TJ of São Paulo orders the company to replace IGP-M with IPCA in rental contracts

The paint manufacturer Sherwin-Williams got in court the replacement of the IGP-M (General Market Price Index) as a correction index of its lease agreement with a real estate investment fund.

Starting this year, the rental agreement valid until 2029 will be adjusted by the IPCA (Broad National Consumer Price Index), the official inflation calculated by the IBGE (Brazilian Institute of Geography and Statistics).

The decision of the 29th Private Law Chamber of the São Paulo Court of Justice is one of the first judgments in the second instance and may set precedents for other tenants' lawsuits. In 2020, with the increase of the IGP-M, tenants sought the judiciary after they were unable to negotiate their contracts.

In May of this year, the 12-month accumulated IGP-M hit 37%, a peak in the historical series of the Getulio Vargas Foundation, which calculates the index. In the same period, official inflation was 8%. Until November, rent inflation was 17.89% in 12 months. The November IPCA will be published on Friday (10). In the 12 months until October, it was at 10.67%.