Vanessa Salem Eid
Lawyer at Marcos Martins Advogados
The application of the “Price Table” in real estate purchase and sale contracts, especially those still under construction, has been common practice in the market for many years.
With the development of the real estate market, there has been an increase in the number of lawsuits disputing the application of the Price Table on the grounds that the way interest is calculated is abusive.
In a monocratic decision in Special Appeal No. 951.894/DF, the Superior Court of Justice (STJ) minister, Maria Isabel Gallotti, ruled out the presumption of illegality of the Price Table applied to the updating of real estate loan installments.
Originally, it was decided that the use of the Price Table is prohibited because it would lead to monthly capitalization of interest. The Court of Appeals of the Federal District and Territories upheld this view and also decided that due to the inherent unfairness of the way the debt is remunerated using the Price Table, it would not be necessary to produce the expert evidence requested by the defendant (who granted the financing for the purchase of the property by the plaintiff).
This situation has already been the subject of discussion in several other cases and the STJ’s jurisprudence has been consolidated “in the sense that if there is a discussion about the ‘legality of the use of the Price Table – even in the abstract’ – it will be essential for the parties to provide expert evidence, and it is not up to the judge to choose between one mathematical theory or another without using technical evidence”.
Justice Isabel Gallotti also considered that, “during the course of the contractual relationship, the value of the monthly installment is often so depreciated that it does not even pay the interest due for the period. In this case, there will be negative amortization, with the accrued interest becoming part of the outstanding balance, on which interest will again be charged. The same will happen if the borrower defaults. If the installments are not paid, the interest and monetary correction will be incorporated into the outstanding balance, on which new interest will be charged.” He concluded that “negative amortization is not, therefore, a consequence of the mere use of the Price Table formula, but of the mismatch between the adjustment of the monthly charge and the outstanding balance, or of the borrower’s default, or both”.
The discussion in question has become heated in the national courts, not least because, since expertise is essential, in many cases it is possible to prove that interest is being applied abusively. The prevailing understanding is that the practice of capitalized interest is allowed in exceptional cases and expressly provided for by law, such as art. 15-A of Law 11.977/2009, art. 6 of Law 4.380/64 – Housing Finance System; and art. 1 of Law 4.864/65 – Law to Stimulate Civil Construction). The STJ itself has already issued Precedent 539, allowing the application of interest capitalization with a periodicity lower than annual in contracts involving institutions that are part of the National Financial System.
Therefore, in the case of contracts between private individuals, Decree 22.626/1933 disallows the capitalization of interest, understood as the practice of anatocism. In such cases, the Price Table should not be applied and interest should be limited to 1% per month. This was the opinion of Judge Marivone Koncikoski Abreu, of the 1st Civil Court of São José/SC, who, in case 5003357-95.2019.8.24.0064, ruled out the application of the Price Table in a real estate purchase contract signed with a developer, determining that interest should be limited to 1% per month on all the installments paid[1].
The conclusion we have reached is that interference by the Judiciary in contracts of this nature only requires the application of technical criteria duly established by expert evidence when there is a mismatch between the updating of the monthly charge and the outstanding balance, regardless of the amortization system applied.
Marcos e Martins Advogados continues to follow the case law on the subject and its consolidation in order to provide swift and assertive assistance to all clients who may have a claim in this regard.
[1] “I JUDGE IN PART the requests formulated in the present revision action brought by Helena da Silva against Paysage Parque Verde Empreendimentos Imobiliários LTDA, in the form of art. 487, I, of the CPC, to: DECLARE the application of the Price Table undue, and interest should be limited to 1% per month, levied solely, in simple form, on each of the 120 (one hundred and twenty) monthly installments; CONDEMN the defendant to compensate or repeat the debt, in simple form, of the amounts unduly paid in accordance with this sentence in favor of the plaintiff, subject to monetary correction by the INPC since the undue payment and default interest of 1% per month, counted from the final judgment.”
