The development activity refers to the realization of a real estate project.
In this same sense, according to Law 4,591, of December 16, 1964, (Incorporation Law), real estate development consists
of the activity carried out with the aim of promoting the construction, for total or partial sale, of buildings or set
of buildings. buildings composed of units, through sales and purchase commitments or effective sale and purchase of
ideal fractions of land linked to future units in buildings to be built or under construction under condominium regime,
the developer being responsible for the delivery, within a certain period , price and certain conditions, of the
completed works.
The Incorporation Law regulates the incorporator’s rights and obligations, among others:
- only negotiate the sale of the units under construction after obtaining the registration of the incorporation in the
land registration at the Real Estate Registry Officer, whose application must be accompanied, mainly, by the following
documents: a) title of land property, or pledge , irrevocable and irreversible and duly registered purchase and sale; b)
negative certificates of federal, state and municipal taxes, of protest of titles, of civil and criminal actions and of
real encumbrances in relation to the land, the land alienators and the developer; c) construction project duly approved
by the competent authorities; d) calculation of the building areas, discriminating, in addition to the overall, that of
the common parts, and indicating, for each type of Unit, the respective built area footage; e) descriptive memorial of
the specifications of the projected work; f) discrimination of the ideal fractions of land with the Units that will
correspond to them; g) draft of the future condominium agreement that will govern the building;
- supervise the construction of the project provided for in the contract and in accordance with the approval granted by
government authorities;
- obtain the certificate of completion (“Habite-se”) of the enterprise;
- make the specification and institution of the building condominium, so that each unit can have its exclusive owner,
registering the built area of the project; and
- deliver the completed units to the purchaser, in accordance with the contractual specifications, and transfer the unit’s
direct ownership rights to the purchaser, by drawing up the public deed of sale and purchase.
The acquirer's main obligation, in turn, consists of paying the price relating to the ideal fraction of the land and the
construction. The construction of the incorporated project can be contracted and paid for by both the developer and the
final purchasers of the units.
The Incorporation Law provides for two construction regimes for the buildings to be incorporated: construction by
contract and construction by administration.
The construction under the contract may be of two different types, one at a fixed price, agreed before the start of
construction, and another at an adjustable price, using indices previously determined by the contracting parties.
In construction by administration, the purchasers of the properties under construction are responsible for paying the
full cost of the work, in the form of apportionment of the monthly expenses made by the developer or the builder, with
no previously determined price for the construction, but only estimated.