Legal problems when buying property: which are the most serious, and how do certificates prevent each one?
Legal problems when buying property: fraud against creditors, loss of title to third parties, debts and registry defects. See the certificates that prevent each risk. Full checklist.
The most serious legal problems when buying property are fraude à execução — losing the asset to the seller's creditors (art. 792 of the Brazilian Code of Civil Procedure, the CPC) —, loss of title to a third party (evicção — not to be confused with tenant eviction) — losing it under a court decision recognizing a third party's right (art. 447 of the Brazilian Civil Code) —, propter rem debts (property tax and condominium fees) and registry defects. All of them can be detected before signing through the right set of certificates covering the property and the seller.
There are two ways to learn about a property's legal problems: reading certificates before you buy, or receiving court summonses afterwards. The cost gap between the two is brutal — a few hundred reais in registry fees versus years of litigation and, at the extreme, the loss of the property itself. This article is a map of the legal risks of a purchase and of the document that neutralizes each one.
Real estate legal risk is any pre-existing situation — a debt, a lawsuit, a registry defect — capable of reaching the property even after the sale. We will walk through the four most serious ones, the certificates that reveal them, and how to structure the contract when one of them shows up.
What is fraude à execução — and why is it risk number 1?
Fraude à execução is the sale of assets by someone facing a lawsuit capable of rendering them insolvent: in that scenario, the sale is ineffective against the creditor (art. 792 of the CPC), and the property can be seized in your hands, even with a registered public deed. The good-faith buyer's protection depends on showing the checks were done — and STJ case law (Precedent 375) generally requires either a registered attachment or proof of the buyer's bad faith, but you do not want to argue that in court. Antidote: docket certificates from the civil, tax and labor courts for the seller (and spouse), covering current and previous places of residence.
What is loss of title to a third party (evicção) — and how can it take the property away from someone who bought it properly?
Evicção is the loss of the asset under a decision recognizing a third party's prior right (art. 447 of the Brazilian Civil Code) — for example, an earlier unregistered sale that wins the dispute, an annulled probate, a forged signature somewhere in the chain of title. The dispossessed buyer has a claim against the seller (price, expenses, damages — art. 450 of the Civil Code), but a claim against an insolvent seller is a right on paper only. Antidote: a review of the chain of title in the property record (matrícula) — going back at least 15–20 years — checking that each transfer was done properly.
Which debts follow the property, not the owner?
Property tax (IPTU) and condominium charges are propter rem obligations: they attach to the asset and are collected from whoever holds it. The buyer is liable for prior debts — and units go to auction over condominium debt with some frequency in the São Paulo State Court (TJSP). Financing debts (fiduciary sale or mortgage) appear in the property record and block a clean transfer. Antidote: the City's real estate tax clearance certificate, a condominium clearance statement signed by the building manager, and a careful read of the liens in the property record.
Which registry defects stall or void the purchase?
The most common ones: built area not annotated in the registry (the house “does not exist” for the registry), discrepancies between the property record's description and reality, missing occupancy permit (habite-se), court-ordered unavailability of the asset (check the National Registry of Unavailable Assets — CNIB) and a sale from parent to child without the other descendants' consent (voidable — art. 496 of the Civil Code). Antidote: an up-to-date property record with a lien certificate, zoning and building checks and, for buildings, the occupancy permit.
A concrete example: the house in the Limão district
Cláudio was negotiating a house for R$ 480 thousand. The certificates revealed three layers: a tax enforcement action against the seller (R$ 90 thousand), an annex whose built area was not annotated, and two outstanding IPTU installments. Instead of walking away, the contract was designed around them: part of the price withheld in escrow to pay off the enforcement action with proof of dismissal, registry annotation as a condition for the final installment, and the IPTU paid at closing. The purchase went through — safely — and the discount negotiated over the irregularity paid for the legal work ten times over. The same property, bought on a handshake, would have been seized months later.
The most common (and costly) mistakes
- Checking only the property and forgetting the seller. Fraude à execução is born in the person's lawsuits, not in the property record. Risk: losing the asset to creditors you never saw.
- Accepting outdated certificates, or from a single judicial district. A seller with previous addresses calls for a wider search. Risk: a relevant lawsuit flying under the radar.
- Ignoring marital status and the property regime. A sale without the spouse's consent is voidable (art. 1,647 of the Civil Code). Risk: an annulment action years later.
- Closing with an issue “the seller will sort out later”. Risk: later never comes — and the debt is yours.
Actionable checklist: the certificates of a bulletproof purchase
- Up-to-date property record (matrícula) + lien and lawsuit certificate (15–20 years of chain of title);
- Civil, tax enforcement (state/federal), labor and protest docket certificates — seller and spouse;
- Real estate tax clearance certificate (São Paulo City Hall) and condominium clearance;
- Unavailability check (CNIB) and, for a corporate seller, certificates for the company and its partners;
- Occupancy permit (habite-se) and registry annotation of the built area;
- A contract with withholdings and conditions precedent tied to each issue found.
Frequently asked questions
Can I lose the property I bought because of the previous owner's debts?
Yes, in two main situations: fraude à execução (a sale made by someone facing lawsuits capable of rendering them insolvent — art. 792 of the CPC) and propter rem debts, such as condominium fees and IPTU, which follow the property and can lead to seizure of the unit. The seller's and the property's certificates, obtained before signing, are the way to rule out both risks.
What is evicção (loss of title to a third party) in a property purchase?
Evicção is the loss of the asset under a court decision recognizing a third party's prior right over it (art. 447 of the Brazilian Civil Code) — due to a flaw in the chain of title, an old fraud or a double sale. The buyer has a claim against the seller (art. 450 of the Civil Code), but the real prevention is reviewing the chain of title in the property record before buying.
Which certificates about the seller should I request before buying a property?
At a minimum: civil court and tax enforcement docket certificates (state and federal), labor courts, protested debts and, if the seller is married, the same certificates for the spouse — covering current and previous places of residence. If the seller is a company, add certificates for the legal entity and its partners. These are what reveal the risk of fraude à execução.
Is it possible to buy a property with outstanding IPTU or condominium debt?
Yes, as long as the debt is known, quantified and addressed in the contract — usually by withholding part of the price until payment is proven. What is dangerous is buying without knowing: because these are propter rem obligations, the debts can be collected from the new owner, including through seizure of the unit.
When should I see a lawyer to avoid legal problems in a purchase?
Before the binding offer or the down payment. Legal due diligence — certificates, chain of title, zoning and building checks — and a contract designed with withholdings and conditions are preventive measures: after signing, what was cheap prevention becomes expensive, drawn-out litigation.
Every serious legal problem leaves a paper trail — before signing
Fraude à execução, evicção, debts that follow the property, registry defects: none of these risks is invisible. They all show up in certificates that cost little and take days to obtain. A safe purchase is not the lucky one; it is the one with a dossier.
At Falchet e Marques Sociedade de Advogados, a law firm in São Paulo (Av. Paulista), we run complete legal due diligence — seller, property and chain of title — and structure contracts with withholdings and conditions that neutralize each risk found.
Talk to our team on WhatsApp: +55 11 95901-1854 — send us the property record or the address of the property under negotiation and receive the certificate map for your case.
