more than once!
THE DIFFERENCE BETWEEN PROPERTY DEED AND PROPERTY REGISTRATION
While the deed of the property (made in the Notary's Office) formalizes the purchase and sale business, the registration of the property (made in the Real Estate Registry Office) is a different notary act. And, to do so, it is necessary to have already done the deed of property.
The property registration serves to update who is the legal owner of that property, transferring it from one person to another, and it is made in the property's registration, a public document that serves as a unit's identity document - there are all your information, such as footage, floor plan, location and history of owners.
WHAT PROBLEMS CAN ARISE IN THE REGISTRATION OF PROPERTY?
Obstacles that arise in this notary moment usually involve updating the registration of the property to be acquired, and not the act of drawing up the deed itself. Possible problems include:
- Property owner did not register the marriage
- No record of sharing was made (post-divorce or death)
- Is there a mortgage, fiduciary alienation or pledge
- There is a usufruct that has not been canceled
THE RELATIONSHIP BETWEEN ITBI AND PROPERTY DEED
In order to draw up the property deed, the buyer must also pay the Property Transfer Tax (ITBI) , the rate of which varies from city to city and can reach 3% of the value of the property. If you do not, you are at risk of being fined.
In addition to this 3%, there are other costs involved in the real estate transaction, such as fees due to the notary and the notary. In general, it is estimated that the total cost of these pending items to the buyer reaches 5% of the price of the property.
After all, how much does it cost to make a property deed? The price varies from state to state. In São Paulo, for example, different types of deed cost between R $ 186 and R $ 373.
HOW TO DO PROPERTY DEED
In the purchase and sale process, the deed of the property comes after the signing of the Purchase and Sale Commitment Agreement (CCV) and the legal assessment of the parties' documents, and before registration with the property's registration.
Once the required documentation is in order, you only need to schedule the signing of the deed with the notary. You don't need a lawyer for that.
PUBLIC DEED OF PURCHASE AND SALE OF PROPERTY: NECESSARY DOCUMENTS
If the process is between individuals, the following documents must be brought to the registry:
- Identity documents (RG and CPF)
- Birth certificate or, if any, marriage certificate
- If any, deed of prenuptial agreement and certificate of registration
In the case of legal entities, the list is as follows:
- Social contract and eventual contractual changes
- Simplified certificate of the Board of Trade
- Legal representative's identity document
THE ARRIVAL OF THE DIGITAL PROPERTY DEED AT THE LOFT
When talking about a notary, soon the long lines in uncomfortable chairs come to mind, right? No longer!
One of the consequences of the pandemic, which made millions of people stay at home, was to accelerate the adoption of processes for the deed of digital property.
This is an essential step towards a future of real estate transactions 100% online, which breaks down physical barriers and speeds up the closing of deals - without losing anything in terms of security.
The document is exactly the same and has the same validity, but it is digitally certified by the notary through a videoconference, where he can interact with the parties and validate the consent.
The digital signature is protected and can only be carried out through digital certificates that meet the requirements of Brazilian law. Nowadays, it is even possible to have a hybrid / mixed property deed, when one party digitally signs and the other, in person.
