Buying Off-Plan: The Breyne Law in Ten Points

What protections are provided?

• 1.Ownership of Materials

  The transfer of ownership of the constructions to the buyer takes place gradually as the materials are implemented. Only materials incorporated into the ground or building are covered.
  Through an agreement between the seller and the buyer, the buyer becomes the owner of the property as it is constructed and, more importantly, pays the seller or contractor based on the progress of the works, using a system of tranches.

  This way, the buyer acquires only what exists at any given time and will no longer suffer significant losses in case of the contractor’s bankruptcy or misfortune, as the risks remain the responsibility of the latter.

• 2.A Guarantee

  To better ensure the buyer’s protection, a guarantee (called a bond) amounting to 5% of the building’s price must be paid by the seller or contractor accredited by the Deposit and Consignment Office. For those not benefiting from accreditation, an organization or bank must act as a guarantor to the buyer for the commitments of the seller or contractor. In other words, the completion guarantee is then 100% (art.12).

• 3.Obligation to Annex Plans

  Precise plans and specifications of the works covered by the contract must be annexed to it. This measure allows for a better understanding of the intended works.

• 4.Architect's Signature

  These annexes must be signed by an “architect authorized to practice this profession in Belgium.” This requirement is obviously intended to guarantee the seriousness of these documents.

• 5.Reflection Period

  The legislator even wanted it to be inserted in the contract that “the parties have been aware of the data mentioned in this article for fifteen days” (art.7). Specifying this grants the owner a period of reflection as Article 7 contains most of the protective measures.

• 6.Enhanced Obligation to Inform

  The absence of mention in the contract, in a separate paragraph and in different and bold characters, that the buyer or owner has the right to invoke the nullity of the convention is sufficient to cancel the agreement. The same applies to articles 7 and 12.

• 7.A Fixed Price

  Whether it is construction or transformation, the agreed total price, specified in the compromise or notarial deed, cannot be changed later. This obligation does not exclude a price revision clause, which is optional. This is an adaptation to the price of materials and wages, which can be revised annually. Provided that the price revision clause is included in the agreement, it can be applied. The deposit cannot exceed 5% of the price.

• 8.Suspensive Conditions

  The obtaining of a mortgage and an urban planning permit are the two most common suspensive conditions. The Breyne Law provides a maximum period of three months for the buyer to obtain the credit. The amount as well as the terms of this credit must also be specified so that the buyer does not use this clause to later withdraw from their obligations by invoking a false refusal from the bank. Without going into detail, similar conditions exist for the building permit (date of issuance, terms of obtaining, etc.). Finally, when the permit has not been issued at the time of the contract’s signing, the possibility to suspend the effects of the contract if the permit is refused must be mentioned. In general, in the presence of a suspensive condition, it is advisable not to pay a deposit.

• 9.Execution Period and Penaltie

  To avoid delays, the precise date of the start of the works and the execution period must be included in the agreement. In this regard, it is advisable to calculate in “calendar days” rather than working days, as is usual. The latter are approximately two calendar days, which can mislead the owner or make the computation of deadlines difficult at the end of the project.

  When a delay in execution attributable to the contractor is observed, they are liable to the owner for damages. These correspond to the normal rent that could have been expected if the new or transformed property had been rented out. In practice, it is strongly advised to include a much larger amount, taking into account all the inconveniences and related damages (monthly mortgage payments remain due, cancellation of the move, cost of extending a lease, etc.).

• 10.Provisional and Final Acceptance

  When a building under construction is deemed sufficiently completed to accommodate the owner, a provisional acceptance will take place. The architect, the builder (the company), and the owner will meet on-site, and a careful inspection will be carried out by all, room by room. A contradictory report will be drawn up. The purpose of such a meeting is to detect any imperfections to be corrected or shortcomings to be addressed.
  Attention! The owner who does not wait for this moment and enters the constructed premises on their own initiative is presumed to have tacitly accepted the provisional acceptance.

  If this is not the case, it will then be the owner’s responsibility to prove the opposite.
  At the latest one year after this meeting, the final acceptance will confirm the proper execution of all the works that were still deemed necessary.
  The Breyne Law provides that only a contradictory written record (the report of the acceptance) will be valid as provisional or final acceptance.