Eviction: Concept, Requirements, and the Right to Compensation Under the Brazilian Civil Code

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

Eviction occurs when the buyer of an asset loses possession or ownership because of a court or administrative decision that recognizes a third party’s earlier right. The Brazilian Civil Code guarantees the evicted party full compensation.

Concept and Legal Basis of Eviction

Eviction is governed by Articles 447 to 457 of the 2002 Civil Code and is a statutory warranty in contracts for value. It occurs when the buyer of an asset (the evicted party, or evicto) is deprived of the asset, in whole or in part, by a court judgment or administrative act in favor of a third party (the evictor) who proves an earlier right to it.

The warranty against eviction rests on a simple principle: the seller must ensure that the buyer enjoys peaceful possession and ownership of what was transferred. If a seller conveys something that did not belong to him, or that carried an encumbrance the buyer did not know about, the seller answers for the buyer’s loss. This responsibility does not depend on fault. It is enough that the loss stems from a cause that existed before the contract.

Eviction may be total, when the buyer loses the asset entirely, or partial, when the loss affects only part of the asset or one of its attributes. In a considerable partial eviction, the evicted party may choose between rescinding the contract and receiving a proportional refund of the price (Article 455). When the loss is minor, only proportional compensation is available.

Requirements for Eviction

Three essential requirements must be present for eviction to exist and for the right to compensation to arise. The first is acquisition for value, because the warranty against eviction is inherent in bilateral contracts in which each side gives something in return. In gratuitous contracts (gifts, loans for use), eviction does not, as a rule, give rise to compensation unless the contract expressly provides for it.

The second requirement is the total or partial loss of possession or ownership through a final and unappealable court decision or a definitive administrative act. The case law of the STJ (Brazil’s Superior Court of Justice), however, has relaxed this requirement. It now recognizes eviction when the loss results from an administrative seizure of the asset, such as a vehicle flagged for theft or robbery and seized by the police.

The warranty against eviction rests on a simple principle: the seller must ensure that the buyer enjoys peaceful possession and ownership of what was transferred.

The third requirement is that the cause of the loss predate the acquisition. If the defect that led to the loss arose after the asset was transferred, the situation is not eviction but a different kind of liability. In addition, the evicted party must have been served in the lawsuit filed by the third party and must have brought in the seller through third-party impleader (denunciação da lide) (Article 456 of the Civil Code and Article 125 of the CPC/2015, Brazil’s 2015 Code of Civil Procedure), although case law allows exceptions.

Rights of the Evicted Party and the Extent of Compensation

Article 450 of the Civil Code lists the rights of the evicted party. In addition to a full refund of the price paid (adjusted for inflation), the evicted party is entitled to compensation for the fruits (yields) he was required to return to the third party, for the costs of the contract (deed, registration, transfer taxes), and for losses directly caused by the eviction, including attorney’s fees spent on the defense.

If the asset deteriorated through the fault of the seller or of prior owners, the evicted party is also compensated. On the other hand, if the evicted party himself caused the deterioration, the corresponding amount is deducted from the compensation. Necessary and useful improvements made by the evicted party that the evictor has not reimbursed are likewise owed by the seller.

In practice, compensation for eviction aims to put the buyer in the position he would have been in had he never signed the contract. For that reason, it covers not only the price paid but also all expenses and losses arising from the failed transaction, including inflation adjustment of the amounts spent over time.

Clauses Excluding or Reinforcing the Warranty

Article 448 of the Civil Code allows the parties, by express clause, to reinforce, reduce, or exclude the warranty against eviction. Even with an exclusion clause, however, the evicted party is entitled to a refund of the price paid, unless he entered into the contract aware of the risk of eviction (Article 449). A waiver of the warranty must be express and unequivocal. It is never presumed.

A clause reinforcing the warranty may provide for additional compensation beyond what the law requires, such as a contractual penalty or coverage of non-pecuniary (moral) damages caused by the loss of the asset. In real estate purchases, reviewing the chain of title in probate is an essential step to prevent eviction, checking whether there are any pending claims or disputes over the property.

Frequently Asked Questions

Does eviction apply to the purchase of used vehicles?

Yes. Eviction is common in used-vehicle purchases, especially when the vehicle is flagged for theft or robbery, is subject to an unpaid fiduciary lien (alienação fiduciária), or has been judicially attached. If the police or a court seizes the vehicle because of a third party’s earlier right, the buyer may sue the seller for eviction and demand a refund of the price and compensation for all losses.

Is third-party impleader of the seller mandatory to exercise the right against eviction?

Article 125, item I, of the CPC/2015 provides for third-party impleader of the seller when the buyer is sued by a third party. The STJ’s case law, however, has held that failing to bring in the seller does not prevent the evicted party from later filing a separate action against the seller. Impleader is advisable for procedural efficiency, but leaving it out does not forfeit the substantive right to compensation.

Can eviction occur in a judicial auction purchase?

The question is disputed. The Civil Code provides that the warranty against eviction remains in force in judicial sales. Some case law, however, holds that the winning bidder assumes the risks inherent in buying at a public auction, especially when the auction notice discloses pending claims. The STJ has examined these cases one by one, checking whether the bidder knew of the specific risk of eviction.

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