Compulsory award is a legal process that aims to oversee the transfer of property ownership when the seller or holder of the right is unwilling or unable to finalize the formal documentation.
This legal document is crucial for ensuring legal security in real estate transactions, particularly in instances of awarded purchase and sale agreements.
Compulsory awarding, besides its primary purpose, shares similarities with other legal concepts like the goods pledge employed in asset seizures.
A vehicle can be used as collateral on behalf of others when possession is transferred.
What does mandatory award mean?
The mandatory award is the process where the purchaser of a property, or an eligible party, asks a judge or a registry office to transfer the property ownership.
This typically happens when the seller declines to sign the official contract of sale after receiving full payment for the property.
Legal foundation: Civil Code sections 1.417 and 1.418.
The prospective buyer gains the right to purchase the property through a promise of purchase and sale that is not subject to regret, formalized in a public or private document and registered in the Property Registration Office.
The potential buyer, who has the legal right, can ask the seller or others who have received the seller’s rights to provide the final purchase deed as per the terms in the preliminary agreement. If there is a refusal, they can seek the court’s intervention to transfer the property.
When is the mandatory presentation?
Compulsory recognition is required under the following circumstances:
- The purchase and sale agreement is considered fulfilled when the buyer has paid the property’s full value and the seller has not completed the transfer process.
- If the property is registered under someone else’s name other than the seller, the award can help address the issue.
- When there is a legally registered commitment contract for buying and selling, if the seller refuses to complete the transfer, it results in an irrevocable purchase and sale commitment.
- Since Law No 14,382/22, it is now possible to grant compulsory awards out of court, as long as there is no disagreement.
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What requirements are needed to support the initiative?
The following criteria must be fulfilled for the mandatory awarding process to take place.
- A formal purchase agreement is necessary in writing before the sale is completed or at the time of final payment.
- The property must be properly registered and free of any outstanding issues that could impede the transfer.
- The buyer needs to show evidence of having fully paid for the property, such as through receipts, deposits, or similar documents.
- It is advisable to give a formal notification before taking action if the seller fails to fulfill their obligation.
What is the time limit for mandatory awarding?
The right to initiate the action of compulsory award does not expire, according to the Superior Court of Justice (STJ), as it is viewed as a potestative right.
Instead of being guaranteed indefinitely, that privilege would be vulnerable to expiration, although there is no specified legal provision for expiration in this scenario.
There is no set time limit for mandatory granting.
The right can be lost if someone else obtains ownership of the property through usucapio.
What is the authority of the mandatory awarding process?
The authority to decide on a mandatory arbitration case typically lies with the State Judiciary. It is crucial to consider specific aspects in this regard.
Territorial jurisdiction for mobile units
Actions involving real property rights must be initiated in accordance with the property situation, as stated in Article 47 of the CPC.
The situation forum of the property is competent for cases based on real estate law according to Article 47 of the Civil Procedure Code.
The mandatory granting process should be supported in the district where the property is situated.
Competency with materials (Common Justice)
The mandatory award involves a tangible property right (ownership transfer), and the State Court presides over the matter.
Unless there is a component that falls under the jurisdiction of another area, such as the Federal Court, when cases involve the Union, authorities, or federal public entities as interested parties.
Federal Justice Exception
If the Union, its federal authorities, or public companies are involved in the case, jurisdiction will be transferred to the Federal Court as stated in Article 109 of the Federal Constitution.
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How does extrajudicial compulsory award function and what is it?
The extrajudicial compulsory award is an administrative process that enables the buyer of a property to make adjustments to the property directly at the registry office, without having to go through the court system.
This process is outlined in Article 216-B of Law No. 6.015/1973 (Public Registry Law), added by Law No. 14,382/2022, and is typically used when the seller or rights holder fails to fulfill the requirement to execute the final deed of transfer.
Refer to Article 216-B of Law No. 6.015/1973.
Art. 216-B of Law No. 6.015/1973 allows for the extrajudicial transfer of property under a promise of sale or assignment in the property registration service, in addition to the regular legal process.
Extrajudicial compulsory award prerequisites.
- There should be a contract or document that clearly shows the seller’s promise to transfer the property.
- The property must be properly registered in the property registry office under the seller’s name, with a clear and clean ownership history.
- The seller’s lack of action or the inability to obtain the documentation must be proven in order to show that the transfer was not completed, or it must be evident that the buyer is unable to complete the transfer for various reasons (such as failure or absence).
- All necessary personal and property documents must be thorough and include certificates and evidence of payment for the registry office.
Procedure for reporting.
- The acquirer must submit the application to the appropriate property registry office along with the required documents.
- The tabeli informs the potential seller or their successors to express and manage the transfer.
- The seller must submit objections or proceed with awarding the scripture within a specified deadline, usually around 15 days.
- If there are no valid expressions of disagreement, the registrar can proceed with mandatory registration of the property for the buyer.
Impedance values.
- Disagreement regarding ownership or possession.
- Presence of evidence or documentation in unresolved property.
- Incomplete documentation.
This method is particularly beneficial for individuals seeking to manage property matters without going through the usual court delays, while adhering to legal and documentation constraints.
How are compulsory awards and pawning of goods related to each other?
The mandatory grant is closely linked to property regularization and its relationship with the pledging of goods should be understood.
The buyer will have precedence over the property if it is pawned due to the seller’s debt, as long as they can demonstrate their purchase before the pawning.
In this situation, the mandatory award can be utilized to safeguard the purchaser’s rights, even when challenged by the seller’s debtors.
The compulsory award ensures that the rights of the buyer who has taken possession of the property without the registered document are protected from delays affecting the property.
Practical Advice for Lawyers on Mandatory Adjudication
Compulsory award is a necessary legal tool to facilitate the transfer of property ownership in cases where the seller is uncooperative or unwilling.
Lawyers must understand the intricacies of this process to protect their clients’ rights.
Explore useful advice for effectively responding to mandatory rewards.
Understand when it is required to take the mandatory award action.
The mandatory award procedure may be initiated if the buyer has paid for the property but the seller is unwilling or unable to transfer the deed.
It is also appropriate when the property is registered under the name of third parties or when there is a binding purchase and sale agreement that is properly registered.
Familiarize yourself with the legal foundation.
- Articles 1.417 and 1.418 of the Civil Code guarantee the buyer’s rightful ability to request the transfer of the property.
- Art. 216-B of Law No. 6.015/1973 allows for extrajudicial compulsory awards.
Identify the fundamental needs
To assist with the process or initiate the out-of-court procedure, please verify:
- Ensure that there is a formal and finalized contract in writing.
- The property needs to be registered under the seller’s name or with a clear ownership history.
- Collect receipts, deposits, or other documentation as evidence of payment.
- Before taking legal action or contacting the authorities, make sure to formally inform the seller in advance.
Consider the potential challenges
- If there is a pawn involved, it must be shown that the property acquisition happened before the pawning to safeguard the client’s rights.
- Guide the client to organize all personal and property documents before initiating the process to address the issue of insufficient documentation.
- Ownership or possession disputes may require legal intervention if they cannot be resolved amicably.
Pay close attention to the deadline and adverse possession.
The buyer’s rights may be at risk if someone else gains ownership of the property through usucapio, even though there is no time limit for mandatory compensation.
Agility is crucial for protecting the client’s ownership rights.
Defend with real-life examples.
- A typical scenario involves a buyer who has taken possession of a property, but the seller has passed away or cannot be located. It is important to note that the compulsory award can ensure the transfer of ownership even under such circumstances.
- The mandatory award can safeguard the buyer from the seller’s creditors if the purchase is proven before the deadline.
Guarantees customers’ legal peace of mind.
Make sure to regularize the property, in addition.
- All information in the Real Estate Registry is current.
- There are no future risks or influences that negatively impact the customer.
- The property is appropriate for any forthcoming financing or discussions.
The importance of mandatory recognition in safeguarding property rights
Compulsory arbitration is a necessary mechanism to ensure property rights in deadlock scenarios.
It guarantees that the buyer has legally established ownership, whether in a legal or non-legal setting, even when facing challenges from the seller or third parties.
Lawyers must grasp the function of this establishment and how it relates to scenarios like collateralizing assets to effectively protect their clients’ interests.
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What is a mandatory prize?
Compulsory adjudication is a legal process that aims to transfer property ownership to the buyer if the seller fails to complete the necessary documentation, even after payment has been made in full.
In which circumstances is the mandatory award action taken?
Compulsory award typically applies when a purchase and sale contract is fulfilled, and the property is registered under the name of a third party (with the original seller acknowledging the transfer) due to an irrevocable and registered sales commitment.
Since 2022, Law 14,382/22 has enabled the non-litigious extrajudicial process to take place in the office.
What criteria must be met to initiate a mandatory awarding procedure?
The key conditions involve having a written purchase contract (completed or nearing final payment), ensuring the property is legally registered and free from encumbrances, providing evidence of full payment, and preferably notifying the seller in advance to fulfill their obligation.
Is there a specified time limit for submitting the mandatory award application? Does the initiative have a deadline?
The right to initiate a compulsory award action does not expire, as per the Superior Court of Justice (STJ), as it is seen as a discretionary right not bound by a particular legal time limit.
The right can be forfeited if someone else gains ownership through adverse possession.
How can a mandatory prize be assessed fairly?
The authority to decide on the obligatory award process typically lies with the State Court, particularly in the district where the property is situated, in accordance with article 47 of the Civil Procedure Code.
The Federal Court has jurisdiction when one of the parties involved is the Union, its federal public authorities, or companies.
How does extrajudicial compulsory award operate in the workplace?
The extrajudicial compulsory award is an administrative process in the property registration office created by Law No 14,382/22. It enables the buyer to formalize the property transfer without involving the court system. Essential requirements include a contract demonstrating the transfer obligation, property registration under the seller’s name, evidence of the seller’s inability to fulfill the obligation, and proper documentation.
The seller is informed by the office and must respond by a certain deadline. If there is no valid objection, the registrar can proceed with the award.
What are the primary obstacles to the granting of non-judicial mandatory awards?
Disagreements over property ownership, unresolved liens, and incomplete documentation are the key obstacles.
What is the connection between the mandatory award and pawning goods?
If the item subject to the mandatory award is used as collateral because of the seller’s debts, the purchaser who can demonstrate obtaining the item before it was used as collateral will have precedence over the item.
The mandatory award can be utilized to safeguard the purchaser’s rights ahead of the seller’s creditors.
What is the importance of mandatory award in safeguarding property rights under the law?
Compulsory award is an essential measure to safeguard the buyer’s right of ownership once contractual obligations have been met, guaranteeing the property transfer process in cases where the seller is inactive or unable to complete it.
It guarantees the legal certainty of the real estate transaction, whether through a court or extrajudicial process.
