As of May 1, 2023, all buildings, residential and non-residential must have a valid energy performance certificate (EPC) in all notarized transfers of full ownership.
This extension stems from the renovation obligation that has recently come into existence: based on the score on your EPC, it becomes clear whether or not a transferee of a building is required to renovate within five years. You can read more about this here. Thus, the EPC is essential to figure out whether or not the renovation requirement is in play.
When does the obligation to renovate apply?
Currently, an EPC is only required by law in the case of a sale or when establishing a long lease or building lease right. In practice, however, there are a number of practical problems and inconsistencies: in a number of cases, the law does not require an EPC to be presented, while the renovation obligation comes into play if there is a poor EPC score. One example is a gift: when making a gift of real estate in full ownership, the law does not require an EPC to be presented. On the other hand, one is obliged to renovate the building if there would be a bad EPC score. But how can you determine this, then, if there is no EPC required to be submitted?
Solution Flemish Government
To overcome these practical problems, the Flemish Government has taken the necessary measures. It has published in two separate decisions[1] provide that a natural person or legal entity transferring full ownership of a residential or non-residential building upon notarized transfer must have an energy performance certificate for residential buildings and non-residential buildings, respectively (depending on the type of property), as of May 1, 2023. The EPC obligation will also continue to apply when establishing a long lease or building lease right.
Here, a nonresidential building is defined as "A building with a non-residential principal use", but at the same time provides for a number of exceptions for which the EPC requirement is thus not applies, such as e.g. industrial buildings, agricultural buildings, workshops... If you are dealing with a property with a mixed use, then the total usable floor area occupied by each use is considered.
[1] the Decree of the Flemish Government of December 2, 2022 and in the Ministerial Decree of December 28, 2022
Does the renovation requirement apply in mergers and demergers?
For a number of transfers, this broad provision is a bit too strict given there is no obligation to renovate. The examples include mergers and demergers of companies In which underlying real estate is transferred or to the termination of an undivided property of a building: the new law requires at these circumstances That an EPC must be before it (which was not required before), even though belong these transfers under the exceptions cases of the renovation requirement. In the case of a poor EPC-score in these cases, in fact, there is no obligation to renovate.
Planned transfer?
Therefore, the legislation regarding mandatory certificates when transferring real estate is not getting any easier. If you are planning to transfer full ownership of a property, be sure to check the EPC guide (see here) that allows you to find out very quickly whether or not an EPC certificate should be available. If the EPC roadmap can't help you further, don't hesitate to contact your advisor for more info.
Are you planning a transfer in full ownership of your home or other building? If your deed is notarized as of May 1, 2023, you must be able to submit an EPC in all cases.
Do you have questions about the impact on your business?Don't hesitate to contact us here contact us with questions.
Wish to have a conversation about the right approach for your business?Then make an appointment with ourproexperts!
