Side Agreement (Contrato de Gaveta)

A side agreement (contrato de gaveta, literally “drawer contract”) is a private instrument — usually an assignment of rights or a purchase-and-sale promise — through which the buyer of a property that is still under financing takes over the debt and payments without formalizing the transfer with the lending bank. The deal happens “in the drawer,” without notice to or consent from the financial institution that holds the fiduciary lien (alienação fiduciária) or mortgage on the property.

• Legal status: the property remains formally in the name of the original seller (the loan holder), and so does the debt. The de facto buyer pays the installments but is not listed as the owner on the title record (matrícula).
• Validity between the parties: a side agreement is valid between buyer and seller. Brazil’s Superior Court of Justice (STJ), through Precedent (Súmula) 84, recognizes that possession derived from a side agreement can be defended through third-party opposition proceedings (embargos de terceiro), and that a buyer who has paid the installments may have enforceable rights. However, the lending bank is not a party to this agreement and can foreclose on the property if the financing falls into default.
• Risks for the buyer:
  • The property can be seized over the seller’s debts (unpaid property tax, tax enforcement actions, civil debts)
  • The bank can block the transfer or charge for the assignee’s default on the loan
  • If the seller dies, the property enters probate (inventário) and the buyer must prove their rights in court
  • Any future financing or regular sale of the property is blocked as long as the title record does not reflect the real owner
• Law 8,004/90 (SFH): for loans under Brazil’s Housing Finance System (SFH), assigning a borrower’s rights requires the lender’s consent (art. 1 of Law 8,004/1990). An assignment made without consent does not relieve the assignee of the obligation, but the bank can deny later regularization.
• Regularization: a side agreement can be regularized by formalizing the assignment with the bank, paying off or refinancing the loan, and transferring the financing into the real buyer’s name.

In Florianópolis, the side agreement was more common in past decades, when bank bureaucracy and notary costs discouraged formal regularization. Today, with a more agile credit market and digitized notary offices, the practice has lost ground, but it still shows up in deals involving older financing or properties with a small residual loan balance.