50 years of the Breyne law: what is its scope?

On January 1^st, 2022, the law regulating the construction and sale of dwellings to be built or under construction, better known as the “Breyne Law”, celebrated the 50^th anniversary of its coming into force.

This law, which is said to have been hastily passed following the resounding bankruptcy of the Belgian developer ETRIMO, is an important milestone in the security of turnkey real estate sales in Belgium. It is still invoked every day in real estate disputes and remains more topical than ever.

This is the opportunity to come back throughout the month of January on specific questions regarding the application of this law:

• Its scope of application
• The contractual formalities to be respected
• The mandatory financial guarantee to be constituted and its release
• The particular role of the architect

Let us start with the scope of application of the law.

1/ Which real estate sales operations are covered by the Breyne law?

As its Article 1 shows, the Breyne law extends to many types of real estate construction.

It thus covers agreements that, cumulatively:

• have as their object a dwelling to be built or in the process of being built located in Belgium (including the sale of a dwelling with an undertaking to convert or extend it);
• are aimed at providing the purchaser or the owner with a completed family home (“turnkey”);
• which involve pre-financing of the construction by the purchaser or the owner.

Mixed-use property (professional and non-professional) as well as accessories to the dwelling (such as garages) follow the principal’s regime and are also subject to the law.

2/ Which real estate sales transactions with an advance payment are excluded from the Breyne law?

The scope of the Breyne law requires a commitment to complete the property covered by the contract. This means that, except in cases of fraud, it does not apply to “partial” work.

The construction of a shell and certain finishing work, excluding, for example, electrical, heating or sanitary work, entrusted to other parties outside the promoter, is not subject to the Breyne law.

In principle, the same applies when, during the course of the contract, certain items of completion work necessary for the habitability of the building are withdrawn from the developer by amendment.

It should be noted, however, that the parties may validly decide to make an operation that does not meet the conditions for application of the Breyne law subject to the law.