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Real Estate Due Diligence in Belgium

Real Estate Due Diligence in Belgium

Activities such as buying, selling, lending or managing commercial real estate require real estate due diligence in Belgium

Before a real estate transaction in Belgium, can be completed, the seller supplies a number of documents, as well as relevant information to the buyer.

Alternatively, the buyer can investigate using public sources such as a notary, the cadaster, the mortgage office, or the public waste agency.

Real estate due diligence is performed before the acquisition of real estate, when the buyers decide that they require more information about the legal and commercial status of the real estate.

In most cases, the verification targets the ownership titles and other rights, such as mortgages, easements or encumbrances.

The rental status and validity of lease agreements, planning and zone situation, building permits, building contract and files are also investigated. In addition, environmental permits, soil pollution, insurance, waste, asbestos and other hazardous materials are also investigated.

Our real estate lawyers in Belgium assist clients who wish to receive a comprehensive evaluation of the property the intend to purchase.

Our team is able to provide legal counsel throughout all of the essential phases of the acquisition process, both to individuals and to corporate real estate investors.

We offer services to both corporations and individuals and we have a team of experienced lawyers who are able to assist property owners, tenants, and buyers, both local and foreign ones.

Read below to find out more about real estate due diligence in Belgium and why it is essential in most real estate transactions.

Real estate verifications in Belgium

In Belgium, there are two main points used to invest in real estatean asset deal, that involves the direct purchase of a property, and a share deal, which refers to acquiring shares in special purpose companies whose main assets are the underlying property. In addition, it is possible to perform a combination of the two, such as a direct sale of the right over a building alongside a sale of the shares of the entity owning the land.

The scope of the due diligence in case of a shared deal is broader, and it includes a financial, tax and corporate review of the company that transfers the shares.

Real estate due diligence in Belgium used in a commercial property transaction it also includes securing of a title insurance policy for the ownership of the property, as well as the encumbrances.

As many European countries demand more and more technical due diligence reports, Belgium has also increased interest in this aspect. Usually, the technical due diligent details the physical condition of a property, information that is requested by financial institutions, investors and owners in the decision process of buying or selling a property. 

Real estate verification checklist for Belgian properties

Real estate due diligence in Belgium is a multi-step procedure that focuses on the verification of several important documents in order to provide the buyer with a comprehensive image of the property’s status.

At its core, the verification process is intended to protect the buyer from a risky investment.

For individuals, this step can be crucial for allowing them to ensure that the property they wish to purchase is one that will suit their needs, and the needs of their family, without exposing themselves to making a significant investment in a home that can prove to be substantially flawed.

For commercial investors, real estate due diligence also plays a significant role in protecting them from making a risky investment, and potentially jeopardizing their portfolio.

Our lawyers in Belgium list the main issues that are verified during the real estate due diligence process:

  • Land registry search: our team performs a search on the immovable property, as it is available in the Belgian land register, with the registration offices and the mortgage depositories; we cross-check the information and ensure that data you receive about the property is correct;
  • Legal: we verify if the said property is or has been subject to litigation; we make sure that the owners are not involved in a lawsuit that would expose their assets, thus making impossible to sell the property;
  • Financial: we verify any tax issues related to the property, we check for the mortgage status, and we inform our clients on the main bills and utility contracts concluded for the property;
  • Building: this examination is performed with the help of expert advice from engineers and architects; it is useful to determine if the construction of the property is compliant with the electricity, environmental and other building condition currently in force in Belgium.

Please keep in mind that the list above is not an exhaustive one.

Each property transaction is different and our team of lawyers in Belgium is able to provide tailored services according to the type of property that is being purchased.

Property investments in Belgium 

Pension funds and the favorable tax treatment of European funds are among the institutional investments, and they play an important part in the Belgian real estate market.

When it comes to private investors, entities can close public real estate deals through public-private partnerships in order to help the modernization of the public infrastructure, as well for the improvement of public services.

Investors interested in opening a company in Belgium that focuses on the real-estate business are obligated to obtain permits and permissions for each of the projects they plan on developing, in order to ensure that they follow the environmental law, urban planning and other regulations.

The real estate market in Belgium

According to a report by ING Belgium on the evolution of the Belgian real estate market, property prices will rise by 5% in 2022 and 1% in 2023.

Our lawyers have also gathered other data offered by Statbel, the country’s statistical office, about the real estate market in 2022:

  • Prices in the Brussels-Capital region: 495,000 euros for attached and semi-detached houses; it is the most expensive region;
  • Prices in the Flemish region: 280,000 euros for attached and semi-detached houses; the second most expensive region in the country;
  • Prices in the Walloon region: prices are lowest here, with a median price of 169,000 euros for attached/semi-detached houses;
  • Median house price: the median price of an attached/semi-detached house amounts to 255,000 euros in Belgium.

Our team can give you more information about real estate transactions in Belgium, the required building permits, as well as the conditions for foreign investments in real estate.

Our Belgian law firm provides personalized consultancy for all types of businesses.

We also assist entrepreneurs who wish to register a trademark in Belgium.