Real estate consumer rights and title insurance gaps in Brazil

In Brazil, consumer rights during real estate transactions are governed by the Federal Constitution and the Consumer Defense Code (CDC). These laws ensure transparency, the right to information regarding property characteristics, and protection against abusive contract clauses. The Civil Code and the Public Records Law further regulate the formalization of sales to ensure legal ownership.

Despite these protections, a comparison with the United States highlights a significant gap in the Brazilian market: the absence of title insurance. In the US, title insurance protects buyers and lenders against past issues in a property's deed, such as undisclosed debts, omitted liens, or fraudulent signatures. While the US system utilizes private title companies to centralize searches and escrow services, the Brazilian system distributes these functions among lawyers, notaries, and public registries, leaving buyers without a specific mechanism to cover legal costs or financial losses arising from property title disputes.