Must a property be renovated in an energy-efficient way when it is transferred?

Fréderic Stynen   |  

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In its struggle for more sustainability and with the implementation of the European “Green deal”, the Flemish Government introduced a renovation obligation for non-energy-efficient buildings from 1 January 2022. This new obligation, included in the Energy Decree and the accompanying Energy Decision, initially existed only for buildings not intended for occupation, among which offices, schools or commercial properties. Since 1 January 2023, this obligation has also been introduced for housing. Below is a discussion about these new rules’ potential impact on you.

When must you renovate?

The Energy Decision clearly states that the obligation to renovate the property is limited to transfers. Therefore, those not transferring their property will not face any new obligations.

Secondly, the new obligation to renovate will only apply if the authentic deed (in practice, a notarial deed) in which the transfer was recorded is passed after 1 January 2023. Therefore, anyone who had their purchase deed executed at the notary before this date will also not face a new obligation. Furthermore, it can be noted that landlords of a property, even for leases entered into after 1 January 2023, do not fall under the new obligation.

It is also important to know that the new obligation targets only property transfers in full ownership or the transfer and establishment of a building lease or leasehold right.

Whether the property is transferred in whole or in part in full ownership is irrelevant. For example, these new regulations will also impact the purchase of a co-owner. However, two exceptions to this were provided. For example, the co-owner who acquires the property in which they have and retain their main residence will not be subject to the renovation obligation. Also, if the property acquisition is carried out under the circumstances of divorce or termination of a (statutory) cohabitation, and insofar as one of the partners in this property has and retains their principal place of residence, there is no obligation to renovate.

Since only full-ownership transfers will be impacted, a bare property donation of a property after 1 January 2023 will not entail any obligation to renovate. On the other hand, anyone who receives a donated fully-owned property must check whether the property needs to be renovated.

Transfers that do not require a notarial deed, for example, in the case of inheritance, are not targeted by the new rules. Therefore, heirs are not impacted by the new obligation, even if they inherit the full ownership of a property.

Alongside traditional sales, the transfer of the property in full ownership through an exchange, contribution to a company or payment in kind is impacted by the regulations.

Who must renovate?

The new owner, landlord or leasehold owner, is subject to the renovation obligation. However, the notary will include this obligation in the authentic deed so the new owner is informed about it. If there are different owners, landlords or leaseholders, the obligation rests on each individual.

If an owner transfers or bequeaths a property which is already under an obligation to renovate, this obligation to renovate will be transferred to the new purchaser. In this way, heirs can also be obliged to pay an existing renovation obligation.

What obligations do you have, and on what date?

The Flemish Government provides for a graduated system for renovating properties that fall within the scope. Notably, from 2035 onwards, a distinction is made between apartments and other properties. This is because the energy saving of apartments will often require modification of the common areas. The individual owner does not decide to renovate these apartment areas, so these owners were given more time.

The date of the authentic deed determines how energy-efficient you must make the property:

  1. If the authentic deed is recorded after 1 January 2023, the new owner must renovate the property within five years to an energy efficiency EP-label D.
  2. If the authentic deed is recorded after 1 January 2028, the new owner must renovate the property within five years to an energy efficiency EP-label C.
  3. If the authentic deed is recorded after 1 January 2035, the new owner must renovate the property within five years to:
  4. energy efficiency EP-label B for single-family homes and collective residential buildings
  5. energy efficiency EP-label C for apartments
  6. If the authentic deed is recorded after 1 January 2040, the new owner must renovate the property within five years to:
  7. EP-label A for single-family homes and collective residential buildings
  8. EP-label B for apartments
  9. If the authentic deed is recorded after 1 January 2045, the new owner must renovate the property within five years to:
  10. EP-label A for single-family homes and collective residential buildings
  11. EP-label A for apartments

Owners must also have a new energy performance certificate within five years of the original deed.

What if you fail to comply with the renovation obligation?

If the renovation was not carried out within the prescribed five years, administrative fines of €500.00 to €200,000.00 might be imposed. The renovation obligation will also remain. To this end, you will be given a new deadline, during which you must still obtain the EP label.

Therefore, it is best to anticipate this obligation in good time. 

Our Bofidi experts are happy to help you further

Do you have any specific questions on this subject? Do you plan to transfer a property soon? Please do not hesitate to contact Fréderic. The team of Bofidi experts will be happy to help you.

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