The judge, Joao Gebran Neto, was the first of three appeals court judges to present his decision at the court in the southern city of Puerto Alegre.
The two other judges were to deliver their verdicts later Wednesday in Lula's appeal against a 9.5-year sentence for corruption as part of Brazil's sprawling "Car Wash" graft scandal.
Confirmation of the sentence would effectively end Lula's hopes of running in this year's presidential election.
Defense lawyer Cristiano Zanin Martins had told the court it was clear OAS owned the apartment and "Lula never got the keys and never spent a night there."
But in a judgement reading that took three hours, Neto said there was evidence "that the triplex apartment, from the beginning, even before the OAS took over the works, was reserved for President Lula."
He said he had decided to raise his 9.5-year sentence to 12 years and one month, considering the position Lula held.
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