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The demanded evolution of the Brazilian public records system - Brief analysis of provisional measure No. 1.085/21

On December 27, 2021, the President of the Republic issued Provisional Measure No. 1085 (“MP”), bringing some news related to public records of legal acts and transactions.

The main innovation was the establishment of the Electronic System of Public Records (“SERP”), which will bring functionalities for operational improvement in the interaction with notaries throughout Brazil, among which we highlight:

  • be a public electronic system of legal acts and transactions;

  • perform the interconnection of public records services and the interoperability of the databases between the registry units and between them and the SERP;

  • allow remote service to users through internet access; and

  • permit the reception and sending documents and titles, as well as the issuance of certificates and information in electronic format, in a centralized mode, for exchange with the competent notary services, with the Government and with the users of the system.

The SERP will also allow the consultation of information on unavailability of assets decreed by the Judiciary or by administrative authorities, as well as restrictions and encumbrances of legal, conventional or procedural origin levied on movable and immovable assets registered in the Public Registry. In addition, it will permit that users verify the names of those that are listed as debtors of protested and unpaid securities or as guarantors, providing publicity and security to the business.

It is worth noting that, with the creation of the SERP, the registration or annotation of facts, acts and legal transactions can be carried out through electronic extracts, whereby the applicant may, at its discretion, request the filing of the entire contractual instrument that gave origin of the electronic statement.

The schedule for implementing the SERP must be defined by the National Justice Department of the National Justice Council, noting that the deadline cannot exceed January 31, 2023.

In addition to the institution of the SERP, the MP brought changes in some sparse laws, which we highlight below:

  • modification in the rules of real estate development provided for in Law No. 4,591/64, to enlighten the events that determine the extinction of the affected assets, intended to guarantee the execution of the project, as well as to establish the building condominium after the construction registration;

  • modification in the rules provided for in the legislation regarding public records provided for in Law No. 6,015/73, Law No. 6,766/79 and Law No. 13,465/17, in particular to provide the creation of the certificate of the updated legal status of the property, simpler and less expensive than the full-content of the real estate registration certificate; as well as the reduction of maximum deadlines for issuing certificates from the real estate registry;

  • amendments to Law No. 8,935/94, to include as a duty of the notary and the registrar the acceptance of electronic means of payment in general;

  • amendments to Law No. 13,097/15, to update the reference to the Civil Procedure Code and reinforce the principle of concentration of acts in the registration of the property; and

  • standardization of the understanding regarding the extinction of the Limited Liability Individual Company - Eireli, as well as maintaining legal certainty of business acts that are registered within the Boards of Trade, through amendments to the Civil Code.

The MP also brought changes that sought to reduce the level of requirement relying on the due diligence of real estate transactions, since there is now an express provision that the characterization of the good faith of the acquirer or beneficiary in rem does not depend on prior obtaining of any documents or certificates, not even the presentation of forensic or judicial distributors certificates.

The new rule is also valid for, in general, assessing the validity and effectiveness of the deal, which aims to change the legal situation of real rights that goes on real estate. Note, however, that the documents mentioned in § 2°, art. 1 of Law nº 7.433/85 (document proving the payment of the inter vivos real estate property inheritance tax, tax certificates and certificates of property and real liens) continue to be required, both for the characterization of good faith and for the validation of the business.

The normative text also expressly stated that “legal situations not included in the registration in the real estate registry, including for the purpose of eviction, may not be opposed to a third party in good faith who acquires or receives in guaranty rights in rem over the property” (according to §1, art. 54, of Law No. 13,097/15). Thus, the insecurity caused by art. 792, item IV of the Code of Civil Procedure, which made it possible to cancel a transaction due to fraud in execution for the simple fact that an action capable of reducing the debtor to insolvency was ongoing, was dissolved, since the new rule prevents the imposition of facts outside the registration to the third party acquirer in good faith.

In this way, the edition of the MP denotes the Executive's effort to reduce the bureaucracy of the country's registration situation and adapt notary procedures to new existing technologies, facilitating access to public information and, thus, expanding access to credit for individuals and companies.

Finally, it is worth noting that many of the provisions provided for in the MP have already entered into force on the date of its publication, and the SNA team will continue to monitor the implementation of such standards, including in relation to the SERP.

Por Matheus Zilioti e Henrique Takeda

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