How to cancel the purchase of an off-plan property and recover your money

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 many buyers, whether for personal residence or investment purposes.

However, the initial planning does not always unfold as expected. Financial difficulties, changes in professional or family circumstances, delays in the completion of the construction, or even issues related to obtaining financing may lead the purchaser to reconsider the acquisition of the property.

In such situations, a frequent question arises: is it possible to cancel the purchase of an off-plan property and recover the amounts already paid?

The answer depends on the specific circumstances of each case, but, in general, Brazilian law allows for the termination of real estate purchase agreements while the property is still under construction. This contractual cancellation is known as real estate contract rescission, commonly referred to in Brazil as distrato imobiliário.

A contract rescission occurs when one of the parties decides to terminate the agreement before its definitive completion. In the case of off-plan property purchases, this means that the buyer chooses to withdraw from the acquisition and terminate the contractual relationship with the developer or construction company responsible for the project.

Brazilian legislation began to expressly regulate this situation with the enactment of Law No. 13,786/2018, commonly known as the Real Estate Rescission Law. This statute established clearer rules governing the termination of real estate development contracts, particularly regarding the refund of amounts paid by the purchaser.

In general terms, the law allows the buyer to withdraw from the acquisition; however, it also establishes that the developer may retain part of the amounts paid as compensation for administrative expenses, marketing costs, and other charges related to the project. The exact percentage of retention, however, depends on the provisions of the contract and the specific circumstances of each case.

In certain situations, the amounts retained by the developer may be considered excessive or disproportionate, in which case the contractual provisions may be challenged in court, particularly when there are indications of contractual imbalance or abusive clauses.

Another common scenario occurs when the purchaser decides to terminate the contract due to delays in the completion of the development. Although contracts frequently provide for a grace period for the completion of the construction, significant delays may characterize a contractual breach by the developer.

Depending on the circumstances, the purchaser may choose either to maintain the contract and seek compensation for damages resulting from the delay or, alternatively, to terminate the agreement and request the restitution of the amounts paid.

Each situation, however, has its own particularities that must be carefully analyzed. Contracts for the purchase of off-plan properties often contain specific clauses concerning rescission, retention of payments, refund deadlines, and contractual penalties, making a thorough legal analysis essential before any measure is taken.

For this reason, purchasers facing situations of this nature often seek legal guidance in order to evaluate the available options, understand the consequences of the rescission, and identify the most appropriate measures to protect their financial interests.

Bocchini Real Estate Law provides legal assistance in the analysis of contracts and matters related to real estate rescissions, offering legal guidance to purchasers facing such situations.