Most Brazilians grew up hearing that investing in real estate is a safe way of protecting assets and earning income at the same time. If we consider that the Brazilian real estate market is one of the world’s largest, significant opportunities exist for attentive investors even in times of crisis.

However, buying, selling, or maintaining a real estate property requires several obligations often unknown to the general public. If those obligations are not met, many people feel at a loss at how to comply with them.

Besides, investors, contractors, developers, and large companies deal with significant bureaucratic obligations and cannot always manage real estate properly. More than knowledge, these situations require a strict control protocol to keep the various certificates inherent to the property up to date.

When combined, ignorance and lack of management result in approximately half of the real estate properties in Brazil facing some irregularity, according to data from the Ministry of Integration and Regional Development. This reality affects small and large owners alike.

How to regularize real estate?

Firstly, one must identify the nature of the irregularity, which normally concerns:

• the absence of a public deed;
• a lack of entry registration;
• the absence of the certificate of occupancy during construction;
• the absence of a business license; and
• the non-payment of fees or taxes, such as the real estate conveyance tax (ITBI)/the estate and gift tax (ITMCD), deed fees, registration fees, financing fees, brokerage fees, the urban real estate tax (IPTU), the income tax, and condominium fees.

Once the issue is identified, we can establish what action is needed to solve it. Then, the relevant documentation must be gathered, and the applicable amounts paid, to regularize any outstanding fees or taxes.

One must bear in mind that regularizing real estate can be a significantly expensive process, and small mistakes can become a huge headache. The best way to avoid getting overwhelmed with fees, taxes, and documents when dealing with real estate is to hire specialized and qualified professionals to deal with this type of process.

Real estate documentation management

Managing a large portfolio of real estate properties is a task that requires strict methods and trained professionals who can deal with the complex bureaucracy involved. This is highly important not only to facilitate a possible liquidation of real estate but also to ensure that the company is able to take advantage of business opportunities requiring strict tax and accounting compliance.

Participation in acquisition, merger, sale, court-supervised reorganization, bankruptcy, or bidding processes, among others, requires companies to maintain strict document regularization. In this context, a simply expired certificate could delay or even make an operation vital for a company’s survival unfeasible.

In a country like Brazil, where bureaucracy is chaotic, neglecting such a critical activity can have grave consequences.

Conclusion

Keeping documentation updated is essential for large companies to remain competitive and permanently prepared to embrace business opportunities. However, dealing with the various Municipal, State, and Federal regulations affecting real estate is not a task for unskilled personnel.

The PLBrasil Group has broad experience in controlling and managing real estate documentation and managing the process of obtaining and maintaining permits, registrations, accreditations, records, and licenses. Reach out, learn about our Digital Platform that streamlines certificate management, and count on the help of people with over 15 years of experience in developing due diligence solutions.