Recent changes in Brazilian legislation regulating fiduciary transfers have sparked significant debate and impact on the business environment and real estate market. Fiduciary transfer, widely used as collateral in credit contracts, especially in the real estate sector, is a mechanism that allows the fiduciary creditor to take possession of the pledged asset more quickly if the debtor fails to fulfill their obligations.
One of the main changes stems from the decision by the National Justice Coordinator, Minister Luis Felipe Salomão, dated June 5, 2024, which determined the inclusion of Chapter VI in Title I of Book III of the Special Part of the National Justice Coordinator’s Code of Standards (CNN/CN/CNJ-Extra). This addition establishes that the constitution of fiduciary transfers of real estate by private instrument is restricted to entities participating in the Real Estate Financing System (SFI) and other exceptions foreseen in the legislation, as outlined in Article 38 of Law 9.514/97.
However, the Corregedor’s interpretation has been the subject of criticism.
Competence of the CNJ: It is argued that the decision contradicts the National Justice Council’s (CNJ) own understanding, which had previously ruled on the incompetence of the body to regulate the matter, according to the Administrative Control Procedure 0000145-56.2018.2.00.0000. The ruling from this judgment affirms that the CNJ should not interfere in the interpretation of federal legislation, highlighting the risks of legal instability and asset misdirection.
Inconsistencies with Law 9.514/97: Moreover, the Corregedor’s decision disregards the structure of Law 9.514/97, which, in Chapter II, addresses fiduciary transfer of real estate independently of the SFI. Article 22, §1 clearly states that fiduciary transfer can be contracted by both individuals and legal entities, without exclusivity to entities of the SFI, reinforcing that the use of private instruments for fiduciary transfers should not be restricted solely to these entities.
Impact on CRI Operations: The requirement for a public deed to constitute fiduciary transfers on real estate, as decided by the Corregedor, could have serious implications, particularly for Real Estate Receivables Certificates (CRI) operations, which are essential for financing the real estate sector.
Inconsistency with legal framework: Additionally, recent legislative changes aimed at modernizing the guarantee system and facilitating access to credit, such as Law 13.476/17, the Legal Framework for Securitizations (Law 14.430/22), and the Legal Framework for Guarantees (Law 14.711/23), allow for shared fiduciary transfers and the extension of fiduciary transfers through either public or private instruments, further highlighting the inconsistency of the new regulation.
Against economic development: Furthermore, changes to the fiduciary transfer regulation in Brazil, particularly the public deed requirement, go against recent legislative efforts and increase transaction costs, which could harm national economic development. It is crucial for regulations to be revised to ensure legal certainty and maintain the credit flow essential for the country’s growth.
At BNS Law, we are committed to helping our clients adapt to these new requirements, ensuring that all operations comply with the current legislation. Our team is available to clarify any doubts and provide the necessary support during this transition.
For more information or to schedule a consultation, contact our team of experts.