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1. Property Rights
1.1 Legal Framework
1.2 Registries
1.3 Formal Ownership
In-Country Assessment Information

1. Property Rights – Weak

 

Goal – Property rights that are legally protected, secure, recorded in a single, accurate, widely accessible electronic registry and that lead to high levels of formal ownership for all citizens

 

 

1.1 Legal Protection

Core Question: Does an effective and sufficient legal framework exist to protect property rights for all citizens? No –  Yes – Strong, the situation in Brazil has improved significantly in the last few years.

 

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1.1 Legal Framework

 

 

1.1.1   Are property rights clearly defined and protected by law?  Yes – Strong – Ranking 51st out of 139; Score 4.3 out of 7 Trend ↑

 

Security of Tenure

1.1.2   Can citizens challenge the legality of government takings? No – Weak –  61st out of  144; Score 3.8 out of 7 Trend ↑

Source: Global Competitiveness Report 2012-2013 – World Economic Forum
www.weforum.org/issues/global-competitiveness

 

Bundle of Rights

Survey Question

SQ1    What is the bundle of rights (group of rights such as occupancy, use and the right to sell or lease) associated with both residential and commercial property ownership? Strong –private ownership is allowed with limited government control.

 

 

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1.2 Registries

 

Core Question: Does a reliable property registry exist including cadastral, title and mortgage lien information? No – Weak, Brazil suffers from corruption in some public bodies so regulations may not always protect the interests of existing owners.


1.2.1  Cadastral Information

Status – Weak, while information is fairly available in large cities, information is unreliable in many areas.

 

Survey Questions

SQ 2   Is cadastral information (information about the dimensions and location of land parcels) accessible to the public? Yes

SQ 3   Is zoning/permitted use information included are use regulations respected and enforced? No – information is inconsistent between different municipalities.

SQ 4   Are Geographic Information Systems (GIS) including Global Positioning Satellite (GPS) information used to create and update the registry? No, the system lacks technical capacity and updated maps.

Civil Society Resource: Brazilian Society of Cartography www.cartografia.org.br/

 

1.2.2  Title Registry

Weak – Ranking – 109th out of 185  Trend ↑

1.2.2.1 What is the number of procedures required to register the transfer of a property from one owner to another? 14

1.2.2.2 What is the duration of time in calendar days that it would take to complete the transfer?  34

1.2.2.3  What is the total cost of the transfer including all fees, taxes, etc. expressed as a percentage of the value of the property? 2.7%

Sources – Doing Business 2013 – Registering Property, World Bank
www.doingbusiness.org/data/exploreeconomies/brazil; Association of Notaries & Registrars www.anoregsp.org.br/

 

1.2.3  Mortgage Registry

Status – Weak – the mortgage market is still small compared to other countries (smaller than Chile, Mexico and Panama.)

Survey Questions

SQ 5   The mandatory use of notaries or similar officials slows down and adds cost to the process. Does a notary need to be involved in the registration process? Yes

SQ 6   Is information in the registry available electronically? No

SQ 7   Title insurance is indemnity insurance against financial loss from defects in title and from the invalidity or unenforceability of mortgage liens. Is title insurance available to lenders? Yes, but mainly from U.S. Companies

Source – Financing Homes 2008, World Bank and International Housing Finance Corporation

http://www.cipe.org/sites/default/files/publication-docs/Financing%20Homes%202008.pdf  

 

 

 

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1.3 Formal Ownership

 

Core Question: Do citizens understand and trust property rights institutions and avoid the informal sector? No – Weak, strong in urban areas, but disputes are still common in peri-urban and rural areas.

 

Survey Questions

1.3.1  Land

SQ 8   What is the status of land ownership?  Weak – 84th out of  130, Score  5.7 out of 10 Trend ↓ Restrictions on foreign ownership of farm land have been introduced

Source: International Property Rights Index
http://www.internationalpropertyrightsindex.org/profile?location=Brazil

 

1.3.2  Home Ownership

SQ 9   What is the percentage of formal home ownership? Strong –71.1%Source: U.N. Habitat www.unhabitat.org

 

1.3.3  Informal Sector

What is the percentage of services firms that report competing with unregistered or informal firms? 55% – Very Weak Formal Sector (2009)

Source: Enterprise Surveys www.enterprisesurveys.org/ExploreEconomies/?economyid=28&year=2009

 

 

 

In-Country Assessment Information

 


Field Question (FQ) 1  Even if legal provisions exist, what is the actual status of  property rights and ownership for small businesses?

 

FQ 2   Are standard purchase contracts used for commercial properties? If  not, how are property purchases usually completed?

 

FQ 3   Do separate contracts or other means exist to hide value from authorities when registering property transactions?

 

FQ 4   Are standard leases used for commercial space? If not, what is a typical arrangement for rental?

 

FQ 5   What are the typical rates, terms and availability of office, retail, manufacturing and logistics facilities in both cities?

 

FQ 6   What are the processes for government expropriation of property especially notice and due process for owners? Are those laws followed or do expropriations happen by collusion between officials and connected elites?

 

FQ 7   Are businesses owners compensated fairly when their property is taken for public use?

 

FQ 8   What protections do businesses who lease space have from arbitrary eviction by owners?

 

FQ 9   What services are typically provided to tenants (common areas, public access, security) and what means of redress are available if services are not provided?

 

FQ 10  What is the actual experience of transferring a property, accessing the registry and dealing with registry officials?

 

FQ 11   How large is the presence of unregistered and/or illegal uses of  commercial property?

 

FQ 12 How large is the presence of informal markets for goods, i.e. itinerate vendors?