Control of payments
Two rules, simple and strict.
No payment may be required or accepted before the agreement is concluded. That prohibition covers every form of payment, whatever its designation.
Where a deposit or earnest money is paid on conclusion of the contract, its amount may not exceed five per cent of the total price.
Subsequent payments follow progress. On execution of the notarial deed, the professional may claim a sum which, taking the deposit already paid into account, equals the price of the land or the share sold, increased by the cost of the works executed, the latter having to be approved by an architect authorised to practise in Belgium.
That last point is structural: the architect is not only the designer but also the one validating the progress that governs payment.
The guarantee regime
This is the most protective mechanism, and the one whose legality is now in question. It concerns the financial guarantee.
The act requires the professional to provide a guarantee covering the risk of their insolvency. Its form and extent differ according to whether they are approved.
| Situation of the professional | Guarantee required |
|---|---|
| Approved contractor | security equal to five per cent of the building price |
| Non-approved contractor or developer | completion guarantee covering the whole |
The security is lodged with the public body competent for deposits and consignments, placing it beyond the reach of the professional's creditors.
The gap between the two regimes is considerable, and that is precisely what raises a problem under European law.
Why this regime is contested
A decisive current point for anyone concluding today. It concerns a recent European ruling.
The Court of Justice of the European Union has held this regime contrary to European rules on the freedom to provide services. A reform of the scheme is therefore expected.
The reasoning is as follows: only contractors can be approved. A foreign developer, carrying on no construction activity, therefore cannot access the more favourable guarantee regime and is in practice compelled to work with an approved Belgian contractor.
Belgium was unable to show that the distinction was justified by overriding reasons in the general interest, nor that it was necessary or proportionate.
The consequence is direct: the current guarantee regime is contrary to European law, and reform is expected. This is followed in the article on developments to monitor.
Price revision
A third mechanism, less well known yet important for budget predictability. It concerns price revision.
The contract must distinguish, within the total price, the part relating to the building from that relating to the land. That distinction governs how the revision is calculated.
The building price is subject to revision only within a limit and on defined bases: movements in wages and related social charges, and movements in the price of materials or products used or incorporated.
Part of the price therefore necessarily remains non-revisable, which limits the purchaser's exposure to market conditions.
The general revision mechanism and the indices used are covered in the guide on measurement and specification. The formulas are set out there.
What this means for a professional
Four rules.
Check the professional's approval before concluding, since it determines the applicable guarantee regime and thus the real level of protection.
Verify that the deposit respects the cap, an excess being a breach of a mandatory statute.
Check that the contract distinguishes land price from building price, without which revision becomes indeterminable.
Follow the evolution of the guarantee regime before concluding, reform being likely and its content as yet unknown.
This article reflects the position of the rules at the date of checking and serves professional orientation. It does not constitute legal advice and does not replace assessment of the individual case.