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Real Estate Privatization - Regulations by The Secretariat for the Coordination and Governance of the Federal Government's Assets 

by Raphael Santo, Andreia Maria de Oliveira, Stefanie Rodrigues Grinszpan

Published: September, 2020

Submission: September, 2020

 



 

In order to follow its task of reducing bureaucratization of the sale process of federal real estate properties, the Secretariat for the Coordination and Governance of the Federal Government’s Assets (SCGPU) edited three ordinances intended to regulate instruments brought by Law no. 14.011/2020 (result of the conversion of MP 915/2019), especially the bid reception for federal real estate properties and the preparation of appraisal reports of these real estate properties by third parties.


The main provisions of SCGPU Ordinances Nos. 19,832, 19,837 and 19,835, all from August 25, 2020 and published in the Official Gazette of September 21, 2020 are shown as it follows: 


1) SCGPU ORDINANCE NO. 19,832, FROM 08.25.2020 -BID RECEPTION 


Ordinance no. 19,832 from 08.25.2020 (the "Ordinance") was published in the Official Gazette of the Federal Government of 09.21.2020, issued by the SCGPU - Secretariat for the Coordination and Governance of the Federal Government's Assets - with the objective of regulating the reception of bids for the purchase of real estate belonging to the federal government that are not enrolled in the emphyteusis regimen or currently occupied, as provided for in Article 23-A §4 of Law no. 9,636/98 (as amended by Law no. 14,011/2020). 


The submission of a purchase bid, by any natural person or legal entity, shall follow the following procedures: 


Bid's submission format: Bids must be submitted exclusively by means of an application identified as "Proposta de Aquisição de Imóvel da União" (Bid for the Purchase of Federal Government's Real Estate Assets),which is available for completion at the website www.imoveis.economia.gov.br or at the Federal Government internet portal, www.gov.br. The application must contain: (i) name of the interested party, their respective taxpayer number (CPF or CNPJ), as well as address, e-mail and telephone number (if the interested person is a legal entity, the e-mail and telephone number must be those of its legal representative); (ii) name and identification of the legal representative(s), if the interested party is a legal entity; (iii) information on the property of interest (address/location of the property and enrolment number); and (iv) the property's RIP - Registro Imobiliário Patrimonial (Real Estate Property Registry) within SCGPU. The application may also be accompanied by additional documents at the convenience of the interested party (e.g. photos, topographical survey, georeferencing plans, blueprints, pictures or files that may facilitate the identification of the property). 


Reception of bids: The SCGPU will only receive bids as of the date the Ordinance comes into effect, which is to take place on October 1st, 2020. Real estate that receive a valid purchase bid will be available at website www.imoveis.economia.gov.br, as well as the number of bids received for each property. 


SCGPU's manifestation: The SCGPU will revert to the interested party regarding the possibility of selling the property within 60 calendar days counted from the receipt of the application, via the e-mail address provided by the interested party, thereby also informing whether the property has a valid appraisal. If the property does not have a valid appraisal, the SCGPU will mention to the interested party that an appraisal report needs to be provided. 


Properties without valid appraisal: The interested party may arrange for the property to be appraised, and the appraisal report shall be drawn up by a professional appraiser hired by the interested party who has been previously licensed by the SCGPU, in accordance with Ordinance no. 19,835/2020. The report must comply with the criteria set out in SCGPU Ordinance no. 19,837/2020 and be submitted within 30 days of the SCGPU's manifestation as mentioned above, this term may be extended for the same period upon SCGPU's grounds and informed to the interested party. 


No tacit approval: If the SCGPU does not answer the bid or does so after 60 days, that will not mean the tacit approval of the bid. 


Right of first refusal: The interested party who submits the bid for the purchase of the property and sees to its appraisal shall have the right of first refusal of the appraised property if no valid appraisal is in place, on the same terms as the winner of the public tender, in the event that the right of first refusal granted by law to the assignee of the real or personal right, lessee or regular occupant of the federal government's assets is not exercised. 


Requirements to exercise right of first refusal: The interested party must meet the following requirements: (i) that the bid submitted is valid; (ii) that the property does not have a valid appraisal until the SCGPU's manifestation; (iii) that the appraisal report is fashioned in accordance with the criteria of SCGPU Ordinance no. 19,837/2020 and officially approved by SCGPU; and (iv) participation in the public tender session and, in cases of public competition, that it has made a down payment of a sum equivalent to the deposits made by the other participants of the tender, as per the regulation of the respective invitation to bid. The right of first refusal shall be limited to the tender for the alienation of property to be carried out using the appraisal report paid for by the interested party, the period of validity of which shall be of twelve months after its approval.


Time for the exercise of the right of first refusal: The right of first refusal shall be exercised within 30 minutes of the announcement of the winner by the Permanent Commission of Bidding, on equal terms with the winning bid or proposal. In the event that the interested party desists from the purchase after exercising its right of first refusal, such party shall suffer the penalties set forth in the invitation to bid, and, in this scenario, the bidder who submitted the highest bid or proposal shall be declared the winner. If the interested party does not exercise the right of first refusal, a refund shall be made directly by the winner of the tender and the production of proof of such refund is a condition for the transfer of ownership to the winner 


Several bids on the same property: If there is more than one bid for any one single property, the first bid regularly submitted shall prevail and the remaining bids shall be suspended. In the event that the first bid is disqualified or the interested party withdraws the bid, the procedures shall then be resumed with the second bid and so on. The suspended bids will automatically be discarded when the SCGPU approves the appraisal report submitted by the interested party whose bid is under analysis. 


Finally, it should be noted that the reception of bids by the SCGPU does not create an obligation for the federal government administration to dispose of the property or any subjective right to purchase. Furthermore, the properties that received bids that have been denied by the SCGPU cannot be the subject of a new bid, but may be disposed of in accordance with the other procedures laid down in Law no. 9,636/98. 


2) SCGPU ORDINANCE NO. 19,837, FROM 08.25.2020 - APPROVAL OF APPRAISAL REPORTS 


Ordinance no. 19,837 from 08.25.2020 (the "Ordinance") was published in the Official Gazette of the Federal Government of 09.21.2020, issued by the SCGPU - Secretariat for the Coordination and Governance of the Federal Government's Assets - with the objective of regulating the criteria and the procedures for the approval of the appraisal reports on real estate owned by the Federal Government or in which the Federal Government holds interest, as provided for in §§ 7, 8 and 12 of art. 11-C, in §2 of art. 11-D, in § 5 of art. 23-A and in § 1 of art. 24-C of Law no. 9,636/98 (as amended by Law no. 14,011/2020). 


Out of the major provisions of said Ordinance, the following are to be highlighted: 


Competence: The reports must be approved by the Superintendent of the Federal Government's Assets of the State where the property is located or by the responsible authority of the Managing Unit to which the property is bound. The answer regarding an approval of the report must be given within 60 days of its receipt. 


Report requirements: The reports are to be submitted in complete fashion, with the respective Technical Responsibility Note (ART - Anotação de Responsabilidade Técnica) or Technical Responsibility Record (RRT - Registro de Responsabilidade Técnica) containing all the necessary and sufficient information so as to make it self-explanatory, as provided for in the Brazilian Standard for the Evaluation of Assets of ABNT-NBR 14,653. Additionally, the reports must: (i) contain the minimum required information according to item 10.1 of NBR 14653-2; (ii) meet the requirements of paragraphs 1 to 3 of article 5 of the Ordinance, among which the presentation of the observed prices versus estimated values by the model graph, according to item 8.2.1.4.1 of NBR 14.653-2, market data (with information source, location, type of negotiation, reference date, main physical, economic and location characteristics) and at least one photograph of each market data; (iii) contain, whenever possible, the information set forth in the appraisal report template that makes up Annex I of the Ordinance; and (iv) be presented in PDF format for the body of the report and in .XLS format for sample elements with the identification of the market data actually used in the final template. 


Analysis of the reports: Before the decision to be issued by the competent Superintendent of the Federal Government's Assets or by the person in charge of the managing unit, the reports are to be analyzed by a qualified professional, educated in engineering or architecture, who may request additional clarifications and who will be responsible for the drafting of a technical note recommending or not the approval of the report. 


Prohibitions: Specialized companies whose shareholders are employed by the SCGPU or by the Special Secretariat for Privatization, Investment and Markets of the Finance Ministry are prohibited, the same going for their relatives, by blood or marriage, up until the third degree. 


Waiver of approval: Appraisals that are carried out by a federal public bank or state-owned companies, pursuant to art. 11c, § 8 of Law No 9,636/98, are not submitted to homologation. 


Finally, it should be noted that, in the appraisal reports submitted, as a prerequisite for the exemption necessary for its production, the appraiser must represent, under the penalties of the law, in particular art. 299 of the Brazilian Penal Code, that there is no conflict of interest in drafting the appraisal report. 


3) SCGPU ORDINANCE NO. 19,835, FROM 08.25.2020 - LICENSING OF APPRAISERS 


Ordinance no. 19,835 from 08.25.2020 (the "Ordinance") was published in the Official Gazette of the Federal Government of 09.21.2020, issued by the SCGPU - Secretariat for the Coordination and Governance of the Federal Government's Assets - with the objective of regulating the criteria for the licensing of appraisers for the preparation of the appraisal reports of real estate belonging to the Federal Government, considering the provisions of art. 11-D, of § 3 of art. 23-A and in §7 of art. 24 of Law no. 9,636/98 (as amended by Law no. 14,011/2020). The Ordinance also regulates the limits for the refund of the costs incurred by the interested parties who have submitted a bid and were not the actual purchaser of the property appraised. 


Out of the major provisions of said Ordinance, the following are to be highlighted: 


Professionals who may be licensed by the SCGPU: Professionals enrolled in the Federal Council of Engineering and Agronomy (CREA - Conselho Regional de Engenharia e Agronomia) or in the Architecture and Urbanism Council (CAU - Conselho de Arquitetura e Urbanismo) are entitled to be licensed to perform the appraisal of real estate owned by the Federal Government for alienation purposes.


Separate licenses for rural and urban buildings: The license of the professional is to be related to the professional's education and qualification, which means that the appraisal of properties located in urban areas is to be carried out by a civil engineer or architect, whereas the appraisal of rural properties is to be conducted by an agronomist or forest engineer. 


Licensing requirements: Licenses shall be granted to professionals who prove the qualifications and technical capacity required by art. 3 of the Ordinance, which include, for urban buildings, for example, proof of having a degree in Civil Engineering or Architecture with a minimum course load of 20 hours, or having taken classes in a subject whose syllabus contain statistical inference applied to appraisals. In addition to education, proof of experience must be submitted by means of the submittal of other reports prepared in other situations that follow the requirements of the Ordinance (the use of an involution method, according to NBR 14653-2, among others). 


Submission of certifications: The appraisal reports required for experience may be replaced by certifications issued by a federal entity represented in more than one State, provided that it is a no profit entity, was established at least 10 years before and gathers professionals and/or legal entities dedicated to the appraisal of real estate, with a mandatory application of a test so as to evaluate the professional's experience. 


Licensing requirements: Interested professionals must submit their application using a specific form, available on the Federal Government's Assets Portal, at www.imoveis.economia.gov.br, when summoned by the Secretariat for the Coordination and Governance of the Federal Government's Assets. 


Remuneration and refund values: The remuneration of the licensed professionals will be made directly by the interested party who hired said professional and there will not be any interventions from the SCGPU in the relationship between them. The refund values of the costs effectively incurred by the interested party for the appraisal of the property bid on shall comply with the limits in the table of art. 8 of the Ordinance. The table in question may be updated annually by the SCGPU as of the date of the publication of the Ordinance.


We remain at your disposal if any questions whatsoever arise or if you require additional information.


 



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