1. What is a preferential right?
A preferential right grants the tenant the right, when the landlord wishes to sell its property, to be offered the property first and to negotiate the terms of a potential purchase.
The preferential right differs from a pre-emption right, wherein the owner has already entered into a sales agreement with a third party, but where the beneficiary of the pre-emption right has the opportunity to purchase the property first at the price and conditions stated in the existing sales agreement, without room for negotiation.
2. Who is eligible and what are the conditions?
The beneficiaries of the preferential right are the tenant, their spouse or statutory cohabiting partner, and their (adopted) children, provided that the beneficiary maintains their main residence at the property.
Only nine-year lease agreements are eligible for the preferential right. Short-term lease agreements are excluded, unless the short-term lease is extended to nine years, for example, if the tenant continues to occupy the property after the expiration of the short-term lease without objection from the landlord.
As soon as the landlord wishes to sell their property, they must inform the tenant of this via a registered letter with confirmation of receipt, inform them of their preferential right, and communicate the essential conditions of the sale, such as the price of the property.
The tenant then has 30 days to notify the landlord, via a registered letter with confirmation of receipt, whether they wish to accept the offer (resulting in the sale) or reject it. If the tenant does not respond within that period, they are deemed to have waived the offer.
If the landlord re-offers the property at a lower price or under other more favorable conditions, they are obliged to inform the tenant again of the new conditions. The tenant then has 7 days to accept or decline the new offer.
The Ordinance establishes strict deadlines for the tenant to exercise the preferential right. Therefore, notifications are only valid if made by registered letter with confirmation of receipt. If the notification is made in any other way, it is void.
If the landlord enters into a sales agreement with a third party without informing the tenant, that sales agreement is conditional on the tenant not exercising their preferential right.
In addition, the real estate agent and the notary also have a duty to ensure compliance with the preferential right. If the landlord has failed to inform the tenant, the notary must, if necessary, temporarily suspend the sale to inform the tenant.
The preferential right also applies to public auctions.
The preferential right does not apply in the following cases, among others:
- the sale of the property to a partner, blood relatives or in-laws;
- when the tenant is a co-owner of the property;
- the sale of a right in rem (bare ownership, usufruct, building right, …);
- when the property has been declared uninhabitable;
- when the property is one of multiple units with different tenants, and the entire building is sold.
If the landlord sells their property without respecting the tenant’s preferential right, the tenant can initiate a legal procedure to step into the rights and responsibilities of the buyer. The tenant has one year from the registration of the sale in the mortgage registers to do so. This results in the tenant reimbursing the buyer for the purchase price and notary costs. The buyer can reclaim the paid registration duties from the tax administration.