Acquisition and lease of rural properties by foreigners are subject to a new ordinance

  • Brazil
  • 12/20/2017
  • By Ana Paula Terra Caldeira, Gabriela Salazar Silva Pinto, Pedro Henrique de Castro Oliveira
  • Azevedo Sette Advogados

By Ana Paula Terra Caldeira, Gabriela Salazar Silva Pinto, Pedro Henrique de Castro Oliveira |

Ordinance #88, published in the Brazilian Official Gazette on December 14, 2017, regulates the essential requirements and procedures for the acquisition and lease of rural properties by foreign residents in Brazil, foreign legal entities authorized to operate in Brazil and Brazilian legal entities equivalent to foreign companies and revokes the Ordinance #76/2013.

Ordinance #88/2017 innovates by regulating the determination of nullity provided for acts of acquisition and lease executed without the proper authorization, as stipulated in Federal Law #5,709/1971. The full nullity of the registration will not be declared, however, if such act affects a third party in good faith who fulfilled the conditions for adverse possession (usucapião).

Ordinance #88/2017 also sets forth that the full nullity of registers of acquisitions or leases of rural properties may be enacted through an administrative proceeding or declared through a judicial process by the Judicial Administrative Department of the State Court or by the local court where the property is located.

In cases of acquisition or lease of rural properties by foreigners in discordance with the provisions of Federal Law #5,709/1971, INCRA will request a declaration of non-existence and cancellation of the real estate register from the officer of the competent Judicial Administrative Department of the State Court and will communicate the fact to the State Public Prosecutor Office.

Finally, an important provision included in Ordinance #88/2017 enables eventual interested parties the possibility of regularization of acquisitions or leases executed until December 14, 2017 (date of publication of Ordinance #88/2017) in discordance with the legal determinations in the events of (i) foreigners married to Brazilian citizens with Brazilian or foreign sons residing in Brazil and / or (ii) a request to INCRA that will be analyzed based on parameters established in Ordinance #88/2017 for the purpose of verifying the plausibility and legality of the request.

Considering these hypotheses, it is possible that foreign residents in Brazil, foreign legal entities authorized to operate in Brazil and Brazilian legal entities equivalent to foreign companies request before INCRA the regularization of acquisitions or leases of rural properties executed until December 14, 2017 in discordance with the applicable regulation.

The Legal Team of Azevedo Sette Advogados is available for any further clarification on the matter.

Azevedo Sette Advogados