New decree on disposal of immovable public assets and the establishment and disposal of rights in rem

Legal update on Flemish public real estate transactions 

Since June 1, 2024, every Flemish public institution must comply with new rules when disposing of its real estate assets, and when establishing or disposing of rights in rem. 

The new rules do not only apply to the Flemish Community or the Flemish Region, but also to other government agencies within the Flemish government. This mainly concerns the internal autonomous agencies with legal personality, the external autonomous agencies of public law, and the external autonomous agencies of private law, with the exception of the Flemish investment companies. 

The relevant Decree of 8 March 2024 contains the following guidelines. 

Transparency and competition 

When disposing of real estate assets, and establishing and disposing of rights in rem, the aforementioned Flemish public institutions must respect the principles of competition and transparency. 

These principles were developed in the European and Belgian case-law on the principles of equality and transparency in awarding of public contracts. They imply taking appropriate and proportionate publicity measures, taking into account the value, condition and location of the asset, as well as the market situation. 

The Decree of 8 March 2024 does not impose a mandatory procedural framework, so that the Flemish public institutions keep a degree of freedom in this regard. 

Powers of the Flemish Government and parliamentary authorization 

With respect to real estate owned by the Flemish Community or the Flemish Region, the Flemish Government is in principle competent. Only for the disposal of real estate assets with an estimated value exceeding 10 million euros, an authorization by the Flemish Parliament (in the form a decree) is required. 

Exempt transactions 

Only in the following cases can a directly negotiated transaction be concluded for the disposal of immovable public assets, and the establishments and disposals of rights in rem: 

1. The estimated value of the real estate (or the value over the entire term of the right in rem) is less than 37,500 euros; 
2. The transaction takes place to achieve an objective of public interest; or 
3. It can be reasonably assumed that a public transaction would seriously damage the economic and financial interests of the Flemish public authorities. 

To assess how these exceptions (will) be evaluated, future case-law will have to be awaited. However, it can be concluded that these exceptions provide the necessary margin to still fall outside the scope of the Decree.