Delay in Delivery of Real Estate Purchased for Investment

Delay in delivering a property purchased for investment constitutes mere contractual default and is not capable of generating compensable moral damages.

With this understanding, the Third Panel of the Superior Court of Justice (STJ) partially granted a construction company’s appeal to exclude from the conviction for delay in delivering the property the portion relating to compensation for moral damages.

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Indemnity and reversal of the penalty clause for delay in delivering a property

In analyzing the case, the reporting justice of the special appeal, Justice Paulo de Tarso Sanseverino, stated that the issue of delay in delivering a property has already been analyzed by the STJ on several other occasions. In March 2017, for example, the Third Panel determined in REsp 1.641.037 that moral damages for delay are only constituted in exceptional situations, which must be proven by the buyers.

In the case now judged, the developer’s delay was 17 months. In the action for indemnity and loss of profits, the buyer stated that the period of delay deprived him of taking advantage of “the high profitability of his real estate investment.”

Delay in delivering a property purchased for investment – no damage

Sanseverino stated that, in accordance with STJ case law, indemnity for loss of profits is due, but not compensation for moral damages, given that the property was not acquired for housing.

“Indeed, the loss of the opportunity to obtain returns from an investment is exclusively material damage, to be repaired through indemnity for loss of profits (already included in the conviction), there being therefore no question of moral damage.”

The Court of Justice of Rio de Janeiro (TJRJ) had set the amount of moral damages at R$ 10 thousand. The court’s understanding was that the breach of contract caused distress to the investor, who found himself prevented from using the negotiated property.

The appealed ruling was upheld with respect to the conviction for loss of profits during the period of delay. This news refers to the following case(s): REsp 1796760.

Source: STJ