Brazil suspends restrictions on Foreigners Buying Real Estate

Minister André Mendonça, of Brazil's Federal Supreme Court (STF), ordered on Wednesday (26) the suspension of lawsuits challenging the legality of the law that regulates the purchase of rural properties by foreigners.

In the decision, Mendonça understood that the lawsuits in progress in the Judiciary must await the judgment of two actions that are under analysis by the Court.

The issue was brought to trial in the Supreme Court by agribusiness organizations. According to the allegations, filed in 2015, Law 5,709 of 1971 harms domestic companies with foreign capital by limiting the purchase of land in the country.

Legal certainty

The suspension of the proceedings was requested by the Brazilian Bar Association (OAB), which was also admitted by the minister to participate in the process. The entity alleged that the legal security of the issue should be preserved.

"The OAB understands that it is necessary to suspend all lawsuits and legal transactions that have as their object the application of the aforementioned legal provision, until the final judgment of ACO 2463 and ADPF 342, in order to preserve legal security on the issue," it justified. 

The Brazilian Rural Society (SRB), which is questioning the restrictions in the law, spoke out in Court against the paralysis of the processes.

"Even more glaring is the unreasonableness of the injunction request formulated. The suspension of all legal processes and transactions that have as their object the application of the legal provision whose constitutionality is being discussed would cause the paralysis of investments in sectors that are so relevant to the national economy," the society argued.

The date for the final judgment of the case has not yet been set.