Brazil’s Superior Court of Justice Takes Up Repetitive-Appeals Case on Rescinding Real Estate Contracts with Unregistered Fiduciary Liens

This page is a translation of the original Portuguese text, provided for convenience. It deals with Brazilian law. If there is any discrepancy, the Portuguese version prevails. Read the original in Portuguese

The Second Section of the Superior Court of Justice has sent a set of appeals into the repetitive-appeals procedure to decide whether rescinding a real estate contract with a fiduciary lien that was never recorded at the registry office is governed by the specific statute or by the Consumer Protection Code.

Topic 1,420 Selected by the Second Section

In a decision made public on April 23, 2026, the Second Section of the Superior Court of Justice (STJ, Brazil’s top court for federal non-constitutional law) selected Special Appeals 2.228.137, 2.226.954 and 2.234.349 for the repetitive-appeals procedure, with Justice Nancy Andrighi as rapporteur. The court’s database has registered the dispute as Topic 1,420.

The question is which legal regime governs the rescission of a real estate purchase and sale contract secured by a fiduciary lien (alienação fiduciária, a security interest in which the creditor holds title to the property until the debt is paid) when that lien was never recorded at the registry office. On one side is the application of Law 9.514 of 1997. On the other is the application of the Consumer Protection Code.

In proposing the selection, the rapporteur noted that the private-law panels of the STJ have ruled on this issue many times, some of the rulings quite recent, and that there is no uniform position on it. She identified two decisive factors for sending the issue to the sampling-based procedure: the large number of appeals on the subject and the need for a thesis that can be applied to similar cases.

How This Differs from Topic 1,095

The selection of Topic 1,420 builds on the ruling the Second Section issued in Topic 1,095. There, the panel held that when a purchase and sale contract for real estate is secured by a fiduciary lien properly recorded at the registry office, and the debtor has been formally placed in default, rescission for nonpayment must follow the procedure set out in Law 9.514 of 1997. The Consumer Protection Code does not apply.

In the rapporteur’s view, a specific question remains open for contracts that contain a fiduciary lien clause but were never recorded in the real estate registry. Without registration, the security interest itself is never created, which has led to disagreement among scholars and courts over which legal regime governs the termination of the agreement.

There is still no consensus on which law applies to the rescission of contracts that were not recorded at the registry office.

A thesis set under the repetitive-appeals procedure will bind the lower courts and standardize the handling of disputes that recur on a large scale across the country. The impact reaches developers, consumers, financial institutions and real estate market participants who sign purchase and sale commitments with a fiduciary security clause that has not been formalized at the registry.

Suspension of Cases and Practical Effects

The Second Section ordered the suspension of all pending cases that raise the same issue and in which a special appeal or an appeal against the denial of a special appeal (agravo em recurso especial) has been filed, whether in the appellate courts or in the STJ itself. The stay covers cases pending before state courts of justice and federal regional courts where the issue has been raised.

The Code of Civil Procedure governs the repetitive-appeals procedure in Articles 1.036 and following, which allow judgment by sampling: a few special appeals raising an identical question are selected to represent the rest. By selecting a case for this procedure, the STJ gives a standardized answer to claims that keep recurring in Brazilian courts, which saves judicial resources and strengthens legal certainty.

In practical terms, the outcome of Topic 1,420 will affect disputes involving late payments, requests to retake the property, and arguments about curing the default. Depending on the thesis the court adopts, either the Law 9.514 of 1997 procedure, which provides for an out-of-court process, or the Consumer Protection Code regime, which gives the buyer stronger protection, will apply. If you want to understand the scope of a security interest or the effects of a breach of contract, you can learn about the firm’s practice areas.

What This Means for Buyers and Sellers

The choice of legal regime for rescission has different consequences for each side of the contract. If the court decides that Law 9.514 of 1997 governs even without registration, the creditor may use the out-of-court procedure to consolidate ownership of the property, provided it gives the required notice to place the buyer in default and observes the deadlines in that statute. If instead the binding thesis holds that the Consumer Protection Code applies, retaking the property will require a lawsuit and the return of money to the buyer, following the standards already established in consumer case law.

The dispute bears directly on contracts for off-plan purchases (real estate bought before construction is finished), where recording the fiduciary lien is often delayed for operational reasons tied to the registration of the individual unit. In those cases, the lack of registration comes from the progress of the development, not from any default by the parties. The STJ’s interpretation could change how developers structure their purchase contracts, especially clauses on retaking the property, compensatory penalties and the refund of amounts paid.

Buyers who are in a dispute over how a contract ends should keep in mind that the stay imposed by Topic 1,420 covers special appeals and appeals against their denial, but it does not stop a case from moving forward in the lower courts until those appeals are filed. Trial court decisions and state appellate rulings continue to be issued, although they may later be reviewed in light of the thesis the Second Section sets.

Frequently Asked Questions

When does a fiduciary lien contract require registration at the registry office?

A fiduciary lien on real estate is created only when it is recorded at the real estate registry office. Without registration, the agreement still binds the parties as a matter of contract, but it does not produce all the usual effects of a security interest, including against third parties. That is why courts disagree about which law governs rescission.

What is the difference between Topic 1,095 and Topic 1,420?

Topic 1,095 set the rule for contracts with a properly recorded fiduciary lien, applying Law 9.514 of 1997. Topic 1,420 deals specifically with contracts in which the fiduciary lien was never recorded, and its thesis has yet to be set. The difference matters because it determines the procedure for retaking the property and the buyer’s rights.

What happens to cases in which this question is already being argued?

The STJ has suspended all special appeals and appeals against the denial of special appeals that raise the same issue. In practice, the lower courts must wait for the Second Section to set the thesis before they rule. The stay keeps results consistent and prevents conflicting decisions until the issue is finally decided.

As informações deste artigo são de caráter informativo e não substituem consulta jurídica individualizada. Cada caso possui particularidades que exigem análise específica.