You probably worked hard to sell your land.
You did all the marketing work for months to find the right buyer of plot in Taj residencia
To do this, he publicized the land on the real estate sales websites, put up posters and even shared the photos of his land among his friends on social networks, all in order to have as much exposure as possible.
But all this work to sell your land doesn’t mean much if you finish the whole process with the signing of a land purchase contract all wrong and full of legal defects.
1. What is a Land Purchase and Sale Agreement?
2. What is the Promised Land Purchase and Sale Agreement?
3. How to make a Land Purchase and Sale Agreement?
4. Term Land Purchase and Sale Agreement
5. What documentation is required to make the Land Purchase and Sale Agreement?
6. Does the Land Purchase and Sale Agreement guarantee ownership and transfer of ownership?
7. Is buying land with a Purchase and Sale Agreement safe?
8. How to regularize land with a Purchase and Sale Agreement?
9. How to proceed with the termination of the Land Purchase and Sale Agreement?
10. What problems should you avoid when negotiating land?
All your hard work can be thrown away if the document is legally invalid.
That’s why you need to have a contract that legally guarantees you the full validity of the purchase and sale process that you are carrying out with the land buyer.
See how you can have the contract fully updated and made by the renowned lawyers of our registry.
But before we start, let’s see what a land purchase and sale contract is.
Every contract must follow basic rules and requirements that sometimes on the internet are outdated, as the models offered are generic and do not represent what is specific in the contractual relationship, which is unique.
Therefore, the contract is indicated to be made by a notary or lawyer, who knows exactly what are the mandatory clauses it must have.
Land Purchase and Sale Agreement
1. What is a Land Purchase and Sale Agreement?
The land purchase and sale contract is an agreement between two or more people, whose objective is to formalize the sale of a property in Park View City Lahore and determine the clauses to be fulfilled by the parties.
This document formalizes the seller’s obligation to deliver the property to the buyer, who in return will pay him an amount.
This type of term is consensual, that is, neither party is obligated to do something that has not been agreed upon at the time of the transaction. It is also bilateral, as there is an obligation for both parties.
It can be performed for both urban and rural land.
How do I know if my land is urban or rural?
Are you going to buy or sell land not that close to the city, but also not that far away and you don’t know if your land is urban or rural? Let’s explain what each is.
According to the legislation that regulates this type of document, it is not enough for the property to be outside the urban perimeter to be considered rural. It is important to realize that the destination of rural property is different from the destination of urban property.
Urban properties are used for the construction of improvements. In other words, in the case of land, what defines it as urban is the type of structure that will be built on it, regardless of whether the land is productive or not.
Therefore, it is possible to find urban properties in rural areas, such as schools and gas stations, properties that, despite being in a rural area, are not destined to produce anything.
Rural properties, on the other hand, are areas destined or that can be destined for exploration, cattle raising, vegetal extraction or agricultural processing industry.
Every contract needs to follow basic rules and requirements that sometimes on the internet are outdated, as the models offered are generic and do not represent what is specific in the contractual relationship , which is unique.
Land Purchase and Sale Agreement
Is there a difference between land and lot?
Lands are large pieces of land devoid of any kind of intervention, including with regard to its size. It is considered a single property.
Anyone who acquires land can divide it into parts: lots. According to law 6.766/79, after dividing a plot of land, a plot must measure at least 125m².
The law defines that 5% of the land size must be reserved for public works, 20% for leisure and 10% for the use of sidewalks, streets and avenues.
For this transaction to occur, some documents are needed, as shown below.
2. What is the Promised Land Purchase and Sale Agreement?
Much is asked about the difference between the land purchase and sale agreement and the land purchase and sale promissory contract.
The land purchase and sale contract is the instrument by which the seller transfers ownership of the property to the buyer.
The commitment contract is a preparatory receipt through which the parties undertake to sign a definitive term later on.
As it is a preliminary contract, the promise includes clauses that the Civil Code does not allow to be included in the Purchase and Sale Receipt, such as the repentance clause, which allows the parties to withdraw from the business at any time without additional costs.
In order for the land or lot purchase and sale contract to be valid, it is necessary to meet some requirements as discussed below.
If you’d like to learn more about this contract, see our Promise to buy and Sell Agreement article.
3. How to make a Land Purchase and Sale Agreement?
A real estate transaction involving the transfer of property from one owner to another needs to be consolidated through a purchase and sale agreement.
Each type of real estate term has its particularities and among the main items that must be included in a contract, Tajarat Properties can mention:
Qualification of the parties
The contract must contain all personal data to identify both the seller and the buyer.
Information such as name, marital status, nationality, profession, CPF (individual registration), RG (general registration) and full address and proof of residence cannot be missing.
There are several templates of this free contract in word and pdf on the internet. However, almost all of them bring legal uncertainty, as they do not meet all the necessary requirements to be valid.
Land Purchase and Sale Agreement
Description of the land that will be sold
The land is the object of the contract and, therefore, needs to be characterized to formalize the legal transaction.
The description must contain the address of the land to be sold, the postal address code (zip code), the dimensions of the property, special characteristics and the means by which the seller acquired the land.
The description of the land must show the neighborhood: it must say if there is any commerce and it must indicate which commerce is to the right, left, behind and in front of the property.
It is important that the location of the land refers to the transcription or registration number present in the real estate registry office.
Obligations and rights of the parties involved
Initially, the seller’s obligation is to show the product and deliver the “keys” to the land access gate to the buyer and definitively issue ownership of the good.
As long as the “handover of the gate keys” does not take place, the seller is responsible for ensuring the conservation of the land until it is occupied by the new owner.
The law also determines, as a rule, that the seller is liable for all debts on the property until the moment of delivery.
In turn, the buyer’s obligation is to respect the method of payment for the object, complying with the agreed payment in full and on time.
If you change your mind during the transaction, the buyer will have to pay a fine provided for in the contractual clause.
Thus, make sure that your land purchase and sale contract is developed by professionals with technical expertise in the matter, to ensure your safety in the process.
4. Term Land Purchase and Sale Agreement
This document must present the price of the land and, if payment is made in installments, specify the down payment and other installments, how they will be paid and the due date.
Having a document recording this business is secure when all the details regarding payment are well defined.
Among the most important information is the due date of the following installments and the fine related to the delay in installments.
A very important contractual clause is the clause that makes clear where the payment for the land will be made.
If there is any problem related to non-payment of installments by the buyer, and it is necessary to file a lawsuit, it must take place in the competent court defined in the contract.
Down payment
Another very important clause is the one that requires the payment of the down payment. The down payment usually corresponds to 5% to 20% of the business value.
The main purpose of the down payment is to guarantee the purchase of the property because it guarantees the owner that the deal will be closed at some point and the buyer will guarantee that the property will be reserved for him.
Its function is to keep the property “on hold”: the seller does not advertise to anyone else while the buyer keeps his promise and payments.
If the buyer no longer keeps his promise and cancels the deal, the down payment is transferred to the injured party.
5. What documentation is required to make the Land Purchase and Sale Agreement?
When it comes to buying or selling land, just having the contract is not enough. It has several documents that must accompany it.
For the buyer the following documents are required:
- General Registry (RG);
- Individual Taxpayer Registration (CPF);
- Proof of address;
- Proof of marital status (birth certificate if single, marriage certificate if married, marriage certificate with divorce registration if divorced, all of which can be issued on the Federal System website );
- Work card and FGTS extract;
- If the buyer is self-employed or micro-entrepreneur, he can prove income through the income tax return, with the last three bank statements.
The seller also needs to present some documents such as:
- Seller identification documents, such as RG and CPF;
- Property documents;
- Twenty-year negative certificate of real liens (the document shows the entire history of the property in the last 20 years and specifies whether there is any debt)
- Registration of repossession actions and disposals (to find out if the property was informally sold to someone). The document is issued by the Real Estate Registry Office
- Tax clearance certificate issued by the city or copy of the property tax booklet for the last five years
- Certified copy of the IPTU for the year, accompanied by installments paid up to the date of the transaction, issued by the city hall
- Registration of the construction with the Real Estate Registry Office
- Property plan approved by the city or sketch with dimensions, signed by the engineer or architect with the respective Crea number (professional registration)
- Condominium debt clearance certificate (in case of apartment)
The documents accompany the contract to validate it, so it is important that the document is well written, with clear clauses exposing rights and obligations.
Land Purchase and Sale Agreement
6. Does the Land Purchase and Sale Agreement guarantee ownership and transfer of ownership?
This type of document alone is not capable of transferring ownership, as the Purchase and Sale Agreement only guarantees ownership of the land to the buyer.
For your land to be considered regularized as required by current legislation, you must have the public deed registered at the Real Estate Registry Office.
In other words, the most important document is to have the Property Registration in your name.
The public deed is an official document registered with the Notary Public. It is through it that the purchase and sale of land is formalized before a Notary Public and generates the transmission of the property.
On the other hand, the property registration will contain all the information about the land, such as location, outstanding characteristics, dimensions, former owner and conditions established for the sale.
7. Is buying land with a Purchase and Sale Agreement safe?
After what was said above, you may be asking yourself: So why am I going to do this contract?
The document serves to prove that the legal transaction was carried out and how it was carried out.
Therefore, it is in the contract that the property’s sale value will be stated, whether it was paid in cash or in installments, when the buyer can enjoy the property, in addition to being a document that proves the seller’s willingness to transfer the property to a new one owner.
Therefore, even if he alone does not transfer ownership, it is through his demonstration that the seller’s willingness to transfer the property to another will be proven.
8. How to regularize land with a Purchase and Sale Agreement?
The transfer of property can be done without a contract, just take the deed at a notary office, along with proof of payment of the ITBI (Real Estate Transmission Tax) and documents that prove the payment for the land. Okay, now just “get the key from the gate”.
However, the land purchase and sale contract is not an unnecessary instrument, it is the document where everything that was agreed between the parties that negotiated the property is formalized.
In other words, the importance of the purchase and sale contract is to leave the conditions for the sale of the land in writing and, although it is possible to make the sale without it, it is safer with it.
Land Purchase and Sale Agreement
Thus, from the moment the parties sign the contract, it guarantees the compulsory adjudication of the property.
That is, if the owner refuses to give the deed to the person who bought the property and if it is brought to justice, a judge will issue an order for the former owner to deliver the deed to the new owner.
Given the above matter, you can ask yourself: Is there the possibility of selling a property that does not yet have deeds? Let’s see.
Is it possible to sell land without deed?
Yes, it’s possible, but it’s not legal since to be regular the sale of land must have the deed. This is because it is the deed that determines the real owner of the land.
That way, if you have land that you want to sell or buy without deed, know that you have or will only own an asset that can be taken by the heir or even by the person responsible for selling the space at any time.
If you still want to risk buying land without deed and be content only with possession, and for fifteen years no one opposes the possession of your lot, you can apply in court for a declaration by judgment of usucapio, which will serve as title for registration at the Real Estate Registry Office.
What is the declaration by judgment of adverse possession?
The adverse possession is a procedure that formalizes the ownership of a land through continuous possession, for an extended period.
In order to claim adverse possession, it is necessary to appear, advised by a lawyer, at a Notary Public’s Office bearing the land plan, the public deed of the property, tax clearance certificates and a document attesting to the land purchase.
In addition, it is necessary that you file these documents together with a petition for an Action of Usucapião, which you can find out more about in our article Declaration of Usucapião .
However, there are owners who do not have access to the property deed because they are not the ones actually listed on the property registration or because the property transfer was registered only in a private contract (drawer contract).
In this case, it is possible to make a new deed. The creation of a new deed costs around 4% of the property’s value, in addition to an approximate fee of R$ 1 thousand reais.
Another alternative to regularize the property’s situation is to find the former owners and request the issuance of the deed.
Subsequently, the interested party must go to the Real Estate Registry Office and present the purchase and sale contract to certify that they have negotiated the land with its official owners.
As it must be prepared by a realtor, a notary or a lawyer, it must present carefully established clauses and include appropriate measures in several cases.
Land Purchase and Sale Agreement
9. How to proceed with the termination of the Land Purchase and Sale Agreement?
Brazilian law allows an indefinite contract to be terminated without prior notice, if there is a breach of the obligations of either party.
To carry out the cancellation, it will be necessary to file a lawsuit to request the return of the amount paid and formalize the return of the land.
In court decisions, the amount to be refunded by the party that incorporated the land is usually composed of 80 to 90% of the amounts paid, with monetary correction of each payment plus monthly legal interest.
This calculation should be based on the date on which the party that incorporated the land was summoned to respond to the action until the date of effective payment, whether through an eventual agreement or by compliance with the court decision.
There are problems with the paying party as well. When the installments are due and not paid for more than 3 months, the party will pay a fine of up to 10% of the total value of the deal.
If the buyer is notified through a real estate registry officer and within 30 days from the notification date does not pay the overdue installments, the contract will be terminated.
But assuming that none of the contractors will do anything to terminate the contract, let’s learn the next step, which is the deed of the land.
10. What problems should you avoid when negotiating land?
During the negotiation of transfer of ownership of land, some unforeseen circumstances may arise. Next, we’ll talk about the main ones.
overdue property tax
The Brazilian Tax Code (CTB) in its article 131 states that the responsibility for paying the IPTU belongs to the person who acquires the property.
That said, if you acquired a land with IPTU in arrears, file a recourse action against the former owner to request reimbursement of the amounts paid referring to the corresponding period’s IPTU.
All this information must be observed, so that the land purchase and sale contract protects the lessee from possible problems, such as judicially demanding what was not agreed.
Land Purchase and Sale Agreement
Ground in Divorce Sharing
It is okay to sell a property during the sharing when there is an agreement between the two ex-married couples.
The problem occurs when there is no understanding between the couple, neither about the sharing nor about the sale of the land during the sharing.
In this sense, the decision of the sale will be up to the judge, who will hear the motivation of the parties to sell or not the property.
The reasons can be different, as usually the ex-couple is in a hurry to sell their assets to share values, pay lawyers and continue the legal process.
The sharing process can take longer when it is contentious, and it can be bad business to buy land negotiated in divorce sharing.
Lot in Inventory
Inventory is the procedure where the heritage of a deceased person is identified to allow the transfer of assets to heirs, through sharing.
There are two types of inventory: the extrajudicial, carried out through a public deed drawn up in a notary’s office, and the judicial one, carried out through a judicial process.
Under normal conditions, descendants sell inherited goods after inventory completion. But an inventory taken through the courts can take one to three years to complete and many families may need to sell some assets to pay for the process.
Therefore, it is possible to sell a property, such as a land or lot, before the end of the inventory process. For this, it is necessary to ask the judge for an authorization that justifies the reason for the sale.
ALL ABOUT THE TOPIC
Legislation: Brazilian Civil Code (Law No. 10.406/02)
Concept: legal document that proves the purchase or sale of land without improvement.
What can’t be missed?
- Identification data of all parties involved in the contract;
- Contract signed by all parties and two witnesses;
- Contract signed by the spouse when there is no marriage with separation of property;
- Register the contract with a real estate registry office;
- Make a new deed, changing the owner as stated in the contract;
