In a decision on September 19, the São Paulo Court of Appeals (TJ-SP) maintained the repeal of an injunction that had suspended the right of filing in the city. The licensing processes of projects registered with the Municipal Government (PM-SP) under the old law continue their normal proceeding.

The injunction had been granted in February of this year, in the context of a Direct Action of Unconstitutionality (ADIn), filed by the Public Prosecutor’s Office of the State of São Paulo (MP-SP), by its attorney general, to declare the incompatibility of the so-called “filing right" with the Constitution of the State of São Paulo’s. In accordance with article 162 of Municipal Law No. 16,402/16 (São Paulo Land Use and Occupancy Act), this mechanism ensures the application of the legislation in force on the date of filing of the licensing procedure upon the city government, even if supervening laws change the rules applicable to the land.

Although the motivation of the ADIN was based on a specific case of a business located in a special zone of environmental protection (Zepam) and, therefore, with more restrictive rules, the effects of the injunction were applied indiscriminately to all the licensing proceedings whose licensing had been filed under the old Zoning Law, regardless of the stage of their implementation. In other words, projects still at an early stage, with no decision handed down, were affected likewise to those that were already in an advanced stage of construction to comply with execution permits issued, thus causing great insecurity for the real estate sector and the city government, which suspended the processing of all cases from then on.

On May 16, by a majority of votes (17 against 7), the Special Commission of the TJ-SP amended the preliminary ruling, thus re-establishing the right of filing and allowing the resumption of of the PM-SP´s review of the licensing processes.

Against this decision, in order to remedy alleged obscurity, contradictions, or omissions, the Public Prosecutor's Office filed a motion for clarification, which was rejected in a decision by the TJ-SP on September 19, thus maintaining the repeal of the injunction and, likewise, the normal course of licensing processes before the PM-SP.

A judgment on the merits is still pending and is expected in 2018. The expectation of the market is that the content of the decision will be maintained and has as positive indicators the last decisions and their reasoning.