The First Section of the Superior Court of Justice (STJ, Brazil’s highest appellate court for federal non-constitutional matters) established new criteria to determine the baseline reference date for compensation values in property expropriation proceedings. Decided under the constitutional relevance filter for federal questions, the ruling seeks to balance fair compensation to the owner and protection of the public treasury, preventing unjust enrichment for either party.
The matter has a substantial impact on the country’s legal and economic environment. According to National Council of Justice (CNJ) data cited by the reporting Justice Afrânio Vilela, there are over 90,000 ongoing expropriation lawsuits in Brazil. Of this total, approximately 75,000 are pending before state courts. The average duration of these proceedings is roughly six years, with land reform cases typically taking somewhat longer and being concentrated in the Federal Courts. In 2025 alone, the volume of judgments rendered in these actions reached the 25,000 mark.
Time Limits for Court Appraisals
The central point of the STJ decision is defining the baseline moment for technical property valuation, seeking to reconcile litigation duration with fair compensation. The general rule establishes that contemporaneous valuation corresponds to the asset’s market price at the time the court-ordered appraisal is conducted. However, the court established specific time limits based on the type of expropriation:
- Public utility or social interest: The baseline appraisal date cannot exceed a time limit of one year from the filing of the lawsuit.
- Agrarian reform: The deadline for determining the value cannot exceed 90 days following the filing of the lawsuit.
- Indirect expropriation (de facto taking): The reference moment corresponds to the date of administrative possession. The expert appraisal must reconstruct the exact market price as of that date, without prejudice to statutory inflation adjustments and compensatory interest.
Handling of Delays and Property Appreciation
The STJ also defined clear rules for situations where the court appraisal exceeds the established deadlines. In these instances, the valuation must retroactively determine the market price as of the cut-off baseline date, utilizing scientifically accepted appraisal methodologies for this reconstruction.
When the expropriating authority is responsible for the delay in conducting the initial appraisal—due to an act attributable to it and formally recognized in a reasoned court decision—the time limit is extended only by the exact period of delay attributable to it. Conversely, delays attributable to the property owner, the court administration, or third parties do not suspend or extend the established limits.
Another key aspect addressed by the First Section concerns property appreciation resulting directly from State intervention, such as the construction of public works or regional infrastructure improvements. Justice Afrânio Vilela underscored that private parties cannot exploit procedural delays or engage in land speculation to obtain windfalls they would not have achieved through a standard market sale. Consequently, any price fluctuations generated by public intervention must be identified separately by the court expert and deducted from the final compensation awarded by the court.
Modulation of Effects and Legal Framework
To ensure legal certainty in the application of the new precedents, the STJ panel modulated the temporal effects of the ruling. The rules will apply exclusively to cases in which the court appraisal is ordered after the publication of the appellate decision. This means that the new criteria apply to experts appointed from that point forward, regardless of the appeal stage or whether a final, unappealable judgment (res judicata) has already been reached in the case.
The dispute was initially submitted under the repetitive appeals procedure (Topic 1,432), but the panel opted to establish binding precedents under the constitutional relevance regime for federal questions, grounded in Article 9, sole paragraph, of Internal Regimental Amendment 55/2026. The legal foundation was also based on Articles 26 of Decree-Law 3,365/1941 and 12, paragraph 2, of Supplementary Law 76/1993, which establish appraisal as the benchmark for determining compensation amounts.
Practical Considerations
The establishment of these criteria by the Superior Court of Justice brings greater predictability to investors, companies, and property owners managing real estate assets exposed to expropriation proceedings. The strict time boundaries for judicial appraisals mitigate risks associated with prolonged litigation, preventing real estate inflation or appreciation resulting from public works from distorting the value of fair compensation, thereby safeguarding both private property and public funds.
This content is for informational purposes only and does not constitute legal advice. For guidance on specific matters, consult a qualified lawyer.
