Brazil's Superior Court of Justice has held that a bank acting only as a financial agent or fiduciary creditor is not jointly liable for delays in delivering a property.
According to Portas (Notícias), the Second Section of Brazil's Superior Court of Justice (STJ) has ruled that banks cannot be held legally responsible for construction delays merely because they act as fiduciary creditors or financial agents. The court said that a lender monitoring the progress of the works in order to release funds does not become jointly liable for problems in carrying out the project. The decision is not binding, but it is described as a weighty precedent that other courts are expected to use as a reference in similar cases of late delivery. The ruling concerned a project in Salvador that was due to be delivered in July 2014. In July 2015 the buyers of one apartment sued the builder, the developer and the bank that financed the project, seeking to cancel the contract and recover the amounts paid, as well as compensation. The bank was included because it had lent to the developer against a mortgage on the land and a fiduciary assignment of receivables, and buyers were told to pay instalments directly to the bank. The Bahia state court held the bank liable, treating it as an 'executing agent' of the project, and the STJ's Third Panel left that decision in place. The bank then appealed on the grounds that the Fourth Panel took a different view, and the Second Section, which resolves such splits, accepted the appeal and found the bank had no standing to answer the claim. The rapporteur, Justice Maria Isabel Gallotti, said a bank can play two roles. As a pure financial agent, it is responsible only for obligations under the loan contract, such as releasing funds on the agreed dates and collecting the agreed charges. If it acts as a co-executor, for example by taking part in choosing materials or defining the construction plan, liability may arise depending on its actual involvement. In her view, checking the work schedule only verifies that the money is used for the financed purpose and protects the bank's collateral. The source also notes that extending joint liability to banks could raise the cost of real estate credit in the country.