On March 12, 2025, the 2nd Section of the Superior Court of Justice (STJ) decided, by majority vote, that it is possible to seize properties financed with a fiduciary alienation clause in order to collect condominium debts. This decision has important implications for both creditors of condominium debts and buyers of financed properties.
Fiduciary Alienation and sits implications
Fiduciary alienation is widely used in real estate financing. In this type of contract, the bank or financial institution grants credit for the purchase of the property, retaining ownership of the asset until the loan is paid off. The buyer, in turn, only has possession of the property, without being able to transfer or sell it until the debt is paid off.
This legal relationship between the fiduciary debtor and the fiduciary creditor raises questions about liability for the payment of condominium debts in the event of default by the buyer, since he does not yet have full ownership of the property.
See also: Termination of purchase and sale agreement: case of late registration
A decision of the 2nd section of the STJ
The STJ ruled on three appeals (REsp 1.929.926, REsp 2.082.647 and REsp 2.100.103) on the possibility of seizing a property financed to pay condominium debts. The panel, made up of 9 justices, decided by 5 votes to 4 that the attachment of the financed property is permitted. The winning argument was put forward by Justice Raul Araújo, who was joined by Justices Moura Ribeiro, Isabel Gallotti, Daniela Teixeira and João Otávio de Noronha, based on the propter rem (“related to the property”) nature of the condominium obligation, i.e. the debt is linked to the property, regardless of who owns it.
Thus, even if the bank is the fiduciary owner of the property, the buyer, who has possession and usufruct of the asset, must be held responsible for the debts that fall on it, including condominium debts. In the event of default, the bank may be obliged to settle the debt and subsequently collect it from the debtor.
Impacts for the merket imarket and the condominants
The STJ’s decision has profound implications for the real estate market, especially for buyers of financed properties. The possibility of seizing the property to pay off condominium debts can be seen as an advance in the protection of condominium owners, ensuring that debts associated with the property are paid, even if the debtor is not the full owner of the asset.
On the other hand, the decision also places greater responsibility on the banks that are fiduciary creditors, who may be called upon to pay off the condominium debts on behalf of the defaulting buyer. This situation could lead to an increase in operating costs for financial institutions, which could pass this cost on to fiduciary debtors through new contractual clauses.
In addition, the decision reinforces the importance of the fiduciary alienation clause in real estate financing contracts, since it provides greater legal certainty for creditors. Banks will now have a more active responsibility in relation to condominium debts, which may lead to a review of contracts to include clearer provisions on the payment of these debts.
See also: Eviction action for non-payment of rent: STJ decides that Judicial Recovery does not interfere
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