Buying a property is a big financial investment. Therefore, just like any other application, this transaction must obey several rules. Therefore, it is very important to understand the difference between deed and property registration.
At first, this topic may seem a little complicated. However, it is enough for you to understand that investing in real estate involves a succession of steps.
The first one starts when you decide to buy a house or apartment, and the last one is when you are recognized as the owner of that property.
But what happens between these two moments? In this article, we will clarify everything you should know about the difference between a deed and property registration. Read on!
Before clarifying the differences between these documents, it is important that you know that they are not the only points that must be evaluated in a real estate negotiation. It is also important to understand the real estate contract, as it precedes the deed and registration.
A real estate contract is the document that formalizes the negotiation between two parties: seller and buyer. In this agreement, there are some important information, among them:
- amount paid for the property;
- form of payment;
- property characteristics;
- identification of the parties;
- property location etc.
That is, the contract contains all relevant information about the property and those involved in the negotiation so that anyone is able to understand the transaction when reading the document. Therefore, it is important that it is well written, after all, it will be consulted in case of disagreements between the parties.
A purchase and sale contract must comply with Article 1.245, of Law 10.406 / 2002. Therefore, there are some rules that must be obeyed, for example:
- the seller is not obliged to deliver the property if he does not receive the agreed value;
- parents can sell real estate to their children, as long as the other heirs agree to the deal;
- tutors cannot buy property from pupils or guardians;
- if the property is the object of inheritance, an inventory is required; among other rules.
It is important to emphasize that when a person buys a property and only has the purchase and sale contract as a guarantee, he has possession of that asset, but is not the owner.
What does the law say?
In Brazil, only the person who registers the property in the Real Estate Registry Office is considered the owner of the property. Anyone who buys a house but only has the contract is a squatter – not a landlord.
It is important that you understand that there are dishonest people who sell the same property to more than one person. In such cases, the owner will be the one who first deeds the property. Because it is such a detailed step, this type of negotiation requires the monitoring of a real estate professional.
In addition, having only the purchase and sale contract will prevent the buyer from resorting to real estate financing to carry out the deal. From the bank’s point of view, financing should be used to purchase a house or apartment.
However, if the person who is going to lend the money will not own the property, the banking institution understands that the transaction is of high risk and therefore refuses to release the capital.
That is why banks require a series of negative certificates before releasing credit. Thus, they are sure that the property is not being disputed in court, that it was not given as a loan guarantee, etc.
You may have noticed that deals that are made only with the purchase and sale contract are usually paid in cash, right?
Now that you understand the role of the purchase and sale contract, let’s talk about the deed of real estate.
It is by means of the deed document that the buyer and seller certify that they wish to proceed with the business signed by the purchase and sale contract. It is as if the parties made public the intention of the deal, registering it in a notary public to ensure that it is in accordance with the law.
How to do the deed of a property
The deed is done in the notary’s office (also known as a notary public). You must present the purchase and sale agreement, in addition to the documentation listed below.
- RG and CPF;
- Birth certificate, if the person is single;
- Marriage certificate, duly updated, if the person is married;
- Spouse’s death certificate, in case of widowhood, in addition to the marriage certificate with death certificate.
The person still has to declare his profession and address. These proofs must have been issued within a maximum period of 60 days, considering the date of the deed’s protocol.
For legal entities
- Articles of Association or last consolidated contractual statement;
- Bylaws and their amendments;
- articles of incorporation of the current board of directors of the company;
- RG, CPF, declaration of profession and address of the representative of the legal entity.
In this case, the documents do not have to be original, and certified photocopies can be presented at a notary.
- updated registration;
- certificates of encumbrance to shares (issued in a maximum of 30 days);
- IPTU booklet;
- negative debt certificate issued by the city hall;
- declaration of condominium discharge;
- declaration of the value of the property;
- certificate of fiscal regularity of the property, issued by the Federal Revenue Service.
After issuing and signing the deed of the property, it is necessary to send it to the registry office. Take the deed to the real estate registry office. Large cities usually have more than one registry office, each in a specific region. The notary can anticipate the deadline, observe your entry protocol, there says the time for registration of your deed. Pay attention to the legal deadline, it is 30 working days.
The property registry is the document that definitively transfers ownership of a property. When this stage is completed, the buyer becomes responsible for the payment of IPTU and can renovate the property or sell it, for example.
Important: if the property is financed, it is only possible to register when the property is fully paid off. In this case, the bank issues another document called the discharge term. Then, the buyer takes this term to the real estate registry and makes the registration.
Those who purchased a loan need not be surprised by this difference, as the steps described here refer to the purchase made in cash. Anyone who buys a property through financing is only at risk of losing it in the event of default.
The function of registering property is to record the entire official history of that property. Therefore, there is information such as date of construction, the engineer responsible for the work, the name of its owners, legal disputes involving the property, etc.
In large cities, there are many irregular properties. When we use the word “irregular”, we are saying that, for the Justice, that property does not exist, as it does not have a notary’s registration.
For example: in early 2019, we saw the disaster caused by the collapse of a building in Rio de Janeiro. Although it was a very beautiful building, looking solid, that property was completely irregular.
It had been built in an area of environmental preservation, there was no engineer responsible for the work and those responsible for the sale did not respect the ethical rules of Creci – it is not known, even, if they were registered with that body.
Therefore, even if bureaucracy causes upsetting to the buyer, giving him more work when it comes to buying, it is necessary to clarify that these requirements exist to protect the interest of society.
Imagine a buyer who, when consulting the property registration, realizes that he is totally different from what he visited: the registration refers to a wooden house and the buyer is acquiring a townhouse.
This means that the City did not take notice of the reform. In some cases, this can generate fines related to property tax, since this tax is levied on the property’s footage.
Have you realized the importance of knowing the history of the property you are going to acquire?
The importance of experts
With this article, you have become more informed about these documents. But that does not mean that you should underestimate a specialized consultancy.
The support of a real estate agent can help you avoid unnecessary risks when buying your property. In some cases, such as when writing the purchase and sale contract, the presence of a lawyer specializing in real estate law is essential.
For some reason, many people simply overlook this care, as if buying a property was a trivial investment. It is not! Remember that this is a purchase valued in thousands of reais.
Differences between documents
The purchase and sale contract turns the buyer into a squatter, giving possession of the property. This contract is not mandatory, but once done, it needs to be fulfilled.
The real estate deed signals the progress of the transition and indicates the transfer of a property. It makes the sale official.
The real estate registry, in turn, turns the buyer into the owner of a property.
Did you like this article about the difference between a deed and property registration? As we have seen, there are many details and, therefore, it is important to always count on the help of a real estate professional.