When requesting a loan, the documentation must be quite complete so that everyone involved wins in this process. Among the documents required, are the negative certificates for financing, which are obtained from different agencies of the municipal, state, and/or federal government.
But, after all, do you know what certificates are required and why they are important? Next, check out what they are and the importance of certificates for real estate financing.
What are the necessary certificates for those who buy?
When applying for credit to obtain real estate financing, in addition to documents such as identification and income, it is necessary to present negative certificates of:
- Actions at the Municipal and State Farms, obtained at the Municipal and State Finance Departments;
- Civil actions and actions in the Federal Court, obtained in the Electoral Justice Forum;
- Guardianship, interdiction or trustee, obtained from the Civil Registry Office;
- Property ownership, required in the case of specific programs or use of FGTS. It is obtained from the Registry of Real Estate, Titles and Documents;
- Federal debts and contributions, obtained from the Federal Revenue Service.
What are the necessary certificates for those who sell?
Those who sell need to present, in addition to previous certificates, others related to the property and the sale process. Among the required, are the negative certificates of:
- Labor claims, obtained from the Superior Labor Court;
- Family actions, obtained at the Municipal Civil Forum;
- Protest Office, obtained from the specific office of the city;
- IPTU debts, obtained from the City Hall;
- Condominium charges, required in the case of buildings and obtained from the administration.
In addition, there are two other important documents that must be submitted:
- Completion Certificate, known as Habite-se, obtained from the Real Estate Registry Office;
- Property registration, also obtained at the Real Estate Registry Office.
Why are these documents important?
The use of certificates for real estate financing is important for those who buy and for those who sell, in addition to protecting the interests of the financial institution that will be lending the necessary capital for the deal to be done.
With the buyer’s negative certificates, both the seller and the institution will have guarantees that the interested party has the legal capacity and conditions to make the acquisition as required by law.
Realize that the bank will be offering credit for the purchase. When lending this money, the institution calculates the risk of default. For this reason, she makes a detailed analysis of the customer, consulting, for example, her credit score.
If that client is responding to a lawsuit, depending on the case, there is a risk that he will have to pay an indemnity or a fine, for example. This may indicate to the bank that there is a possibility that that person will default. The higher the risk of default, the higher the interest rate charged on real estate financing.
This is one of the reasons why certificates for real estate financing are required from people who wish to have access to credit. In a way, this requirement also protects the buyer’s interests.
Imagine that this person loses this legal dispute, having to bear the costs of a lawsuit and an indemnity. This new debt may mean that she is unable to honor the financing installments, losing the property.
Why does the seller also need to present certificates for real estate financing?
From the seller’s point of view, this brings security in two ways: it guarantees both that the property can be sold – and is not alienated, for example – and that the seller is responsible for the sale.
Brazilians usually believe that the purchase and sale contract is a definitive document for the real estate business. This is not true, since the contract transfers ownership of the acquired asset, but not ownership.
This means that the buyer will be able to use the property, but will not be able to sell or rent it. As we know, it is common for legal issues to take a long time to resolve.
Let’s take an example: two brothers inherited a house. As their father had not left a will, this property was incorporated into an inventory. While waiting for the resolution of this process, the heirs realized that the cost of the stopped property would cause losses.
Therefore, they decided to sell the property, writing a simple purchase and sale contract. It turns out that the future buyer was unable to approve the financing to buy the house, as the property had been given as collateral for a bank loan.
Although fictitious, our example is not as far from reality as you can imagine. Therefore, require the seller to present all certificates for real estate financing.
Why are property documents important?
Regarding the property, the certificates are important to ensure that it is legal and meets the requirements of some lines of financing. In addition, it helps to prevent the buyer from buying a property full of debts, which is much more expensive than expected.
Earlier this year, a tragedy killed five people in the city of Rio de Janeiro. Despite being beautiful apartments, built in a good location in one of the most famous cities in the country, this building was irregular.
The City of Rio said it had not authorized the construction. Unfortunately, this is common in many cities. Buying property without documentation can put the lives of residents at risk, as no engineer will guarantee the security of the structure.
The required negative certificates are diverse and serve mainly to provide a legal basis for the transaction and ensure the safety of those involved. Thanks to them, it is possible to be sure that both the buyer and the seller can carry out the property transfer process without any major problems.
Usually, buyers are often irritated by the need to provide certificates for real estate financing. This is a very negative way of looking at things, as these documents will protect everyone involved in the business. Therefore, if the seller refuses to present the certificates for real estate financing, rethink the purchase.
Certificates must be provided to the bank at the time the institution approves the credit. This will occur after the simulation and the financing completion.
A tip: Before you worry about these certificates, check if the financing installments fit your budget. We have published a complete article on the calculation of these monthly fees. Read it right now and stay on top of the subject.