The bank can take the property issued as a loan guarantee without court permission, STF rules

O Federal Supreme Court (STF) this Thursday, the 26th, decided that in the event of default, creditors can take property given as collateral in real estate loans without going to court. The score was 8:2.

Ministers Louis Fuchscase reporter Christian Zanin, Andre Mendons, Alexander de Moraes, Days of Toffoli, Cassio Nunez Marquis, Gilmore Mendez d Luis Roberto Barroso voted for out-of-court execution of the contract, to the victory of the banks. This possibility is provided by Law No. 9,514/1997.

The discussion unfolded around credit agreements with fiduciary alienation. In this modality, the property is given as collateral for the loan until the installments are fully paid.

Ministers decided that out-of-court execution of a loan agreement with a fiduciary alienation is constitutional. photo: CARLOS ALVIS MORA

Fuchs argued that by making it easier to enforce a contract without the need for legal action, the legislation had the practical effect of increasing access to credit.

“This is a regulatory policy that provides greater opportunities for access to real estate financing at low rates, so repealing the legislative provision of the guarantee measure could mean unbalancing this balance,” he argued.

Minister Luis Roberto Barroso, president of the STF, was in the same line: “This legislative provision reduces the cost of credit, which I consider very important, and minimizes the demand on the judicial industry, which is already overburdened.”

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The meeting resumed with the vote of the minister Edson Fachinwho voted against and was accompanied Carmen Lucia. He argued that the right to housing is a fundamental right and deserves special protection.

“The legislation has concentrated the financial agents’ decision-making powers and enforcement prerogatives that are normally entrusted to members of the judiciary,” he argued.

The decision of the STF has a general sound, that is, it will serve as a reference for all judges and courts of the country.

For lawyer Olivar Vitale, a specialist in real estate law at VBD Advogados, the STF decision preserves the real estate lending market.

“The STF maintained legal certainty by declaring the constitutionality of the extrajudicial auction in the execution of the trust sale of the collateral property. This preserves real estate loans in Brazil, allowing citizens to obtain housing and the long-awaited reduction of the housing shortage in the country,” he says.

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