A property purchase and sale agreement is made in writing and signed, by signature, by two or more people. In that text are descriptions of the asset to be acquired, under what circumstances, by whom and what are the current clauses. 

Everything is negotiated and agreed between the parties before being signed, since it establishes obligations and duties of both.

But, after all, when is it possible to terminate the property purchase and sale agreement? And what happens next?

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PROPERTY PURCHASE AND SALE AGREEMENT AND TERMINATION PENALTY: WHAT DO YOU NEED TO KNOW?

Although it is not mandatory for the purchase and sale of property, it is highly recommended that a contract be drawn up to bring more security to the parties. The ideal is that it is even made official at a notary, since the so-called “drawer contracts” (informal contracts) are less secure. 

As with any other contractual document, it is possible to have a contract for the purchase and sale of property. This termination can happen in several ways, for example:

• Caused by the willingness of both parties not to proceed
• When a party does not fulfill its contractual rights and obligations and causes the termination of the contract
• When a party no longer wants to be part of that contract, even if it entails penalties

HOW TO CANCEL THE PURCHASE AND SALE OF PROPERTY?

Anyone seeking to terminate a property purchase and sale contract needs to contact the other party, inform them and, thus, both sign a termination term, which puts an official end to existing obligations. 

If there are clauses that penalize termination under certain conditions, whoever has broken the contract must pay for them. These clauses are always written in the contract, so they are not a surprise.

Remember: if you are in doubt about something in the property purchase and sale agreement, ask! Only sign a contract after you understand everything very well.

WHEN DOES THE TERMINATION OF THE CONTRACT GIVE A FINE?

It all depends on how the contract is drafted and what are the clauses that govern it . If a clause provides for a fine or other type of penalty for not being fulfilled by one of the parties, it is possible that the other party will make the charge at the time of termination of the contract.

It is worth mentioning that the amount of the severance fine is also stipulated between the parties, so there is no fixed amount. 

Let's take a practical example: in the case of used properties, the payment of a down payment of between 5% -10% of the value of the property is usually stipulated. In the event of unjustified termination of the property purchase and sale contract by the buyer, this amount remains with the seller. If it is a justified termination (ie, provided for in the contract), the seller has to return it to the buyer - often twice, according to the signed contract.

Remember that a contract brings the will of the parties so it is possible to articulate clauses that make sense for both parties - such as giving up the deal in such a period of time, or under such conditions, without a fine.

CONSUMER LAW AND ABANDONMENT OF PROPERTY PURCHASE: HOW DOES IT WORK?

The cancellation, which is the name given to the termination of the contract, is provided for in the Civil Code, but what is written in the Consumer Protection Code does not apply to the termination of a contract for the purchase and sale of used properties .

In other words, Consumer Law does not legislate on the abandonment of property purchases among private persons. 

In its section on the subject, the Procon recommends to make a careful reading "of the purchase and sale agreement, which must be written clearly and legibly. Clauses that limit consumer rights must be highlighted”.

Action for rescission of property purchase and sale contract: lawyer explains the details on TV Creci

AND THE TERMINATION LAW, WHAT IS IT?

Since when it comes to real estate purchased the plant, between buyer and builder, the discussion is another.

Since 2018, there has been in Brazil the Cancelation Law, applied only to property purchase and sale contracts at the plant. The buyer can withdraw from the purchase within 7 days (subject to certain conditions) and receive 100% of the amount paid. 

After this period and before handing over the keys, the termination of the property purchase and sale agreement at the plant (the cancellation of property purchase at the plant) requires payment of a fine to the construction company. 

The amount that remains with the construction company is now up to 50% of what has already been paid - it depends, of course, on what is written in the contract. 

HOW CAN THE LEGAL TEAM AT LOFT HELP YOU?

Loft's legal team advises clients at each stage of the process, from the drafting of the contract between the parties (seller and buyer) to the documentary analysis of the property (checking for risks and pending issues) and assistance with the public deed and / or real estate financing.

Thinking about the problems surrounding the termination of a property purchase and sale contract is perfectly normal, since it is a major legal and financial decision. Loft is available to help you at that moment, whether you are a potential seller or property buyer!