The Breyne Law was initiated by Minister Breyne who sought to more effectively protect prospective builders and buyers against the bankruptcy of certain property developers and contractors.
To achieve greater impact, the Breyne Law is mandatory, meaning it applies to all concerned parties and its provisions are compulsory for everyone. This law revolves around several key points.
A two-phase reception
The Breyne Law mandates that the acceptance of works occurs in two phases: provisional acceptance and final acceptance. This means that the buyer accepts all completed works. There must be a minimum one-year gap between these two phases.
A clear definition of responsibilities
According to the Breyne Law, hidden defects are the responsibility of the seller. The seller is also liable for serious defects for a period of ten years, even if these defects were noted during the final acceptance.
The payment method of the transaction
The total construction price and the service fees must be communicated in advance to the prospective builder or buyer. These amounts must be included in the contract. Payment is made in installments, and each installment cannot exceed the value of the work already completed.
If the developer requires a deposit at the time of signing the preliminary contract, it cannot exceed 5% of the total contract price.
What about the completion guarantee?
The completion guarantee is a clause in the contract that protects the buyer from the bankruptcy or insolvency of the contractor or property developer. The latter is required to obtain a bank guarantee that can amount to 100% of the contract value to cover these eventualities.
What if there are separate contracts for the construction of the house?
Sometimes, multiple trades are needed for the construction of a single home. The future owner can sign a contract with each contractor. It is the architect’s responsibility to coordinate the work of these artisans and contractors. The Breyne Law does not apply in cases of multiple contracts supervised by an architect.
