This 1 September 2021, a substantial reform of Belgian property law enters into force.
Indeed, Belgian property law has been reformed, by the law of 4 February 2020 setting out Book 3 “The Goods” of the Civil Code (the “Law of 4 February 2020”). This law provides for one of the very few reforms of Belgian property law since the entry into force of the Civil Code (also called the “Code Napoléon”) in 1804, under the French regime, and of the law on the right of emphyteusis (long-term lease) and the law on the building right (right of superficie) in 1824, under the Dutch regime. Of course, since the beginning of the 19th century, Belgian property law had undergone several developments due to case law.
The Law of 4 February 2020 has modernized many rules, among others the right of ownership, the right of co-ownership, neighborhood relations, the right of usufruct (“usufruit” / ”vruchtgebruik”), the right of emphyteusis (“emphytéose” / ”erfpacht”), and the building right (“droit de superficie” / ”opstalrecht”).
The reform is of significant interest for the real estate sector. For operational, accounting, financial and/or tax optimization purposes, many professionals are developing and implementing their projects within the framework of a long-term lease, a building right or a right of usufruct.
The right of emphyteusis is defined as a right in rem to the use, conferring on its holder (the long-term leaseholder) the full use and enjoyment of a building belonging to another person (the owner). The right of emphyteusis is not a lease in the common sense, but a right in rem. Originally, the right of emphyteusis was granted for a minimum period of 27 years and a maximum of 99 years. In the future, it will be allowed to grant it for a minimum of 15 years (and still for a maximum of 99 years).
The building right has been redefined. It is a right in rem to the use, which confers the ownership of volumes, whether built or not, in whole or in part, on, above or below another person’s land, in order to have any works or plantations. The building right allows its holder (the superficiary) to develop a project and erect a building on a property belonging to someone else (the owner). The building right was originally limited to 50 years. Now it will be possible to grant it for a term up to 99 years. Moreover, the Law of 4 February 2020 allows to make the building right perpetual for certain specific uses or building complexes.
The right of usufruct confers on its holder (the usufructuary) a temporary right in rem to the use and enjoyment, in a prudent and reasonable manner, of a property belonging to the “bare” owner, in accordance with the destination of this property and with the obligation to return it at the end of his/her/its right. In practice, a right of usufruct is sometimes used to secure a transaction over time. It is also used to acquire a property in a split transaction. Initially, when the right of usufruct was granted to a legal person (versus an individual), it might be granted for a maximum of 30 years. Now, under the Law of 4 February 2020 an usufruct may be granted to a legal person for a maximum of 99 years.
The theory of abnormal neighborhood disturbances is a creation of case law based on the right of property. According to this theory, an owner may have to compensate for an abnormal disturbance caused to his/her/its neighbor, even without any fault. This jurisprudential theory has been adapted and incorporated into the Belgian Civil Code by the Law of 4 February 2020.
The reform provided for by the Law of 4 February 2020 relates to many other issues: the definition of immovable property has been modernized to include 3D volumes; property ownership is no longer infinite (theoretically from the center of the earth to the sky) and limited to a height above and a depth below the ground useful for the exercise of the owner’s prerogatives, etc.
In conclusion, the Law of 4 February 2020 offers a revised framework to the real estate sector. Moreover, it has settled jurisprudential controversies, so that it provides for more legal certainty.
For any further information, please contact Frédéric Couvreur, our Real Estate & Construction partner (email@example.com).