The Breyne Act under European fire: what does the judgment of 26 February 2026 mean for you?
On 26 February 2026, the Court of Justice of the European Union ruled in case C824/24 that the Belgian guarantee scheme for off-plan properties violates the European freedom to provide services. What does this mean, what nuances are there, and do you need to take action right now?
Breyne Act In A Nutshell
The Breyne Act protects buyers of homes that have yet to be built. One of the core mechanisms is the financial guarantee that the contractor or promoter must provide as security for the completion of the building. Today there is a divide here:
- Recognised contractors suffice with a guarantee of 5% of the construction price.
- Non-approved contractors or property developers are required to provide a completion guarantee of 100% of the construction price.
The European objection
The European Commission initiated proceedings against the Kingdom of Belgium, stating that the distinction between recognised and non-recognised contractors constitutes a structural obstacle for foreign contractors and project developers who want to operate on the Belgian market. Specifically, the Court pointed to two sticking points:
- A foreign project developer who wants to benefit from the favourable 5% guarantee through a structure with a Belgian approved contractor must have a secondary establishment in Belgium. The Court considers that too far-reaching.
- In principle, a foreign contractor can also benefit from the 5% ruling himself, provided that he demonstrates that his recognition in his own Member State is equivalent to a Belgian recognition. However, this entails a significant administrative and evidential burden, which the Court considers disproportionate.
It is important to emphasise that a foreign contractor can, in principle, obtain recognition as a contractor in Belgium under the same conditions as Belgian companies. The threshold is therefore not fundamentally different — it also exists for Belgian contractors who wish to benefit from the less onerous guarantee scheme.
What does constitute an additional burden for foreign contractors is the practical aspect of the recognition procedure.
What does the Court decide?
The Court ruled that the 100% guarantee obligation constitutes a restriction on the freedom to provide services and that Belgium has violated the Services Directive. Two observations are decisive in this regard:
- Belgium has not demonstrated the existence of a real, present and sufficiently serious threat affecting a fundamental social interest to justify the measure.
- The regulation is not coherent: In the event of bankruptcy of a contractor, the buyer is less well protected if the contractor is approved (only 5% guarantee) than if he is not approved (100% completion or refund guarantee). This is at odds with the purpose of recognition, which is precisely intended to offer consumers more certainty.
Do you need to take action right now?
No, you do not. The Court of Justice did not annul the Breyne Act. The current guarantee scheme will continue to apply in full for the time being. There is no legal vacuum, and as a buyer, contractor or project developer, you do not need to take immediate steps at this time.
What now follows is a legislative initiative by the Belgian legislator to remedy the infringement that has been identified. That initiative was already on the agenda: the modernization of the Breyne Act was already included in the coalition agreement. The judgment now gives this process an extra legal and political momentum.
The most obvious solution is to equalize the guarantee obligation for recognized and non-recognized contractors, presumably to the 5% model.
What are the broader implications?
This ruling is part of a broader European trend to remove barriers to cross-border provision of services in the construction sector — previously this led to the abolition of the registration requirement for contractors and of establishment conditions based on professional qualifications.
This is equally relevant for the practice of project structuring. The existing distinction has led to alternative constructions, such as the contractor acting as seller-superficies. A reform of the Breyne Act could make such structures superfluous or even more interesting — reason enough to monitor developments closely.
Our advice
We actively follow up on legislative initiatives. For foreign contractors and project developers who are already thinking about cross-border projects or are considering Belgian approval, it makes sense to map out the administrative requirements and the translation obligation of the approval files in advance.
Do you have questions about the impact of this judgment on your situation or your ongoing projects? The specialists at Van Havermaet will be happy to assist you.