Two questions haunt every pre-construction buyer: "what if I need to back out?" and "what if the building gets delayed?" Before 2018, the answer varied from contract to contract, from judge to judge. Today there's a specific law that answers both — and every high-end agent should be able to recite the numbers from memory.
Why this is the second question every investor asks
Compare the two scenes below — the same worry, two different agents:
- Agent who doesn't know: client asks "what if I back out after signing?" Answer: "you'll lose a bit, but it works out." The client signs without knowing if they'll lose 10% or 50% of what they paid.
- Agent who knows: same question. Answer: "Brazil's Distrato Law sets this: up to 25% penalty if the development isn't under asset segregation, up to 50% if it is — but with a different refund timeline for each case. Let me show you exactly which scenario applies to this launch." The client decides with real numbers in hand, not with "it'll be fine."
What the Distrato Law is
Brazilian Law 13.786/2018 amended the Real Estate Development Law (4.591/1964) and the Land Subdivision Law (6.766/1979) to regulate what happens when a pre-construction contract is terminated — whether the buyer backs out or the building is delayed too long. Before it, every case became a slow legal dispute, with different courts ruling differently. It brought fixed numbers.
If the buyer backs out: penalty and refund timeline
Here's the detail fewest people know — and it connects directly to asset segregation (patrimônio de afetação):
| Situation | Penalty on amounts paid | Refund timeline for the balance |
|---|---|---|
| Development WITHOUT asset segregation | Up to 25% | Up to 180 calendar days after termination |
| Development WITH asset segregation | Up to 50% | Up to 30 days after the occupancy permit ("habite-se") |
How it works WITHOUT asset segregation: the money the buyer paid isn't ring-fenced — it went into the developer's general cash flow, alongside money from other projects and other company debts. That's why the refund deadline is a fixed 180 calendar days from termination: it's the time the law gives the developer to reorganize its cash and return the balance, without depending on any specific construction milestone.
What the occupancy permit is: it's the certificate the city issues confirming construction was completed according to the approved plans and safety codes — it's what allows the property to be legally occupied and registered individually under its own title. Without it, the building isn't officially finished, even if it looks done from the outside. WITH asset segregation, on the other hand, the money sits in an account dedicated exclusively to that project — which is why the law ties the refund to a concrete construction milestone (the occupancy permit) instead of a fixed calendar deadline.
Notice the trap: asset segregation protects the buyer if the developer goes bankrupt (as covered before), but the penalty for backing out can be double — and the refund can take longer if the occupancy permit is still far off. That's not a reason to avoid segregated developments (the bankruptcy protection is worth far more), but it's information that changes the decision for someone on the fence.
If the building is delayed: the 180-day tolerance
The law allows contracts to include a tolerance of up to 180 calendar days beyond the planned delivery date — as long as that clause is written clearly and prominently in the contract, not buried in fine print. Once that period passes without delivery, the buyer gains three rights at once:
- A late penalty of 1% per month on amounts already paid, for each month of delay beyond the tolerance.
- Compensation for lost profits (e.g., rent income missed, if the property was bought as an investment).
- The option to terminate the contract with a full refund, if they'd rather back out than wait.
Example — calculating the delay penalty: a buyer has already paid R$400,000 on a property that's 4 months late beyond the 180-day tolerance:
| Step | Math |
|---|---|
| Monthly penalty | 1% × R$ 400,000 = R$ 4,000/month |
| 4 months of delay (beyond tolerance) | R$ 4,000 × 4 = R$ 16,000 |
That R$16,000 is just the late penalty — not counting any lost-profits compensation, which is calculated separately.
The right to withdraw: the 7 days few people use
If the contract was signed outside the developer's headquarters or a sales booth — for example, at a fair, an event, or fully online — the buyer has 7 calendar days from signing to withdraw with no justification and no penalty. The developer must refund everything, including the brokerage commission. This right doesn't exist if the signing happened inside the official sales booth — it's worth knowing exactly where the contract was actually closed.
The summary box: the shortcut to see it all at once
The same law required developers to include a summary box at the start of the contract, with the most important points highlighted — not scattered across 40 pages of clauses. It must include, at minimum:
- Total price and brokerage fee;
- The installment adjustment index (direct link to the post on Selic, CDI, IPCA, IGP-M, INCC and CUB);
- Delivery deadline and tolerance;
- Penalty percentage in case of termination and refund timeline;
- Whether the 7-day right of withdrawal applies.
If the contract doesn't have this summary box visible right at the start, that's already a warning sign.
In practice: what to ask before signing
- Is this development under asset segregation? If so, the penalty for backing out is up to 50%, not 25%.
- What's the tolerance period in the contract? Confirm it's in a clear, prominent clause, not fine print.
- Where exactly will I sign? If it's outside the headquarters/booth, you have a guaranteed 7-day withdrawal right.
- Can I see the summary box? If the developer hesitates, ask why.
The difference this makes in a broker's career
No seven-figure investor signs believing "it'll work out." Knowing by heart the difference between 25% and 50%, between 180 days and 30 days post-occupancy-permit, between having or not having a right of withdrawal — that's what turns a scary uncertainty into an informed decision. And a client who decides informed is a client who closes, trusts, and refers.
Read also:
- Patrimônio de Afetação: What It Is and Why You Should Confirm It Before Buying Pre-Construction
- Selic, CDI, IPCA, IGP-M, INCC and CUB: what each index changes in your property