Put: Vitor Antony Ferrari and Ivan Kubala*
The application of the IGP-M (general price index – market) has been widely discussed due to the disproportionate accumulation that the index has been indicating since 2020, which has generated an increase in legal demands seeking to replace this index with a less onerous one, mainly in cases involving residential and non-residential lease contracts.
The controversy lies in the following points:
(1) In favor:
(1.1) Excessive burden that results in an imbalance between the parties (article 480 of the Civil Code), which must be reestablished by applying an index that better reflects inflation;
(1.2) Disproportionate accumulation of the IGP-M consists of an unforeseeable fact (article 317 of the Civil Code)
(2) Against:
(2.1) The choice of index is based on the free expression of will of the parties (articles 421 and 421-A of the Civil Code and article 17 of the Tenancy Law), who are aware that this is an index with greater volatility;
(2.2) The contract is law between the parties (pact with servant)
There is also another point that, despite not being included in the context under debate, can also be used in a complementary way, reinforcing the arguments in favor of replacing the index, namely, the prohibition of linking rent to exchange rate variations provided for in the Tenancy Law (Law No. 8,245/1991) to the extent that the IGP-M is significantly impacted by the exchange rate.
Our perception is that there are more favorable precedents in the Courts than unfavorable ones, but there is still the “specific case” factor that cannot be ignored and has great weight in the decisions of the Judiciary.
As an example of the controversy on this issue, we cite below two precedents from the same Court of Justice:
INSTRUMENTAL APPEAL. Residential lease. Revisional approach. Claim of economic imbalance in the contract, based on the readjustment index (IGPM), reflecting an abusive index, well above other inflation indicators. Request for granting of urgent relief, with a momentary change of the index, to IPCA. Plaintiff's appeal. Granted. (TJSP; Instrumental Appeal 2138874-96.2021.8.26.0000; Rapporteur: Carlos Russo; Judging Body: 30th Private Law Chamber; São José dos Campos Forum – 7th Civil Court; Judgment Date: 08/18/2021; Registration Date: 08/18/2021)
REVISIONAL ACTION – LEASING OF SPACE IN A SHOPPING CENTER – URGENT PROVISIONAL RELIEF INTENDING THAT THE APPLICATION OF THE IGPM BE REMOVED AND THE IPCA BE USED FOR THE PURPOSES OF THE LATEST ADJUSTMENT OF THE MINIMUM RENT VALUE – REJECTION – POSSIBILITY – ABSENCE OF LEGAL REQUIREMENTS OF LIKELIHOOD AND IMMINENT RISK OF DAMAGE – MAINTAINING THE DECISION FOR CAUTION IN WAITING FOR THE INSTITUTION OF THE ADVERSARY PROCEEDINGS FOR BETTER ASSESSMENT OF THE ISSUE APPEAL DISMISSED (TJSP; Instrument Appeal 2165120-32.2021.8.26.0000; Rapporteur (a): Andrade Neto; Judging Body: 30th Private Law Chamber; Regional Court IX – Vila Prudente – 4th Civil Court; Judgment Date: 08/17/2021; Registration Date: 08/18/2021)
Finally, it is also worth highlighting that there is a Bill (PL 1026/2021) under consideration in the Chamber of Deputies, which aims to establish that the correction index for residential and commercial lease contracts cannot be higher than the country's official inflation index - IPCA, as well as an Action for Non-Compliance with Fundamental Precept (ADPF) that is being processed in the Supreme Federal Court under number 869, also questioning the replacement of the IGP-M by another index.
However, despite the apparent favorable scenario for tenants, the recommendation is to always negotiate with landlords before taking the matter to court, and it is important, even in the pre-litigation or negotiation phase, to have legal advice for a detailed analysis of the case, where all essential points for the composition or eventual Legal Action will be observed.