07/07/2026
In June 2025, the Brazilian National Council of Justice (CNJ), through Provision No. 197, regulated the so-called notarial escrow account, a mechanism that allows public notaries to receive, hold in custody, and administer funds connected with to legal transactions whose completion is contingent upon the fulfillment of conditions previously agreed upon by the parties.
The notarial escrow account is the Brazilian equivalent of escrow arrangements, which are widely used in financial transactions and in mergers and acquisitions. Under such structures, funds are not transferred directly to the counterparty; instead, they remain in custody of a trusted third party until specified conditions have been satisfied.
The rationale behind the notarial escrow account is essentially the same. In this case, however, responsibility for receiving, depositing, and administering the funds rests with the public notary. The funds remain protected until the transaction is effectively completed. Once compliance with the agreed conditions has been verified, the funds are released; otherwise, the funds are reimbursed to the depositor or allocated in accordance with the parties’ prior instructions.
In this context, the public notary performs a dual role: in addition to safeguarding the funds, the notary is responsible for objectively verifying whether the agreed conditions have been fulfilled and based on such verification, authorizing or denying the release of the funds.
The mechanism may be used in a wide range of transactions, including real estate acquisitions, transactions involving high-value movable assets, out-of-court probate and divorce proceedings, corporate transactions, and other arrangements whose completion depends on the fulfillment of future conditions.
Generally, the procedure involves the prior definition of the conditions for the release of funds, the deposit of the relevant amounts into a dedicated account, and the subsequent verification by the public notary that such conditions have been satisfied.
It is important to note that the use of a notarial escrow account requires that the conditions for the release of funds be clear, objective, and capable of verification by the notary. Accordingly, matters requiring complex interpretation or involving disputes between the parties fall outside the scope of the service.
The regulation of notarial escrow accounts represents a significant step forward in the provision of extrajudicial services. By offering a simpler and more cost-effective alternative, it can be considered as safe as escrow arrangements contracted directly with financial institutions.
Authored by: Marcelo Trussardi Paolini and José Silvano Garcia Junior
