Signed on March 23, 2016, Law No. 16,402/16 governs the subdivision, use, and occupation of land in the municipality of São Paulo (Zoning Law). In relation to the previous law, it has brought in a series of changes, such as the establishment of maximum size limits for lots, reduction in the requirement of car parking spaces, minimum number of bicycle parking spaces, widening of sidewalks, and expansion of special environmental protection areas.

But with no doubts one of the most debated points of the Zoning Law during the last few months was article 162, which stipulates, as a rule of transition for the law, that the processes for licensing construction, building, and activities and projects for subdividing lots, filed until March 22, 2016 (date of publication of the law) will be reviewed under the aegis of the previous urban planning law, in force at the time of the filing of the administrative application, and not the legislation in force at the time of its review, thus respecting the called "right of filing".

The matter is definitively not settled and was legally challenged by the Attorney-General's Office of the State of São Paulo, which filed on February 21, 2018, a direct action of unconstitutionality (ADIN) questioning the application of the right of filing (also provided in the Strategic Master Plan of the City of São Paulo), arguing that it violates relevant environmental issues and authorizes the execution of real estate projects that do not meet the urban planning requirements of the current legislation.

Initially, on February 26, 2018, the suspension of article 162 was granted in an injunction, which paralyzed a large number of administrative proceedings filed in the City of São Paulo. However, on May 16, 2018, the injunction was overturned by the Special Entity of the Court of Appeals of the State of São Paulo with 16 votes against 7.

The session of judgment of the ADIn, originally scheduled for March 20, 2019, was suspended after a decision was handed down by appellate judges Getúlio Evaristo dos Santos Neto, Pereira Calças and Xavier de Aquino of the Court of Appeals of the State of São Paulo (TJ-SP), to be resumed on March 27 of this year.

With 17 in favor and 8 against, the right of filing provided in the Zoning Law and in the Strategic Master Plan of the City of São Paulo was ruled constitutional. The decision of TJ-SP, which is not definitive, ensures, for the moment, that the projects will continue to be evaluated and approved in accordance with the legislation in force at the time of their filing.

The judgment guaranteed more certainty for real estate developers, whose projects were drafted and filed under the aegis of the previous law, but will actually be brought to an end while the Zoning Law is in force, a situation that, however, will continue to suffer strong opposition from the urban planning sector.

The discussion is not exhausted, however, with the decision on the ADIn and, certainly, the Attorney-General’s Office will appeal to the higher court in order to safeguard its rights and reverse the current understanding on the matter. Meanwhile, the Municipality of São Paulo will maintain the analysis and approval of real estate licensing, respecting the provisions of the Zoning Law on the right of filing and thus giving more predictability and certainty to the sector.