Can a property without a deed be sold? Risks, solutions and paths to regularization

Need help with your case? See how to regularize your property in São Paulo.

"This property is mine, I bought it and I have lived here for years." For practical life, that makes perfect sense. For real estate law, it may not be enough. Millions of properties in Brazil are occupied by people who paid for them but never had ownership registered in their own name — they live in the gray zone of the unrecorded side agreement, the receipt, the "purchase and sale agreement" that never became a deed.

The problem surfaces when it comes time to sell, finance, pledge as collateral or include the property in a probate: the buyer disappears, the bank refuses, the registry demands the property record. Those who thought they were the owner discover that, on the paper that matters, it is still the former seller (or their heirs) who appear as owners.

This article answers, without circumlocution, whether a property without a deed can be sold, what the risks are and — most importantly — what paths exist to regularize it and unlock the asset. The cost of inaction is high: an irregular property is worth less, sells worse and may turn into a dispute.

Is someone who holds only an unrecorded side agreement the owner of the property?

Not in the full legal sense. Under Brazilian law, transfer of ownership through a sale between living parties requires registration of a valid title at the Real Estate Registry (arts. 1.227 and 1.245 of the Brazilian Civil Code). Someone who holds only an unrecorded side agreement, a receipt or an unrecorded purchase and sale agreement holds rights over the property (possession and contractual rights), but does not appear as owner on the property record.

The difference is more than technical. The purpose of registration is straightforward to explain: it is what tells the world who the property belongs to. Without registration, the "de facto owner" cannot, for example, pledge the property as financing collateral, and is exposed to problems of the former titleholder (debts, attachments, heirs).

Can a property without a deed be sold?

In practice, it can be negotiated — but what is transferred is not ownership, but rather the possession and the rights the seller holds over the property (through an assignment of rights, for example). This is legally more fragile and tends to drive away buyers and banks: financing, as a rule, requires a clean property record; many buyers will not pay full value for an uncertain right.

The outcome is almost always the same: loss of value. The irregular property sells more cheaply, to a smaller pool, and with greater risk for both parties. For that reason, it is almost always worth more to regularize before selling than to pass on the problem at a discount.

What are the paths to regularization?

Regularization depends on how the property came to you and on your documentary situation. The main paths are:

• a) Final deed + registration. If the seller has authority to dispose of the property and cooperates, the appropriate title can be formalized and registered. After a death, estate representation, successors and any necessary authorization must be checked. This is the most direct path when there is cooperation.
• b) Specific performance to compel transfer of title (adjudicação compulsória). When the seller received payment but refuses, has disappeared or has died, and there is a purchase and sale agreement, a registrable title may be obtained through the courts or, if the requirements are met, through the Real Estate Registry (art. 216-B of the Public Registries Law, added by Law 14.382/2022).
• c) Adverse possession (usucapião). Where there is prolonged possession meeting the legal requirements, ownership can be acquired through adverse possession — including by the out-of-court registry route, before the registry (art. 216-A of the Public Registries Law).
• d) Land regularization (REURB). In informal urban settlements, Law 13.465/2017 provides specific regularization mechanisms.

Which path serves your case depends on a review of the documents — there is no single recipe.

A hypothetical example: Mr. João's "side-agreement" townhouse

Imagine that Mr. João bought a townhouse 12 years ago under an unrecorded side agreement, paid in full, but never executed a deed. Now he wants to sell to fund his retirement. The interested buyer applies for financing — and the bank refuses, because the property record is still in the name of the former owner, who has died.

Mr. João's path is not "sell it anyway at a discount": it is to regularize first. With a purchase and sale agreement and proof of payment, specific performance to compel transfer of title against the seller's estate is assessed; if there is no adequate title, adverse possession based on the 12 years of possession is examined. Twelve years of possession alone does not satisfy every requirement of adverse possession. Regularization may broaden the options, but does not guarantee a price, sale or loan approval.

The most common (and costly) mistakes

• Believing that "living there for years" amounts to being the owner on the register.
• Selling under an unrecorded side agreement and passing the problem (and the risk) to the buyer.
• Losing contact with the former seller, making the deed harder to obtain.
• Not keeping proof of payment and documented possession — evidence essential for specific performance or adverse possession.
• Delaying review and then needing to reconstruct documents and representation after the seller's death.
• Trying to improvise a solution, without defining which route (deed, specific performance or adverse possession) fits the case.

Checklist: what to gather to regularize your property

• The up-to-date property record of the property (in whose name is it?).
• The purchase agreement or receipt and the proof of payment.
• The date and the manner in which you acquired possession.
• The seller's details (or heirs) and whether they can be located.
• Proof of possession over time (utility bills, property tax, improvements).
• Any survey plan and the property's status before the city hall.

Frequently asked questions about a property without a deed

Can I sell a property that exists only under an unrecorded side agreement?

In practice, you can assign the possession and the rights over the property, but not ownership — which, for a sale between living parties, requires a valid transfer instrument and registration (Brazilian Civil Code arts. 1,227 and 1,245). A public deed is required in the cases covered by art. 108, subject to statutory exceptions. This rules out financing and many buyers, and tends to lower the property's value. In general, it is worth more to regularize before selling than to pass on the unrecorded side agreement at a discount and with risk.

How do I regularize a property with no property record or deed?

It depends on the case. If the seller cooperates, a deed is executed and registered. If the seller has disappeared, died or refuses, and there is an enforceable transfer obligation, proof of payment and the other requirements, specific performance to compel transfer of title may be assessed, whether judicial or out-of-court (art. 216-B of the Public Registries Law). If there is prolonged possession, adverse possession is assessed (art. 216-A of the same law). For informal urban settlements, there is land regularization (Law 13.465/2017).

Can a property under an unrecorded side agreement qualify for bank financing?

As a rule, no. Banks require an up-to-date property record and ownership registered in the seller's name in order to grant financing to the buyer and take the property as collateral. As a result, irregular properties are restricted to buyers who pay in full and accept the risk — a much smaller pool. Regularization may facilitate the bank's review, but does not guarantee financing.

In São Paulo, where do I regularize a property without a deed?

Regularization runs through the Real Estate Registry of the district where the property is located and, depending on the path, also through a Notary's Office (deed, notarial deed of facts for adverse possession) and the city hall (urban-planning matters). In São Paulo, both out-of-court adverse possession and out-of-court specific performance to compel transfer of title can be processed before the registry, depending on the case. The correct path is determined after reviewing the documents.

When should I seek a lawyer to regularize my property?

Before attempting to sell, finance or include an irregular property in a probate — and urgently if the former seller is ill, elderly or has died, because regularization tends to become harder over time. A lawyer reviews the property record and the documents and points to the appropriate path (deed, specific performance to compel transfer of title or adverse possession), preventing the asset from becoming locked up or turning into a dispute.

A regular property is worth more and sells better

A property without a deed is not a lost property — it is a locked-up property. The good news is that, a route to regularization may exist, depending on documents and legal requirements; the bad news is that it tends to become harder the longer it is put off, especially when the former seller ages or dies.

At Falchet e Marques Sociedade de Advogados, a law firm in São Paulo (Av. Paulista), we review the property's documentary situation and conduct the regularization — by deed, specific performance to compel transfer of title or adverse possession — to unlock the sale and protect the asset.

Talk to our team on WhatsApp: +55 11 95901-1854 — tell us how you acquired the property and send the documents so we can point you to the best path to regularization.