Contract Rescission (Distrato)

Before Law 13,786/2018, retention percentages in a distrato (contract rescission) were set by case law, which created legal uncertainty. The law established clear rules: in developments without a segregated asset structure (patrimônio de afetação), the developer may retain up to 25% of amounts paid; with that structure in place, up to 50%. The remainder must be refunded within 30 days of the developer reselling the unit.

A distrato can be initiated by the buyer (due to default or voluntary withdrawal) or by the developer (due to a delivery delay exceeding 180 days). In the latter case, the buyer is entitled to a full refund plus interest and a penalty.