Usufruct, emphyteusis and superficies under the new property law

Usufruct, long-term lease and building rights under the new property law

News

26-11-2021

This contribution examines the new provisions of Book 3 on usufruct, ground lease and building lease that are relevant to commercial real estate transactions. From a practical point of view, the most important changes and their consequences are analysed and explained by means of concrete application cases. The book takes an integrated approach, considering the possible tax impact in the field of registration duties and the possible consequences in the context of real estate financing.

On 17 March 2020, the Act of 4 February 2020 inserting Book 3 "Goods" into the new Civil Code was published in the Belgian Official Gazette. With the new Book 3, the legislator wishes to better structure (the rules of) property law, to modernise it and to integrate it into one legal text. Thus, various laws, including the Building (Listed Buildings) Act, the Leasehold (Erfpacht) Act and various provisions of the Mortgage Act, are abolished and implemented in Book 3. In addition, the legislator aims to create a functional, usable and flexible property law with a new - sometimes delicate - balance between will autonomy and legal certainty.

The new provisions of Book 3 entered into force on 1 September 2021, with the exception of some provisions on immovable property which will enter into force on 1 July 2022 at the latest (unless the King provides for an earlier date). In general, the new provisions are applicable to all legal acts and facts that took place after 1 September 2021 (with a transitional arrangement for building rights granted before the entry into force in the context of immovable heterogeneous complexes).

In this contribution, we limit ourselves to an analysis of the new provisions of Book 3 regarding usufruct, ground lease and building lease that are relevant to commercial real estate transactions. From a practical point of view, we discuss the new rules and their (possible) consequences for real estate practice. In Parts 1 to 4, we explain the most important changes by means of concrete application cases. In Part 5, we consider the position of the mortgage creditor and in Part 6 we examine the possible tax impact in the area of registration duties.

As the Civil Code of 21 March 1804 was replaced by the New Civil Code pursuant to the Act of 13 April 2019, this contribution refers to the "old" Civil Code and the "old law" when it refers to the Civil Code of 1804 and the rules of property law that precede the entry into force of the Act of 4 February 2020. The terms "Civil Code" and "the new (property) law" refer to the new Civil Code and the provisions of Book 3.

It should be noted that this contribution has been written from the authors' personal reflections, which may evolve in the light of case law, legal doctrine and administrative commentary as well as future legislative amendments.