Construction Delay in Real Estate Projects: What Are the Buyer’s Rights?

The purchase of off-plan properties has become a common practice in the Brazilian real estate market, particularly in large urban centers. The possibility of acquiring a property under more accessible payment conditions and following the appreciation of the development during the construction period often attracts buyers interested both in housing and in investment opportunities.

Despite the advantages associated with this type of acquisition, one of the most frequent situations faced by buyers is the delay in the delivery of the property by the developer or construction company. When this occurs, several questions naturally arise: is the developer allowed to delay the construction? Is there a grace period for the delivery of the property? Can the buyer claim compensation? Is it possible to cancel the contract?

These are common questions and require careful analysis.

In general, contracts for the purchase of off-plan properties establish an expected date for the completion of the construction and the delivery of the units to the purchasers. It is also common for such contracts to include a tolerance period for the completion of the construction, usually up to one hundred and eighty days after the originally scheduled delivery date.

Brazilian courts generally consider the existence of this additional period to be valid, provided that it is expressly provided for in the contract executed between the parties. However, when the development is not completed even after the expiration of this tolerance period, an unjustified delay in the delivery of the property may be characterized, potentially constituting a contractual breach by the developer.

In these circumstances, it is natural for the buyer to wonder: what rights does the purchaser have when the developer delays the construction?

A delay in the delivery of the property can result in significant financial losses for the buyer. In many situations, the purchaser must continue paying rent while waiting for the completion of the construction or may experience disruptions in financial and personal planning due to the inability to use the property within the originally expected timeframe.

In light of these circumstances, Brazilian case law has recognized that significant delays in the delivery of the development may give rise to the buyer’s right to seek compensation for damages resulting from the construction delay, depending on the specific circumstances of the case.

Another frequent question concerns the possibility of canceling the purchase of the property due to construction delays. In certain situations, when the delay becomes excessive or undermines the buyer’s interest in maintaining the contract, it may be possible to terminate the contractual relationship.

In such cases, the buyer may request the refund of the amounts paid, a situation that in Brazilian real estate law is commonly referred to as real estate contract rescission, known locally as distrato imobiliário. The decision to terminate the contract or to maintain it and seek compensation depends on several factors, including the duration of the delay, the contractual provisions and the buyer’s own interests.

For this reason, each situation must be analyzed individually. Contracts for the purchase of off-plan properties usually contain specific provisions regarding the delivery schedule, the tolerance period for construction, contractual penalties and the conditions for contract termination.

Thus, when facing a delay in the delivery of a property, buyers often seek to understand what steps should be taken when a developer delays the construction and which legal measures may be available to protect their rights.

A proper legal analysis of the contract and the circumstances surrounding the delay is usually essential in order to evaluate the available alternatives and determine the most appropriate measures to protect the buyer’s financial interests.

Bocchini Real Estate Law provides legal assistance in the analysis of contracts and matters related to construction delays in real estate developments, offering legal guidance to buyers facing situations of this nature.