Foreclosure Substitution with Surety Bond in Tax Enforcement


The 2nd Chamber of the Superior Court of Justice (STJ) in Brazil unanimously decided, in RESP no. 2.058.838, that a taxpayer can replace the foreclosure of real estate with a surety bond in the context of tax enforcement, overturning the contrary claim of the São Paulo State Treasury.
The panel understood that the surety bond presents a higher feasibility of conversion into cash compared to real estate properties. Thus, Article 15, Paragraph I, of Law 6.830/1980 (Tax Enforcement Law) was applied. According to this legal provision, the debtor may opt, at any stage of the process, to replace the foreclosure with a cash deposit or a bank guarantee.

In examining the issue, the reporting judge, Minister Francisco Falcão, acknowledged the superior efficacy of the bank guarantee and the surety bond in their conversion to cash at the end of the executive process. According to him, these means prove to be more effective as a guarantee of execution when compared with real estate properties. With this argument, the minister dismissed the need to appeal to the principle of least onerousness to request such a substitution.

Furthermore, the judge noted that the nature of this procedure obviates the need to consult the plaintiff, who in this case is the Public Treasury. To support his decision, the rapporteur referred to STJ precedents that corroborate this view. These include the internal appeal in REsp 1.915.046/RJ, judged by the 1st Chamber in June 2021, and REsp 2.034.482/SP, analyzed by the 3rd Chamber in March of the current year.

It is evident the consolidated trend of the STJ in recognizing the surety bond and the bank guarantee as effective and less onerous mechanisms to secure tax executions, compared to the foreclosure of real estate properties. This stance, supported by precedents and unanimously backed by the 2nd Chamber, strengthens the application of Article 15, Paragraph I, of Law 6.830/1980, providing the taxpayer with more options in defending their interests and bringing speed to the tax enforcement processes.


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