A fiduciary sale is a form of security whereby the debtor transfers the resolvable ownership of the property to the creditor. As long as the debt is being regularly paid, the debtor is guaranteed possession and enjoyment of the property, and at the end, when the debtor finishes paying off the debt, full ownership is returned to the debtor.

In the event of default, the creditor has the right to satisfy their credit through the sale of the property, and the procedure is fully regulated by law: after the debtor is put in default, the property ownership consolidates in the creditor’s name, and from there, auctions are designated for the sale of the property.

The issue brought to judgment concerned the exact moment when the debtor must vacate the property in case of default: the creditor filed for repossession immediately after the consolidation of the property in their name, but the debtor argued that the transfer of possession should only occur after the auctions were held.

The prevailing understanding in the Superior Court of Justice (STJ) favored the creditor’s argument, and it was unanimously decided that from the moment the property is consolidated in the creditor’s name, the debtor is already irregularly in possession of the property, characterizing wrongful possession.

This understanding arises from the systematic interpretation of the institute and also from the literal interpretation of the law, as there is an express provision stating that the fiduciary debtor must pay an occupancy fee to the fiduciary creditor or their successor from the date of consolidation of the property in the creditor’s estate, from which it is implied that this is the temporal mark that establishes the moment when possession is unjustly exercised by the debtor. (Art. 37-A, Law 9.514/97)

The decision was rendered unanimously in the judgment of RESP 2.092.980/PA. For more information, please contact us.

By  Ana Carolina Almeida Ribeiro e Roger Ribas