A Q&A guide to corporate real estate law in Belgium.
The Q&A gives a high level overview of the corporate real estate market trends; real estate investment structures, including REITs; legislation; title and public registers of title; confidential information; state guarantee of title; tenure; sale of real estate; seller's liability; due diligence; warranties; cost; taxes and mitigation, including VAT and stamp duty/transfer tax; climate change targets; third party outsourcing; restrictions on foreign ownership or occupation; finance; leases; planning law and consents; and proposals for reform.
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The international financial crisis and economic recession are still affecting the Belgian real estate market, although there are some signs of improvement as the number of transactions is increasing slightly.
The Belgian authorities are still a key player on the real estate market, concluding public private partnership (PPP) and design-build-finance-maintain contracts to initiate and finance real estate projects.
Notable transactions include the:
Sale by BNP Paribas Fortis of the historic headquarters of savings and pension group CGER (ASLK), named the Chambon Cluster (75,000 square metres), in the centre of Brussels to the Allfin Group. This deal is the city's largest real estate redevelopment transaction of the past five years.
Acquisition of 100% of the shares of the companies owning the piece of land in the Leopold district of Brussels by the Allfin Group from O'Connor Property Group and a syndicate of private Irish investors. The site will be developed to offer 5,200 square metres of office accommodation and 11 residential buildings totalling about 30,000 square metres.
Acquisition of the Broodthaers office building (17,700 square metres) in the South City office complex in Brussels by Allianz Real Estate from a partnership of Belgian developers Atenor, Espace Midi and BPI, for about EUR70 million (as at 1 September 2011, US$1 was about EUR0.7).
PPP for the design, build, finance and maintain of four new prisons in Belgium. This project represents an investment value of around EUR1 billion. This project is the most important PPP project of the Government.
Despite the international credit crunch, Belgium remains a relatively safe place for foreign investment. At the European level, Brussels remains a highly rated business location, particularly in relation to semi-industrial, logistics, flats and hotels.
The two main structures used to invest in real estate are the:
Asset deal. This involves directly buying and letting property.
Share deal. This involves acquiring shares in special purpose companies whose sole or main assets are the underlying property.
Other structures such as long leases (that is, a temporary right in rem for a period between 27 and 99 years) and superficies (that is, a temporary right in rem with a maximum duration of 50 years) are also used. These are financial set-ups in which the ownership of the land and the rights over the building belong to different legal entities (see Question 9). Sales of these structures can again consist of either:
An asset deal, in which the different legal entities themselves transfer their ownership of the land and rights over the building.
A share deal in which the shares of the different legal entities are sold.
A combination of an asset deal and share deal is also possible (for example, the direct sale of the rights over the building together with a sale of the shares of the entity owning the land).
Belgian REITs (Société d'Investissement à Capital Fixe en Immobilier) (real estate investment company) (Sicafi) are investment trusts with fixed capital that only invest in real estate. The minimum capital requirement is EUR1.24 million.
The Sicafi offers investors a fiscal advantage as a company tax exemption applies if 80% of the company's net profit is distributed (a real estate tax still applies). In addition, real estate tax is not due on the distributed dividends of residential Sicafis (that is, Sicafis that invest at least 60% of their portfolios in residential real estate).
Institutional investors such as pension funds and Belgium's favourable tax treatment of pan-European funds play an important role in Belgium's real estate market.
Private entities can obtain public real estate contracts through PPPs for the modernisation of public infrastructure, and for the improvement of public services, by supporting the financial risks involved.
Real estate legislation varies between the three Belgian regions:
The Brussels-Capital region.
The Flanders region.
The Walloon region.
Investors who set up a real estate business in Belgium must obtain the necessary permits and permissions for each project to ensure that they comply with environmental law, urban planning and environmental remediation regulations.
There is also specific legislation on acquiring property, long leases and superficies, and on commercial, residential and "common" leases (see Question 30), which establish the rights and duties of the parties. Some provisions in this legislation are compulsory (which means that no derogation is possible) while others are not.
Real estate, commonly called "property", gives the right to enjoy, receive benefits from and dispose of, the ground itself and the space above the ground. Land and any buildings on it owned by the same entity are registered together in a single title.
A notarial deed evidences the purchase of real estate and it must be registered in the Land Register and Mortgage Office by a special procedure (called a transcription procedure). The Land Registry and Mortgage Office manage the public title register.
Information usually contained in the Land Register and Mortgage Office includes:
The names of the parties.
A description of the real estate.
The type of ownership rights (see Question 9).
Any mortgages over the real estate.
The purchase deed is transferred by the notary to the Land Registry and Mortgage Office, and is then publicly available.
A notary is a public officer and is responsible for the drafting and legitimacy of the title contained in the notarial deed. The registration of title in the Land Register and Mortgage Office provides public proof of the transfer of ownership rights, so that third parties are considered to be informed of the title. Title insurance is available, but not generally used.
Property can be held under:
Full ownership. This is similar to the concept of holding property as land in fee simple.
Co-ownership. Land can be held jointly either as joint tenants or as tenants-in-common.
Leasehold. The tenant occupies the property for a period of time under a lease (see Question 30).
Superficies. This is a temporary right in rem which confers on its holder enjoyment of real property belonging to the grantor.
Long lease. This is a temporary right in rem that allows its holder to own buildings, works or plant on land belonging to another person.
Certified professional real estate agencies generally market real estate using common publicity channels, such as the internet and advertising.
Professional real estate agencies usually begin the commercial negotiation process in collaboration with their clients. Following this, the parties' legal advisers negotiate the legal aspects of a transaction and enter into transaction documents, such as the letter of intent and sale contracts.
A letter of intent is generally signed before the start of negotiations and the due diligence process. This letter of intent sets out the pre-contractual arrangements between the parties, such as:
A purchase price formula.
Any applicable conditions precedent.
The term of the exclusivity period.
The scope of the due diligence documents.
A distinction exists between a sale contract in an asset deal and one in a share deal.
An asset deal requires the execution of a notarial deed. However, the parties first enter into a private sale contract. A lawyer usually prepares this private sale contract. After the signing of the contract, the parties execute a notarial deed before a Belgian notary. This notarial deed confirms and restates the conditions of the private sale contract. The deed is required to give the transaction formal status, and to provide public proof of the transfer of ownership rights in the real estate.
In a share deal, where a Belgian legal entity that owns real estate rights is sold, the sale of shares can occur through a private instrument (such as a contract). The intervention of a notary is not required.
A letter of intent is not usually binding unless the parties agree otherwise. However, a letter of intent must be drafted carefully because a contract (whether in writing or not) is deemed to be legally binding when there is an agreement on object and price. As a result, a letter of intent could already be considered to be a binding document, even if it is marked non-binding.
If the letter of intent is not binding, the parties are usually bound at the contract stage.
An asset sale contract must be registered and transcribed within four months of its execution date. Registration is necessary to pay the transfer taxes and transcription is necessary to provide public proof of the transfer of ownership rights in the real estate. The notarial deed is filed with the public authorities to register the transfer of real estate and to transcribe the ownership title.
In a share deal, the sale of shares does not require registration with any public authority. Depending on the nature of the shares transferred, either of the following is required:
A simple conveyance (in the case of bearer shares).
A registration of the transfer of the shares in the shareholders' register of the company (in the case of registered shares).
In an asset sale, ownership is transferred as soon as the parties have reached an agreement on the price and object, even if the parties have not entered into a written agreement. An oral agreement is sufficient. As a result, most written agreements contain a clause relating to the time of title transfer (that is, the closing date). In most cases, the ownership of real estate assets is transferred on the date of the notarial deed.
In a share deal, the parties usually execute a share purchase agreement. However, closing is made dependent on the fulfilment of conditions precedent, which may relate to the underlying asset. For example, a condition precedent may involve the performance of due diligence (on both the real estate asset as well as the company) satisfactory to the buyer (if not already done). In that case, the effective transfer of the shares of the company owning the underlying asset occurs only on closing.
In an asset deal, the seller must provide the buyer with sufficient information on the real estate. This means:
All particular conditions affecting the real estate, such as those concerning:
the status of the building;
All defects known by the seller at the time of transfer.
In addition to the general rule about the disclosure of information, the seller has a legal obligation to provide the buyer with specific information, such as information on:
Works carried out.
The public notary requests mandatory information from public databases and includes it in the notarial deed.
These disclosure obligations do not exist in a share deal. Instead, the buyer must generally perform extensive due diligence not only on the real estate assets but also on the company whose shares are being transferred (for example, a review of the accounts as well as a tax and legal review). The seller also generally gives extensive representations and warranties in the share purchase agreement, though this depends on the negotiation power and skills of the parties involved.
Before an acquisition of real estate, the buyer's advisers examine the legal and commercial status of the real estate by investigating the following:
Ownership titles and other rights, such as:
The rental status and validity of lease agreements.
The planning and zoning situation, and building permits.
Building contracts and files.
Environmental permits, and other required authorisations and permits.
Waste, asbestos and other hazardous materials.
The seller must provide the relevant information to the buyer, but if it cannot, the buyer can consult public sources, such as:
The mortgage office.
The local municipality's permits' register.
The public waste agency.
In a share deal, the scope of the due diligence is normally broader, and includes a financial, tax and corporate review of the company whose shares are being transferred (see Question 11).
The selling process usually determines the kind of warranties given. If the buyer carries out due diligence, or if the price is relatively low, the seller's warranties are limited. If no due diligence is carried out, the seller's warranties given to the buyer typically relate to:
Full ownership of the property by the seller.
The absence of other real estate rights affecting the property negatively (such as easements and encumbrances).
Good status of the buildings.
Compliance of the building and land with all legislation and regulations (such as building and environmental permits).
Absence of waste, asbestos and other hazardous materials.
Absence of soil pollution.
Absence of legal proceedings affecting the property.
Absence of governmental decisions affecting the property negatively.
Good status and validity of lease agreements.
In an asset deal, an owner or occupier can inherit liability for matters relating to the real estate (such as soil pollution), even if they occurred before the owner bought or occupied it.
The contractual terms should resolve questions of liability. The contract often contains warranties on this kind of risk and on the risk transfer (for example, if there are oil tanks on the land). In addition to the arrangements entered into between the buyer and the seller, the relevant legislation must be referred to so that the person responsible for handling the problem and taking the necessary measures can be identified (in most cases, this is the person who is in control of the land and building).
In a share deal, the buyer indirectly inherits all liabilities, as it acquires the shares of the company that has incurred the liabilities and which continues to be liable for them.
In an asset deal, a seller or occupier can retain liabilities relating to the real estate (such as for soil pollution and defects in the building) even after it has disposed of it.
The contractual terms deal with liability, and they often contain warranties on these kinds of risk and the risk transfer (for example, soil pollution and asbestos). The parties can also enter into an agreement which ensures that the seller will not have any liability for matters relating to the real estate, even if they occurred pre-disposal.
In addition to the arrangements entered into between the buyer and the seller, the relevant legislation must be checked to determine the consequences that may apply if a particular liability arises. This includes legislation such as that on soil pollution, asbestos and construction works.
In a share deal, the seller is generally no longer indirectly liable as it has disposed of the company that has incurred the liabilities. However, it usually remains liable through the granting of representations and warranties in the share purchase agreement.
The buyer pays its advisers' fees. In addition, it pays registration taxes related to the transfer of real estate and the notary's costs related to the notarial deed. The parties can agree for the seller or another party to pay these costs instead of the buyer. In a share deal, registration taxes are not generally due (see Questions 17 and 18).
The seller must pay its advisers.
The acquisition of real estate by way of an asset deal is subject to VAT or to registration duties (transfer tax) (see Question 18) in Belgium. When a sale is subject to VAT, transfer taxes are not due (except for a lump sum tax of EUR25).
VAT applies to the transfer of new buildings. Buildings are considered new until 31 December of the second year following the year in which the building was first occupied or taken possession of. As from 1 January 2011, the transfer of land (that is, land "for which permission was obtained to build on it and which is transferred by one and the same person, together with the building to which it belongs") that belongs to a new building or part of a new building is subject to VAT provided the transfer of the building itself is subject to VAT.
The following transactions are VAT exempt and therefore subject to transfer tax:
The transfer of old buildings and their accompanying land.
Transfers of vacant land.
(In relation to transfer tax, see Question 18.)
The current VAT rate is 21%. VAT is payable on the total amount received by the seller (the market value of the property is the minimum taxable basis for a sale). It becomes payable on "delivery" of the property. VAT is recoverable if the property is to be used for carrying out activities subject to VAT.
In a share deal, no VAT is generally due (see Question 19).
Transfer taxes are due on an asset disposal (real estate) that is no longer "new" for VAT purposes (see Question 17). Transfer taxes vary depending on the region in which the real estate is located. Real estate is subject to a transfer tax of:
10% of the purchase price of the property (or its fair market value if higher) if the real estate is in the Flemish region.
12.5% of the purchase price of the property (or its fair market value if higher) if the real estate is in the Walloon or Brussels-Capital regions.
If the buyer qualifies as a professional reseller, it can pay a reduced rate of 5% (8% in the Brussels-Capital Region).
The buyer or seller can pay the transfer taxes, although generally, the buyer pays these costs.
In a share deal, transfer taxes are not generally due (see Question 19).
To reduce the transfer tax burden, an asset deal can sometimes be executed as a split sale, provided strict conditions are adhered to. This involves:
The vesting of a long lease right in rem in one party. This party must pay transfer tax of 0.2% of the consideration paid for the long lease right in rem. (In rem rights are related to the ownership of property and are not based on any personal relationship.)
The transfer to another party (often linked to the first party) of ownership encumbered with the long lease right in rem. In this case, transfer tax of 10% or 12.5% of a limited value of the property is due.
The total transfer tax burden of a split sale is about 1% of the value of the property transferred.
Alternatively, an asset deal can be structured as a share deal. On disposal of the shares of the real estate company, capital gains tax may be avoided to the extent that the shareholders are residents of a country that exempts the payment of capital gains tax on shares (for example, Belgium). Unlike an asset sale, the sale of the shares of an asset-owning company does not generally trigger any transfer tax or VAT.
However, care must be taken to avoid the share deal being re-classified as an asset deal for tax purposes.
Directive 2002/91/EC on the energy performance of buildings (Energy Performance Directive) has been implemented by similar regulations in the Flemish, Walloon and Brussels-Capital regions. These give minimum requirements for the energy performance of new buildings and large existing buildings that are subject to major renovation. Depending on the nature of the work and the purpose of the building or part of building, there are requirements covering:
Indoor climate and heating ventilation.
These requirements aim to reduce buildings' greenhouse gas emissions. The energy performance obligations will be progressively increased during the following years, depending on the regulations in each region.
Companies that have real estate assets regularly use real estate specialist companies to assist them in real estate transactions or operations that do not fall within their core business.
These specialised companies can also organise and structure real estate transactions (tax, finance and so on) as well as the management of the facility and of technical services (facilities manager).
Belgian law on real estate agencies was consolidated in January 2007. Since then, contracts entered into with real estate agents must be in writing and include a set minimum amount of information.
Nothing generally prevents a foreign company from purchasing or occupying real estate in Belgium.
In relation to guarantees and securities, the relevant sale agreement or lease generally stipulates that these must be provided through a recognised bank established in Belgium.
A change of control of a company does not usually influence the ownership or use of real estate assets. However, it is possible for real estate agreements (such as lease agreements, rental agreements and long-term leases) or financing agreements, to contain certain conditions or formalities concerning a change of control, such as the requirement for:
Approval from the owner or the bank.
This issue should be reviewed during due diligence.
In the following circumstances, Belgian authorities can compulsorily purchase a real estate asset belonging to a person or a company:
Public authorities can force a person or a company to sell an asset through an expropriation procedure. This procedure can only be used if the land is required for the common public interest (for example, an airport expansion, the building of railways and so on). In the case of expropriation, the prior owner of the land is compensated for costs incurred.
In certain well-defined zones, some authorities have a pre-emptive right to a real estate asset. In other words, they have the right to buy an asset at the price requested by the seller (either a person or a company) before any other potential buyer.
The municipal taxes levied on business premises vary from one municipality to another. Sometimes the tax depends on the occupied surface area (for example, a tax on office space). At other times, the tax is levied in the form of a lump sum (such as a tax on bank branch offices). Business premises are often subject to different municipal taxes at the same time.
Tax rates can also differ depending on the number of square metres that are occupied (for example, the tax rate is EUR10 per square metre in the municipality of Anderlecht).
Some municipalities charge a reduced tax rate (for example, in the municipality of Ixelles) or provide for exemptions (such as in the municipality of Anderlecht, if the area does not exceed 50 square metres).
There are no tax consolidation rules in Belgium. As a result, acquisitions of real estate (asset deals) or shares of companies holding real estate (share deals) are generally debt financed. Belgian tax legislation does not impose an overall debt-to-equity ratio for Belgian companies, unless loans are granted by certain "tainted" lenders. (Debt is tainted if loans are granted by a lender that is either not subject to income tax, or in relation to interest, is subject to tax treatment that is considerably more favourable than the general tax regime.)
The interest expense on a loan is generally tax deductible at the level of the company acquiring the real estate or the shares. If a Belgian company pays interest to a lender established in an EU member state, this benefits from an exemption from withholding tax if both entities are qualifying entities under Directive 2003/49/EC on a common system of taxation applicable to interest and royalty payments made between associated companies of different member states (Interest and Royalty Payments Directive). This is provided that both entities are "associated companies". Associated companies are those where:
One or both companies has (or have) a minimum direct or indirect share participation of 25% in the capital of the other company, or a third company that owns, directly or indirectly, at least 25% of the share capital of both companies.
The shareholding is held or will be held for an uninterrupted period of at least one year.
The notional interest deduction (NID) has, however, existed since the 2007 tax year. This allows an off balance sheet deduction, for tax purposes only, calculated by applying a NID rate on the accounting net equity of the company acquiring the real estate, as corrected for tax purposes. This change to the tax regime means that debt and equity funding are no longer subject to different tax treatment. As a result, companies can finance real estate acquisitions with equity, to the extent that sufficient funds are available, and can benefit from the NID deduction without making any correlating effective cash-out payment. The NID rate for a given tax year depends on the ten-year government bond interest rate of the calendar year two years before the given tax year (for example, for tax assessment year 2012 reference is made to the 2010 government bonds). For budgetary purposes, the NID rate for tax assessment years 2011 and 2012 (that are the financial years ending respectively as from 31 December 2010 and 2011) has been capped at 3.8% (or 4.3% for small and medium-sized enterprises). The real NID rate 2012 amounts to 3.425% (or 3.925% for small and medium-sized enterprises).
Real estate is commonly used as security for debt finance (see Question 28).
Sale and leasebacks are sometimes carried out to raise financing, provided that there are bona fide business needs to justify these transactions. The sale of the real estate is subject either to VAT or to transfer tax (see Question 17).
Funds realised from the disposal of real estate are subject to capital gains tax at the standard corporate income tax rate of 33.99%. Capital losses are generally tax deductible.
If the lease qualifies as a finance lease under accounting law, a Belgian tenant can normally record the leased asset as a tangible fixed asset on its balance sheet, and depreciate that asset. The at-arm's-length interest portion of the lease payments is generally tax deductible as a business expense.
If the lease qualifies as an operational lease, lease payments due from a Belgian company are usually tax-deductible costs.
Third-party lenders (for example, banks) generally request security on granting a loan. Such security can be in rem or personal (for example, a guarantee). Acceptable security in rem can be:
A mortgage on the property.
A mortgage proxy on the property.
A pledge on the shares of companies that own, either directly or indirectly, the real estate concerned.
A pledge on shares is the most cost-effective security structure, as no notarial deed is legally required. However, banks often insist on a mortgage, or a mortgage proxy as security. A mortgage and a mortgage proxy on real estate in Belgium must be enacted by a Belgian notarial deed. The vesting of security through a notarial deed is subject to stamp duty.
There is generally no legal obstacle to financing through real estate securitisation if the transaction is made at arm's length.
However, real estate securitisations of Belgian properties do not often occur, as the transfer of real estate is subject to significant transfer taxes comprising:
10% of the purchase price of the property (or its fair market value if higher) for property located in the Flemish Region.
12.5% of the purchase price of the property for property located in the Walloon or Brussels regions.
As a result, this option is too costly.
The Civil Code distinguishes between common leases (concerning offices, parking places, warehouses, industrial buildings and so on) and two other types of leases, namely:
The residential lease, that is, the lease of the tenant's principal residence. These leases are regulated by the Law of 20 February 1991.
The commercial lease, that is the lease of a property which the lessee or sub-tenant intends to use mainly for carrying out commercial retail activity and craftsman activities in direct contact with the public (for example, workshops and supermarkets). These leases are regulated by law.
In contrast to common leases, residential and commercial leases are strictly regulated and provide less room for negotiation, which means that most contractual lease terms are regulated.
As the Belgian legislator considers the tenant to be the more vulnerable party to a residential or commercial lease, certain clauses must be included to protect the tenant.
Leases can be executed in a private agreement. Each party has to receive a signed version of the lease and an additional copy of the signed lease must be filed with the Land Register for registration.
Leases for more than nine years must be executed before a notary. A notary deed evidences the lease and is registered in the Land Register and Mortgage Office by a special procedure (called a transcription procedure). The Land Registry and Mortgage Office manage the public title register.
The Civil Code does not regulate rent reviews under common leases, but does so for residential and commercial leases (see Question 30).
In relation to residential and commercial leases, a rent review can only be requested at certain set times during the lease. In addition, a rent adjustment for these types of leases must amount to a 15% or 20% increase or decrease for a judge to legally allow it.
The letting of real estate is exempt from VAT. If the landlord provides additional services, part of the rent may (under certain conditions) be subject to VAT.
There is no required length for common leases but residential and commercial leases must have a minimum length of nine years. However, a residential lease can also last for three years (under certain conditions). A short lease agreement is subject to certain restrictions (early termination is not possible, unless otherwise agreed by the parties).
Tenants of business premises may have security of occupation or rights to renew the lease at the end of the contractual lease term. In a common (office) lease, renewal is deemed to occur if the tenant continues to occupy the premises at the end of the contractual lease term, without the landlord's objection (unless the parties contractually agree otherwise).
In a commercial lease deemed renewal cannot occur and a renewal request must be made. The tenant's request and the landlord's response are subject to strict conditions (concerning the period when the request must be made, reasons for refusal of the request and so on).
Unless agreed otherwise with the landlord, the tenant of a common lease can assign or sublet the lease. Prior consent of the landlord is not necessary, but is recommended.
A residential tenant cannot assign or sublet a lease without the landlord's prior and written consent, unless otherwise agreed with the landlord.
Unless contractually agreed otherwise with the landlord, a commercial lease tenant can assign or sublet the lease. Any prohibition on assigning or subletting the lease is deemed invalid if that assignment or subletting occurs with the transfer of the tenant's business.
There is no particular regulation of companies in the same group. They are considered to be third parties. In principle, the normal rules on assignment and subletting apply (see Question 34).
The tenant is usually responsible for minor and daily repairs, while the landlord is responsible for major repairs (for example, roof repairs).
Liability for insuring leased premises is not regulated by the Civil Code. This must be agreed by the parties.
However, as the tenant is liable for any fire at the leased premises (in the absence of proof to the contrary), the tenant is advised to obtain fire insurance.
Common leases cannot be terminated before their set end date, if no early termination option is included in the lease. It is advisable to deal with issues concerning this in the lease (for example, when the agreement can be terminated, the length of the notice period and so on).
In relation to residential leases, early termination is possible:
By the landlord, with a six-month notice period, if the landlord wishes to occupy the premises himself, to rebuild or renovate the building, or for none of these reasons but on payment of an indemnity.
By the tenant, at any time with a three-month notice period, without giving a reason. The tenant must pay an indemnity if termination occurs within the first three years of the lease.
In relation to commercial leases, early termination is possible:
By the landlord, with a one-year notice period, although only if he wants to occupy the premises himself and the lease explicitly provides for this possibility.
By the tenant, with a six-month notice period, without any specific reason, although only at the end of each three-year period.
The tenant's insolvency does not automatically terminate the lease.
The bankruptcy trustee generally continues to execute the lease and the rent due is considered to be a common debt. However, the bankruptcy trustee can terminate the lease unilaterally.
The three regions of Belgium are responsible for town and country planning as well as environmental planning.
In the Flemish region, the Flemish parliament and government regulate planning control. Most planning legislation is contained in the Flemish Code of Spatial Planning (Vlaamse Codex Ruimtelijke Ordening). This code is the general framework for town and country planning and has been implemented by several regulations (see Question 42, Initial decision).
In the Brussels-Capital region, the parliament and government of the region regulate planning control. The Brussels Town Planning Code of 9 April 2004 (Brussels Wetboek voor Ruimtelijke Ordening (in Dutch) or Code bruxellois de l'aménagement du territoire (in French)) is the legislative framework for town and country planning. The Brussels Town Planning Code sets the rules and conditions applicable to building permits, as well as the time periods within which the authorities must reach a decision on applications.
In the Walloon region, the parliament and the ministry of the Walloon region regulate planning control. The Walloon Code for regional development, town planning and heritage of 14 May 1984 (Code wallon de l'aménagement du territoire, de l'urbanisme et du patrimoine) is the legislative framework for town and country planning. It contains rules and regulations on the contents and procedures related to the different planning instruments and planning administrations.
If an owner wishes to transfer part of his land as a residential plot, he must obtain a subdivision or allotment permit to subdivide his land into separate plots. Subdivision permits are granted subject to conditions, which can include certain work to be paid for by the applicant, such as:
Building or resurfacing roads.
Creating public green spaces.
A building permit is generally required before starting building work. A building permit is also required to demolish or renovate a property, or to change the property's use. This applies even if the constructions are only temporary or mobile. Whether a building permit is required for a specific project also depends on the region in which the plot of land is located.
An environmental permit may also be required for activities that have a major impact on the environment. A socio-economic permit may be required to carry on retail business.
The answers below relate to the building permit (see Question 41).
In principle, the Mayor and Aldermen of the local authority can grant a building permit.
However, if a public authority applies for a building permit or if the building permit relates to works of public interest or to protected areas, the Flemish or Walloon government or the authorised officer of the Brussels-Capital region can grant permits in certain cases.
Third parties can lodge an objection to a building permit application during the public inquiry if such an inquiry takes place (see below, Public inquiries).
In addition, in the Flemish region third parties can lodge an appeal under the same conditions as the applicant for a building permit (see below, Appeals).
In the Brussels Capital Region and the Walloon Region third parties can only lodge an appeal with the State Council to suspend or annul a building permit.
A building permit application is not generally subject to a public inquiry, unless a specific regulation imposes one. However, a public inquiry is necessary for many building permit applications, for example, if:
There is an impact on the environment.
The application derogates from existing zoning plans.
The application relates to a protected building.
All three regions have a list that sets out when building permit applications are subject to a public inquiry.
In the Flemish region, a different decision procedure exists for local authorities under the Flemish government's guardianship, and other local authorities which have more decision-making autonomy. An initial decision by the Mayor and Aldermen of a local authority not under this guardianship is made within 75 days, if no public inquiry is required and the application is not combined with an environmental permit application. Otherwise, the Mayor and Aldermen have 105 days to make a decision. If the Mayor and Aldermen fail to make a decision within 75 (or 105) days, the building permit is deemed to have been refused.
In the Brussels-Capital region, the Mayor and Aldermen have between 45 and 120 days to make a decision. In the Walloon region, this period is between 30 and 115 days. In both regions, the applicable term depends on whether or not a public inquiry is required and on the number of approvals needed from other authorities. This term can be extended in certain circumstances.
The set decision-making periods are not legally binding, and the Mayor and Aldermen can still validly make a decision after the periods have expired. If no decision is taken within the set period, the applicant can send his application to the authorised officer of the Brussels-Capital region or the Walloon region, who will then process the application.
In the Flemish region, the applicant and third parties who are affected by the works (and in some cases, the competent authorities) have a right to appeal the decision. This appeal is firstly heard by the provincial deputation. Then an appeal to suspend or annul the decision of the provincial deputation is possible with the council for permit disputes.
In the Brussels-Capital region, the applicant and in some cases, the competent authorities can appeal against a decision of the Mayor and Aldermen. An appeal against the decision of the Mayor and Aldermen is made directly to the Brussels-Capital regional government.
In the Walloon region, applicants and in some cases, the competent authorities, have a right to appeal a decision. This appeal is heard by the Walloon government or for minor permits, by the authorised officer of the Walloon region.
No specific legal proposals concerning real estate have been announced for 2012.
Main activities. IBGE manages all soil and waste pollution matters. It also issues environmental permits in Brussels.
Main activities. OVAM is responsible for waste management and soil remediation in Flanders. It issues soil certificates and assesses preliminary and descriptive soil examinations and reports concerning soil remediation.
Main activities. These bodies initiate most of the major real estate development projects in Belgium.
Qualified. Belgium, 1991
Areas of practice. Real estate; regulatory and environmental law.
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