Below is an edited transcript of a selection of interview questions directed at Alex Ferreira Magalhães, Professor of Urban and Environmental Law at the Federal University of Rio de Janeiro and author of Os Direitos das Favelas (The Legal Rights of Favelas), with questions provided by students visiting from the Real Estate Appraisal and Assessment Program at Lakeland College (Canada).
What is the most common system for registering land in Brazil?
The most common is a system which does not give you absolute certainty that you are the owner. People can question your ownership. You are presumed the owner as long as you are not questioned on your property. If someone questions it, you have to investigate if you are the owner or not.
The torrens system, which is another of the two or three land registration systems here, doesn’t allow this possibility. In the torrens system, you are the owner, and there is no doubt about that. However, it’s not commonly used. We have noticed, for example, in the state of Goias, in the center-west region of Brazil near where the capital Brasília is, that the torrens system is used in rural areas, but not in urban areas.
The most common system does not give you that level of certainty. But people don’t feel insecure because of that. People in general feel secure and think that the system is enough and is alright, so it’s largely used. The problem is a large number of people don’t have a legal title record. The property is not registered so people have a title of purchase, but not a record. That’s the problem.
For example in the French system, when you purchase the property, you are considered the owner. You don’t have to record the title, you are not obliged to do that. That’s not true in Brazil. In Brazil, you have a contract of purchase, of land. You are not already the owner because you have to pick this title and present it to the real estate registry and then once you get the record, you are considered the landowner.
Why doesn’t every homeowner record their land so there’s no doubt about the title?
Because it’s a longer, more delayed, and more difficult process. You have to get all the proof you would need for an eventual judicial action over the asset at the Registry. And it’s proof anticipating an eventual challenge. You economize work and money by not going to these lengths just in case.
Is there any registration fraud?
Fraud is a big thing in the Brazilian legal system. American researcher James Holston has written a lot on this. One symptomatic example: around ten years ago, the National Justice Council, an organ that regulates the Brazilian courts, decided to do a full inquiry into the registries of the state of Pará in the north of Brazil, at the mouth of the Amazon. They discovered that the sum of the properties registered at the registries in Pará, if you total the quantity of land recorded, was twice the area of the territory. It was an enormous fraud. Fraud is extremely common because the system is not trustworthy and doesn’t work well. We’ve seen some progress in the last forty or fifty years, but fraud still occurs.
Wouldn’t people want to get their land registered to ensure there is no fraud (if they don’t anticipate a challenge) regarding the property that they’re purchasing, or to ensure that someone doesn’t have a second registration on it?
The system gives you some ways to defend yourself and your land so you have some guarantees. And we have a kind of culture in Brazilian courts where it’s very difficult to dispute information from a Notary. Generally, a judge trusts what the Notary tells them. There is a strong culture of defending ownership. The landowner historically has strong political power. The Brazilian State is dominated by these people.
How is property tax established and how much is paid per property?
It is a multi-step process. The first step is that the City government registers the real estate. The second step is that the City government evaluates the value of the real estate. The third step is that the City government decides based on that value how much it will charge. This value decided upon in the third step is called valor venal (venal value).
But there is also a dynamic of the influence of landowners over public management. Many landowners manage to not be heavily taxed.
Who is exempt from paying property taxes in Brazil?
Religious institutions, any place of worship, though that doesn’t extend to where the religious leader lives. There are some other cases such as small rural properties and public properties. The municipality cannot tax state or federal assets. International representatives are exempt too, such as embassies. There are also some exemptions for low-income housing but it is a decision of each municipality to create this or not, the system doesn’t obligate the municipality to do this.
In favelas, when they receive rights to their land, do they receive title, or a limited time lease?
Both are possible. The concept of how to title the lands is a political decision. Honestly, there are many people who think you shouldn’t give titles in favelas because then they are more exposed to expulsion by market forces. You can have titles of other types for a certain period of time, but a decently long period of time, like 99 years.
Just to give an example, a few months ago I was in a favela in Niterói where the Rio state government was giving concession of use titles (titulos de concessão de uso) because they feared that if they gave over the land fully, the resident would become landowner and the City government would expropriate them from their lands. When you have a private owner, any government can expropriate. But when you have a concession of use, you are on public property, so one public entity cannot expropriate the assets of another.
Is Vila Autódromo some kind of exception to this, since it is state land, but the city is expropriating residents?
It’s a case that is being studied today as an example of what we call the state of exception, or rights of exception. There’s a famous book by Italian author Giorgio Agamben called State of Exception, which is a theoretical reference on this topic. It has been widely read and debated in the academic world here. In Vila Autódromo, despite being public land with concession of use, they are being expropriated. It is a process that is legally questionable.