The Third Panel of the Superior Court of Justice (STJ) decided that successful bidders for a property at a public auction have the right to the property, even with the existence of a prior purchase and sale contract for the asset between other persons, but not registered at the real estate registry office.
In modifying the second-instance understanding, the panel recognized that, until its regular registration with the competent body, the private agreement generates an obligation only between the parties involved.
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According to the rapporteur of the case, Justice Nancy Andrighi, the obligation toward third parties (erga omnes) only occurs with the real estate registration of the title, which was done only by the successful bidders. “From this perspective, in the absence of the formality considered essential by law to the transaction carried out, it cannot be admitted that the title is enforceable against the third party in good faith who judicially wins the bid for the property and promotes, in strict terms of the law, the registration of the deed of auction.”
Purchase contract
The property in dispute was the object of several sale transactions, all without effective registration of the transfer of possession, and was subsequently won at auction when it went to a sale in an enforcement proceeding.
In this way, it fell to the Third Panel to decide, in a special appeal, which right must prevail: the personal right of the alleged acquirers of the property, based on a promise of purchase and sale entered into by private instrument with the property’s previous promissory buyers, without annotation in the real estate registry; or the property right of the successful bidders for the property at a judicial public auction, who promoted the registration of the deed of auction at the real estate registry office.
Following the rapporteur’s vote, the panel held that the right to prevail is that of the successful bidders, since “ownership of the real property is only transferred with the respective registration of the title at the competent real estate registry office.”
The Justice said that her decision is not opposed to Precedent (Súmula) 84/STJ, which merely consolidates the thesis that the real estate registration of the title is not a requirement for the filing of third-party embargos.
Further according to the rapporteur Justice, although it is not a requirement for the filing of third-party embargos, the registration of the title “is indispensable for its enforceability against a third party who intends to assert over the property a right legally incompatible with the acquisitive claim of the promissory buyer.”
Source: STJ
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