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Extension of EPC requirement to any notarized transfer of freehold real estate

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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 eliminate these practical problems, the Flemish Government has taken the necessary measures. It has provided in two separate decrees[1] that, as of May 1, 2023, a natural person or legal entity who transfers full ownership of a residential or non-residential building by notarial transfer must have an energy performance certificate for residential buildings and non-residential buildings, respectively (depending on the type of property). The EPC obligation will also continue to apply when establishing a long lease or building lease right.

[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 some transfers, this broad provision is a bit too strict given that there is no renovation obligation. These include mergers and demergers of companies where underlying property is transferred or the termination of an undivided ownership of a building: in these cases, the new law requires an EPC to be submitted (which was not required before), even though these transfers fall under the exceptional cases of the renovation obligation. Indeed, in these cases, if the EPC score is poor, there is no obligation to renovate.


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. 

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