Renovation obligation in Flandres: an overview

Renovation obligation for non-residential buildings

Non-residential buildings were the first to be affected. From 1 January 2022, a non-residential building with a label F or worse will be subject to a double renovation obligation. Within five years of the transfer of full ownership or the establishment or transfer of a ground lease or building right, a minimum package of measures and a minimum energy label to be achieved will apply.

The measures focus on four elements that have a minimum requirement in terms of sustainability. These include roof insulation, glazing, heating, and cooling.

The mandatory minimum energy label to be achieved is E, which means that the building has a minimum share of renewable energy of 5%.

The legislator has given owners of small non-residential buildings, such as bakeries, bed and breakfasts or pharmacies, the option to choose a separate long-term trajectory to meet sustainability standards.

In any case, all non-residential buildings, regardless of any transfer, must achieve a minimum energy label from January 1, 2030.

Renovation obligation for residential buildings

On January 1, 2023, residential buildings also became subject to the renovation obligation.

The requirements for houses and apartments will be gradually tightened over the next few years. For transfers from 1 January 2023, houses with an E or F energy label must be renovated within five years to achieve at least a D label.

However, it is advisable to extend ongoing renovation works immediately to achieve the highest possible energy label. In fact, transfers after 2028 will be subject to the requirement to achieve label C within five years. And that's not all. It has been determined that the required energy label must improve every 5 years. A final term of 5 years starts on January 1, 2045, so transfers from this point onwards must be renovated to label A.

During this gradual introduction, the legislator has provided a slightly broader term for buyers of apartments. Renovation works towards sustainability often also concern common areas, which are decided upon by the association of co-owners. However, both houses and apartments must respect the final term towards label A from 2045 onwards.

Exceptions

The above requirements are imposed in the context of the transfer of a property, such as a sale or gift. It is important to note that it must be full ownership. Situations involving bare ownership or usufruct transfer are not targeted. Transfers on inheritance, divorce (marriage or civil partnership) or other divisions do not 'trigger' the 5-year period either.

For companies, a number of situations have also been excluded from the scope. Mergers, acquisitions, splits or partial splits do not trigger the obligation to renovate. On the other hand, the contribution of a branch of activity or a generality does.

Failure to comply with this renovation obligation can have severe consequences. For non-residential buildings, a fine ranging from 500 to 200,000 euros can be imposed. The maximum amount for houses has been reduced to 5,000 euros.

It is therefore important that potential buyers know whether or not the property is subject to a renovation obligation. This must be included in any advertising conducted for the transfer, as well as in the compromise and ultimately in the authentic deed itself.