Brazil already has rules to regulate the legal regime of multi-ownership and registration of real properties. It is Law No. 13,777/2018, which amended and introduced new provisions in the Civil Code and in the Public Registers Law. Published in the Official Gazette on Friday, the 21st, it originated in Bill No. 10.287/2018, passed the previous day, and enters into force on February 4, 2019 (45 days after its publication).
Multi-ownership is a kind of time-sharing, and although it does not constitute a new doctrine in Brazil, the market expectation is that, with the respective regulations, investors and consumers will have more legal certainty and interest in conducting this type of business. It represents a modern way of sharing real estate, optimizing resources and making the dream of a second home for moments of rest and leisure more feasible for the general population. The trend is increasingly evident in an era marked by the use of technology to share services and spaces, such as Airbnb, WeWork, and Uber, and the increasing concern with the best use of the resources available.
The system of timeshares allows the same property, a beach or country house, flat, village or hotel room, among others, to be held in a shared manner by several multi-owners, with a fractional division of time for use and enjoyment of the property between them. Each multi-owner uses his quota of time to enjoy the property in a certain period (for example, a week), which can be fixed, floating, or a mix of the two each year. The existence of the so-called "three-dimensional property" (a thing in time and space) has been recognized, in which each multi-owner has the exclusive right to fully enjoy a particular property during a fixed period, during which time he may use the asset, lease it, give it via a free lease, or simply not occupy it. All expenses with the asset (IPTU, condominium fees, etc.) are apportioned among the multi-owners based on their respective co-participation.
With the promulgation of the new law and the recognition of multi-ownership as a real right, which provides for the individualization of time units of each multi-owner in the Real Estate Registry, part of the debates on the subject will be resolved. However, some controversial issues still need to be regulated and clarified by the market and by the judiciary. The question of foreclosure against the multi-owner's share of debts (for example, condominium fees and IPTU taxes), the regulation of what happens in the case of a waiver of ownership by one of the multi-owners and other sensitive issues will depend on specific rules to be established in the bylaws of each condominium.
The success of this type of venture and the good coexistence between the multi-owners is directly associated with a good legal structure for the contracts that will govern this relationship, especially the condominium by-laws. The law itself required that ventures in which the time-share regime has been instituted, in whole or in part, be managed necessarily by a professional manager.