Since 2015, with the publication of Law No. 13,240/15 and later, Law No. 13,465/17, the federal government has been indicating a clear interest in improving the process of "destabilization" of public real estate that, for some reason, is of no use or does not serve any public interest in the assets of the Federal Government. This is beneficial not only from the point of view of greater efficiency in the management of the other buildings that are actually relevant to the Federal Government, but also for the composition of the State’s revenue.

In general terms, this process was already better structured for properties that were leased to or occupied by private parties registered with the Bureau of Federal Assets (SPU). This was done by means of a simplified procedure for direct purchase, by public notice or by private initiative, with the possibility of waiving public bidding (topic already addressed by us in this article).

Recently, as a complement to existing legislation, the federal government published Law No. 14,011/20 with the purpose of specifically facilitating the process of selling the Federal Government’s real estate not directly linked to any private individual by means of a prior right and which, therefore, requires a competitive process for sale.

In this regard, we highlight the following main points of innovation in the legislation passed:

• Acquisition of non-reserved/occupied property at the initiative of the private party. Any interested party may submit an offer for the acquisition of Federal Government property that is not recorded in the system for leasing or occupation. Orders can be made on the federal government’s website, in which the interested party must record its data and that of the property. In the order, documents related to the property that facilitate the evaluation of the property, such as photos and reports, may be attached.

If the property does not have a valuation report prepared or valid, it is up to the interested party to do so and submit it for the Federal Government's validation. The reports may be prepared by a qualified valuation expert or private firm.

• Sale at the Federal Government's own initiative. The Federal Government itself may prepare proposals for the sale of its properties, contracting BNDES to carry out studies and execute a privatization plan. The privatization may be done, among other ways, through the issuance of a lease, sale, or exchange; or by the creation of real estate investment funds and the hiring of their managers and administrators.

If it is advisable, considering the valuation and liquidity of the properties, the law provides that the sale may be done in lots, encompassing more than one property. This possibility, however, is expressly suspended by the legislation while the state of public health emergency arising from covid-19 is in force.

• Specific rules for public auction. The sale of Federal Government property requires an auction, which can be done online. In the event that the first auction is deserted or unsuccessful, the Bureau for Coordination and Governance of the Federal Government's Assets may hold a second auction, applying a 25% discount to the sale. If the second auction is also deserted or unsuccessful, the properties will automatically be put up for direct sale, with the application of 25% discount over the amount of the valuation. The acquisition also subjects the bidder to the right of preference of the assignee of a real or personal right, the lessee, or the tenant who is up to date with its obligations with the SPU, as well as expropriated parties.

The interested party who has financed the valuation of the property may acquire it on equal terms with the winner of the successful auction (that is, the party incurring the initial costs is entitled to preference for acquisition, on equal terms with the best bidder). If not, the winner will have to reimburse it for the costs of appraising the property.

• Consideration for the assignment of public assets. In addition to the sale of property, the paid assignment of Federal Government assets remains a possibility, and there is also provision for payment of the price of the assignment as consideration, which may be done through the obligation to build, remodel, or provide engineering services on real or personal property in the Federal Government’s interest. This can be especially interesting for the installation of infrastructure projects in reputable locations such as marine land, which usually include port and multimodal logistics enterprises.

In this case, the assignment will be done under a condition subsequent, conditional on the completion of construction, remodeling, or provision of engineering services.

The expectation is that the sale of Federal Government real estate, mainly from areas that are no longer useful to the Public Administration or that are the product of criminal seizures (including productive farms and commercial real estate), will represent a reduction in maintenance costs and an important source of revenue for the public power, considering not only the price of sales, but also the collection of the territorial or urban property tax (ITR/IPTU) by the new purchaser and the Service Tax (ISS) due for constructions and remodeling that will be carried out on these properties.