BRAZIL Law and Practice Contributed by: Alberto Malta, Davi Ory, Ana Vogado and Maria Eduarda Amaral, Malta Advogados
6.9 Payment of Maintenance and Repair Common areas in Brazilian buildings are main - tained through condominium fees paid by own - ers proportionally to their ideal fractions. Under the Tenancy Act, ordinary expenses are assigned to tenants while extraordinary expenses remain the landlord’s responsibility. Condominium fees are propter rem obligations tied to the property regardless of occupancy. Since the condominium has no direct legal relationship with tenants, even when lease con - tracts transfer payment responsibility to ten - ants (standard practice), the condominium can demand payment directly from the owner in case of default. The landlord maintains passive soli - darity and may subsequently seek reimburse - ment from the tenant. 6.10 Payment of Utilities and Telecommunications Utilities and telecommunications expenses are the tenant’s responsibility. These obliga - tions are personal, not propter rem and so fall directly on service users. Properties with multi - ple occupants typically have individual metering with consumption billed directly to user unity. In older buildings, water and gas charges are often included in condominium fees and distributed based on each unit’s ideal fraction rather than actual consumption. 6.11 Payment of Property Taxes Urban property tax (IPTU) and rural property tax (ITR) are propter rem obligations owed by the property owner or possessor according to the National Tax Code. Standard practice allows the contractual transfer of payment responsibilities to tenants. While this transfer is valid between parties, it doesn’t eliminate the landlord’s tax lia - bility. Tax authorities may demand payment from
Under the Civil Code, unforeseen events causing excessive burden may justify revision. 6.6 Determination of New Rent See 6.5 Rent Variation and 6.7 Payment of VAT . 6.7 Payment of VAT Real estate rentals in Brazil are not currently sub - ject to municipal service tax (ISS) or state VAT equivalent (ICMS) as they don’t constitute the provision of services or the circulation of goods. However, rental income is subject to PIS and COFINS following the STF’s 2024 Decision on Issues 630 and 684. With Constitutional Amend - ment No 132/2023 and Complementary Statute No 214/2025, real estate leasing will be taxed under the new IBS and CBS system. To minimise the impact on the sector, a 70% reduction in rates will apply to real estate rental, cost assignment and leasing operations. The legislation also establishes that individuals earn - ing over BRL240,000 annually from renting more than three properties will be classified as taxpay - ers under this new tax regime. 6.8 Costs Payable by a Tenant at the Start of a Lease At the beginning of the lease, the tenant may have to pay costs in addition to the rent, such as a rental guarantee, which is limited to one type. Fire insurance and the cost of reconnecting essential services are also common. As a rule, down payments are forbidden. How - ever, in specific commercial leases, such as those in shopping centres, case law admits the contractual provision for charging amounts such as a promotion fund, if they do not counteract rules of public policy.
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