Mandatory renovation on sale of commercial real estate for new owners like office buildings, retail & leisure buildings in the Flanders Region.
The Flemish government decided that from 2022, after the sale of a non-residential building, the new owner will have to renovate the building within five years.
The Energy Decree provides a negative listing and states that all buildings are non-residential buildings, except:
- Residential buildings;
- Industrial properties for production or storage;
- Non-industrial storage;
- Agricultural buildings;
- Buildings used for religious activities;
- Temporary buildings;
- Stand-alone non-residential buildings smaller than 50m2;
Therefore the mandatory renovation mainly concerns office buildings, commercial spaces and leisure properties.
Mandatory renovations includes the installation of roof insulation (R-value: 0.75 m² K/W) and high-efficiency glazing (U-value 1 W/m² K) and replacement of heating older than fifteen years. If there is a gasline in the street, one is not allowed to install a new fuel oil boiler. Replacement of air-conditioning older than fifteen years and use refrigerants without ozone depleting substances or other harmful refrigerants (GWP value at least 2,500).
Starting 2022 a new owner of a residential building smaller than 500 m² will have to achieve an energy label C or better within the five years following the acquisition.
As of 2023. within five years after the acquisition, large non-residential buildings must also have a minimum renewable energy share of 5 percent.
On top of that, small non-residential units that have an energy performance certificate with label D, E or F at the time of purchase and that together form a non-residential building and are transferred in totality must achieve at least an energy performance label C as of 2022.
From 2023 large non-residential buildings must also have a minimum renewable energy share of 5% within five years of the acquisition. From 2023 an EPC for large non-residential buildings will be introduced, which will be compulsory for sales and rentals. From January 1, 2025, every large non-residential building will be required to have such an EPC, even if the building is not sold or rented out.
In co-ownerships consisting of both residential and non-residential entities, the works will be limited to the level of the non-residential unit.
In addition to the renovation obligation, non-residential buildings can also receive financial support.
The following exceptions apply:
- Non-residential buildings that are protected or appear on the inventory of architectural heritage can benefit from a partial exemption on these renovation obligations.
- Full exemption for non-residential buildings that are demolished within five years of purchase or establishment of the building or leasehold right.
- The new rules will also not apply in the event of a merger or absorption of a legal entity.
A substantial administrative fine may be imposed on new owners who fail to comply within the five years.
Consult our article in Dutch for detailed information.