Takeaway: Brazil’s National Justice Council (CNJ) has issued new regulations allowing notaries to manage escrow accounts in connection with private contracts. Funds can now be held and released based on the fulfillment of contractually agreed conditions.

On June 13, 2025, Brazil’s National Justice Council (CNJ) issued Administrative Rule No. 197, establishing the first regulatory framework for notarial escrow accounts in extrajudicial settings.

In practice, notarial escrow accounts operate as secure holding mechanisms: one party deposits funds with a public notary, who is only authorized to release the money after verifying the fulfillment of pre-agreed conditions—such as the delivery of a property, completion of a contractual milestone, or performance of a specific obligation.

The legal basis for this service was introduced by Law No. 14.711/2023, known as Brazil’s Legal Framework for Secured Transactions, which amended Law No. 8.935/1994 to authorize notaries to act as custodians of funds. However, the practical use of escrow accounts by notaries still depended on further regulation—now addressed by CNJ’s Administrative Rule No. 197. The new rule sets forth clear requirements, operational standards, and safeguards. Importantly, it allows notarial escrow accounts to be used not only in public deeds, but also in private agreements, significantly expanding their utility in commercial transactions.

Under this framework, notaries may only disburse funds when the agreed-upon conditions have been objectively met. In the event of a dispute, the notary is required to suspend the release, record the situation in a formal notarial certificate (ata notarial), and await either a mutual resolution or a judicial decision. Funds are held in segregated escrow accounts administered by financial institutions authorized through agreements with the Brazilian Notarial Association (Colégio Notarial do Brasil), and are protected from third-party claims or attachments unrelated to the underlying transaction.

For example, in share purchase transactions, the parties may agree to deposit part of the purchase price into a notarial escrow account, with release conditioned upon the delivery of documents, transfer of assets, or fulfillment of contractual clauses. In the event of a dispute, the notary withholds the amount until the parties reach an agreement or a court decision is issued on the matter.

With clear rules, notarial escrow accounts now offer a formal, cost-effective alternative for the custody of funds—outside the court system and without the need for more expensive financial instruments.

Click here to access the full text of Administrative Rule No. 197.

The MAC Advogados team has been closely following this regulatory development and is ready to assist companies, investors, and stakeholders in structuring transactions involving notarial escrow accounts. Our goal is to provide clients with legal certainty, efficiency, and robust risk mitigation across a wide range of complex transactions.