The Second Panel of STJ, in repetitive appeal Theme 1,288, has defined how late payment affects real estate finance contracts secured by fiduciary sale once title has already been consolidated in the creditor’s name.
The court drew a clear line between situations before and after Law 13,465/2017, spelling out when the borrower can still “save” the contract and when they are left with only a right of first refusal to buy the property back. Below are three key points to understand what effectively changes for the market.
1. Before Law 13,465/2017: If the default was cured, title consolidation is undone and the contract is reinstated. For situations governed by the pre‑2017 regime, the STJ reaffirmed the logic based on Article 34 of Decree‑Law 70/1966. If, after title was consolidated in the creditor’s name, the borrower cured the default under that provision (i.e., paid the arrears and applicable charges under the then‑current rules), that act is treated as a vested right. In this scenario, the court held that the consolidation must be unwound and the mortgage finance contract reinstated, as if the out‑of‑court foreclosure procedure had not progressed to a definitive loss of the asset.
2. After Law 13,465/2017: Once title is consolidated, curing default is no longer allowed, only a right of first refusal remains. The turning point is the change introduced by Law 13,465/2017, which added paragraph 2‑B to Article 27 of Law 9,514/1997. From that moment on, the regime changes: once title has been consolidated in the creditor’s name, the fiduciante (borrower) can no longer cure the default. What the law preserves in these cases is only a right of first refusal to purchase the property under the conditions set out in Article 27. The Second Panel stressed that this understanding also applies to contracts signed before 2017, provided that consolidation of title and the failure to cure default occur under the new law. In other words, the relevant date is not just when the contract was signed, but also when title is consolidated and when the cure (or lack of cure) occurs. If title was consolidated and the default was not cured after Law 13,465/2017, the borrower loses the ability to “save” the contract by late payment and is left, at most, with priority to repurchase the property.
3. The STJ rejects the theory of curing default up to the auction and overrides the TJSP’s approach: In the underlying case for the repetitive appeal (REsp 2,126,726), the São Paulo State Court (TJSP) had allowed the borrower to cure default up to the signing of the auction deed, even though title consolidation had occurred after Law 13,465/2017 came into force. The Second Panel held that this position conflicted with settled STJ case law and reversed the judgment, dismissing the action and granting the borrower only the right of first refusal under Article 27, paragraph 2‑B, of Law 9,514/1997.
With this, the court closes the door on an extended “cure window” under the new regime and strengthens the legal certainty of consolidation and subsequent sale of the property. For the credit market, the repetitive ruling provides an objective marker for the “point of no return” in out‑of‑court foreclosure: before that point, there is still room to reinstate the contract; after it, the discussion shifts essentially to the terms under which the borrower may, or may not, exercise their right of first refusal.
