Tenant Preemption Rights in Brussels: New Rules and Their Impact on Real Estate

The Brussels government has introduced a groundbreaking measure granting tenants the right of first refusal when purchasing the property they currently rent. This initiative aims to make homeownership more accessible to tenants but also carries implications for landlords and the broader real estate market.

Who Qualifies for Tenant Preemption Rights?

This new right is subject to specific conditions:

1. Type of property: The property must be unfurnished.
2. Lease agreement: The rental agreement must be a long-term lease intended as the tenant’s primary residence.
3. Domicile: The tenant must be officially domiciled at the property.

Exceptions include sales related to corporate mergers, the transfer of bare ownership or usufruct rights, or life annuity agreements. These exclusions aim to preserve certain legal and financial arrangements from being disrupted by the new rules.

How Do Tenant Preemption Rights Work?

When a landlord decides to sell a property, they must notify the tenant first through a registered letter with acknowledgment of receipt. The tenant then has 30 days to respond to the offer.

• No response or refusal: If the tenant declines the offer or fails to respond, the landlord can freely sell the property to another buyer.
• Sale under better terms: Should the property later be offered at a lower price or under more favorable terms, the tenant must be informed again. In this scenario, the tenant has six days to exercise their preemption right.
• Non-compliance: If the landlord bypasses the preemption right, the tenant has up to one year to challenge the sale in court and purchase the property.

Impact on the Real Estate Market

This preemption right has significant implications for various stakeholders:

1. For tenants: It offers a rare opportunity to transition from renting to owning without competing with other buyers. This can help close the gap between tenants and homeowners in a region where property ownership is increasingly out of reach.
2. For landlords: Sellers face additional administrative obligations and potential delays in their sale process, which could deter some landlords from renting out properties in the first place.
3. For the market: While the measure may stabilize prices in the lower and mid-range rental sectors, it could also discourage property investment if landlords perceive it as overly restrictive.

Conclusion

The introduction of tenant preemption rights in Brussels represents a step toward greater social equity in the real estate market. While it empowers tenants with a unique path to homeownership, landlords will need to navigate new administrative and legal complexities. Despite these challenges, this measure could make the Brussels property market more inclusive and balanced.