Legal Due Diligence Report - BFRE - Brazilian Finance e Real Estate

3. Federal Union’s domain
According to Law no. 9.760/1946, all areas that are located within 33 meters of
location where there was an influence from the tides in the year of 1831 (preamar média de
1831) are considered to be areas of the Marine (“área de Marinha”), and therefore owned by
the Federal Union.
Under such legislation, the useful domain (domínio útil) can be segregated from the
direct domain of the properties held by the Federal Union. The useful domain is comprised of
all rights related to the use of the property. In light of that, the useful domain can be
transferred to others by means of an operation named “aforamento” (or enfiteuse). When an
aforamento is made, it is said that the property is foreira to the domain of the Federal Union.
When an aforamento is made, the foreiro (person under whose name the domínio útil
is registered) has to pay an annual fee equal to 0.6% (foro) of the value of the portion of the
land that is under the aforamento. Additionally, each time a transfer of the domínio útil is
made, preemptive rights must be granted to the Federal Union (which is normally only a formal
procedure, given that it is not usually exercised). If the Federal Union chooses to not enforce
its preemptive rights, a fee equal to 5% (laudêmio) of the value 6 of the portion of the land that
is under aforamento is charged from the seller.
If the annual fee is not dully paid, a transfer cannot be authorized. Moreover, if the fee
is not paid for three consecutive years, or four non-consecutive years, the aforamento will be
deemed void.
After a transfer is made, the buyer must present to SPU the respective deed, within 60
days from the transaction, requesting that the SPU’s record be updated. If said period is not
complied with, a monthly fine equal to 0.05% will be levied.
3.1 Botafogo Praia Shopping Property aforamento
The Botafogo Praia Shopping Property is located near the shore of Botafogo, and, as
result, a part of the property is located under the Federal Union’s domain. Therefore, an
aforamento agreement (Termo de Aforamento) regarding an area of 160,25 square meters
was executed (please note that we did not receive copy of this Termo). The part of the
property that is under aforamento is registered under RIP 6001 0027390-20 (which is the
enrollment of the property with SPU).
According to the SPU’s record, the holder of the entirety of the useful domain is
Curicica Mineração Ltda., which is a company that owned 51% of the property before São
Marcos and Ancar Fund. Curicica is actually not the owner of any part of the property since
03.11.2010. Such situation must be regularized within SPU in order to indicate Brookfield as
6 In practice, the Office for the Federal Union Assets (Secretaria do Patrimônio da União – “SPU”) considers
three values to determine the amount of the laudêmio: the value of the transaction, the value of the
property under the SPU register and the value of the property under the Municipality register. The 5% fee
is levied on the highest of the three values.
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