In January, we hosted a webinar addressing the key innovations proposed under Book 7 with respect to sale, lease and construction agreements relating to immovable property. This article reflects the presentation on sale agreements relating to immovable property and sets out the most relevant changes introduced by the draft legislation.
1. Definition and qualification
2. Validity requirements
Under the former Civil Code, the seller of an immovable property could seek annulment of the sale if the price resulted in a loss (benadeling / lésion) exceeding seven twelfths. Book 7 replaces this complex rule with a simpler and more transparent threshold.
Under the new regime, annulment may be sought where the seller suffers a loss exceeding 60%. In addition, the action for annulment must be brought within two years from the date of the sale. Once this period has expired, the sale can no longer be challenged on the basis of loss (benadeling / lésion).
3. Transfer of ownership and risk
Book 7 confirms the principle that ownership of a good, including an immovable property, is transferred solo consensu, i.e. upon the mere conclusion of the sale agreement.
However, a significant change concerns the transfer of risk. Under the draft legislation, the risk of loss or damage to the good is no longer transferred at the time ownership passes, but at the time of delivery. As a result, in case the good is destroyed by force majeure before delivery and before payment of the purchase price, the buyer can no longer demand delivery, but is released from its obligation to pay the price.
4. Seller’s indemnification obligation
Just as under current law, Book 7 also requires the seller to compensate the buyer for damages resulting from both the seller’s own actions and those of a third party with respect to the property sold.
Book 7 confirms that the seller's indemnification obligation against his own acts applies to any disruption to the use or enjoyment of the property due to the seller, including legal claims brought by the seller, this regardless of whether such disruption or claim arose before or after the sale.
The seller's indemnification obligation against acts of a third party only applies in case of legal claims brought by a third party relating to the property dating from before the transfer of ownership. The seller is not liable for mere factual disruptions caused by third parties, such as works carried out by neighbouring property owners. Nor is the seller required to indemnify the buyer for legal claims that were expressly disclosed prior to the sale. Indeed, in such case, the buyer is deemed to have accepted the associated risk.
5. Seller’s obligation to deliver the good in accordance with the sales agreement
One of the most notable changes introduced by Book 7 is the integration of the obligation to deliver and the hidden defects regime into a single obligation: the obligation to deliver a good that is in conformity with the sales agreement.
This obligation extends not only to the good itself but also to its accessories.
Should you have any questions or wish to discuss how these changes may impact your transactions, please contact one of our lawyers below.
