Takeaway: The Brazilian Superior Court of Justice (STJ) has held that a property seller may remain liable for condominium debts incurred after the buyer has taken possession, if the purchase agreement has not been duly registered with the Land Registry. The Court emphasized that such debts are inherently linked to the property itself, rather than solely to its current possessor.

In a recent decision, the STJ examined a dispute involving a public housing company that had entered into a sale agreement but remained the formal owner of the unit in the land records. Although the buyers had taken possession, the condominium association initially filed a collection lawsuit against them and subsequently sought to include the seller as a co-defendant.

The seller argued that it should not bear responsibility for the outstanding condominium fees, as it no longer retained possession of or derived benefit from the property. However, the Reporting Justice, Minister Isabel Gallotti, clarified that liability for such obligations stems from formal ownership, which persists until the contract is registered.

The Court reaffirmed that condominium obligations are enforceable against the party who holds legal title to the property, irrespective of any private arrangements between buyer and seller. While possession may have transferred, the absence of registration means the seller remains the property's legal owner and, therefore, responsible for associated debts.

The ruling reinforces the legal importance of registering purchase and sale agreements with the appropriate land registry. Failing to do so may result in continued liability for sellers, particularly in relation to obligations that are legally attached to the property.

To access the full judgment (in Portuguese), click here.

TThe team at MAC Advogados has deep expertise in handling contractual and real estate disputes and is fully equipped to provide strategic guidance in light of the recent legislative changes and STJ interpretations. You can rely on us to safeguard your interests with professionalism, clarity, and security.