On Wednesday, 05.12.2018, the Plenary of the House of Representatives approved the amendments made by the Senate to Bill No. 1220/15, which disciplines the withdrawal from the purchase of a property, a practice commonly known as distrato.
The main point of PL no. 1220/15 is to define the amount of the fine that may be retained by the developer in case the buyer gives up the purchase of the property. With the project’s approval, if the buyer gives up on the deal or stops paying the installments of the property, the company responsible for the construction can retain up to 50% of the amount already paid, as well as deduct the broker’s commission, taxes, and condominium fees from the consumer.
The current jurisprudence, including judgments by the Superior Court of Justice, has understood the retention of 10% to 25% of the amounts paid.
The 50% retention percentage will only apply in cases where the incorporation is subject to the segregate estate system. In the case of properties incorporated outside this regime, the fine will be limited to 25% of the amount paid, and the remaining amounts must be returned to the buyer within 180 days.
Besides the fine, the project also regulates the tolerance of six months of delay for builders in delivering the properties, the so-called “grace period”. After the grace period, as long as provided for in the contract, the developer will be considered a defaulter, and the buyer may rescind the contract and receive all the amounts paid, corrected in up to 60 days after the rescission, in addition to the fine provided for in the contract. If you choose to go ahead with the deal, the construction company must pay a fine corresponding to 1% of the amount paid per month of delay.
Now the bill goes on to the president’s sanction. The DDSA’s real estate team is at your disposal for further clarifications and assistance in cases involving real estate contracts and rescission of contracts.