What are the most important areas of public law for an investor to consider when purchasing real estate?
Relevant areas of public law are:
Town planning (zoning), construction and environmental laws may all apply. The buyer should also consider the level of compliance with workplace health and safety legislation requirements. Proper due diligence by a buyer should cover these particular areas of concern.
The buyer should undertake a full investigation of the site's town planning and land use history, and in particular whether developments on a site have been authorized and have been constructed in accordance with all required permits and approvals.
Planning and zoning regulations must be verified. These vary depending on the property’s location. The Flemish, Walloon and Brussels Capital regions have each adopted their own regional zoning regulations. These provide the framework for local/municipal regulations.
Similar regional variations apply to environmental rules (eg each of the three Regions has its own regulatory framework governing the energy performance of buildings)
In the Flemish region, where environmental rules are most developed, all real estate sales generally have to be accompanied by an ‘orientating’ soil survey when certain hazardous activities have been, or are being, carried out. If contamination is found in this orientating survey, a more detailed ‘descriptive’ soil survey must be conducted and this may identify a clean-up obligation.
On 1 March 2018, the Walloon Parliament adopted a Soil Decree which came into force on 1 January 2019. No specific obligation applies in case of asset purchases except the obligation for the seller to provide the purchaser with a soil attestation. The asset purchases themselves do not trigger any other specific obligation than providing the purchaser with said soil attestation.
On 13 May 2004, the Brussels Capital region also adopted a Soil Clean-Up Act. This Act was updated on 5 March 2009, and the update came into force on 1 January 2010; it was further updated pursuant to a decree dated 23 June 2017 which came into force on 23 July 2017. A preliminary soil investigation must be carried out before the transfer of rights to real estate where hazardous activities are being, or will be, carried out. This is also required before commencing or terminating hazardous activities. The person transferring the real estate must bear the cost.
As a result of EC Directive 2002/91 regarding the energy performance of buildings, each of the regions have adopted legislation to increase the energy efficiency of several different types of building. This Directive has been replaced by the Recast Directive (Directive 2010/31/EU of the European Parliament and of the Council of 19 May 2010 on the energy performance of buildings). Among other things the new directive contains stricter building standards. The Recast Directive was amended to some extent by the Energy Efficiency Directive (Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency). The legislation in the regions is being amended in order to comply with this new legislation.
On 22 December 2006 the Flemish region adopted an Energy Performance Decree for buildings. This decree gives the Flemish Government the power to make lists of mandatory energy performance criteria, both for existing and for new buildings, and different lists can be created for different types of building. Furthermore, the decree gives the government the power to introduce mandatory ‘energy performance certificates’. These certificates contain ‘reference values’ for comparing the energy performance of similar buildings and advice on how to increase the energy efficiency of the building in a cost-efficient way. The Flemish Government has made these energy performance certificates mandatory when non-residential, residential and public buildings are sold or rented.
The decree mentioned above, was replaced on 1 January 2011, by the ‘Energy Decree’ of 8 May 2009, which is a very general decree, also containing a chapter entitled ‘Energy performance of buildings’. The principles, explained above, still apply. The Energy Decree was further updated pursuant to a decree dated 24 February 2017 which came into force on 1 April 2017.
The Executory Decree of 19 November 2010 also contains regulations concerning energy performance. Its main purpose is to indicate how energy performance is to be calculated and to indicate the energy performance requirements and the requirements for the interior climate of buildings.
This Executory Decree was amended by the Alteration Decree of 28 September 2012 following European Directive 2010/31/EU. As from 1 January 2014, this Decree requires that newly built buildings for housing, school or office purposes, must generate a certain amount of energy out of renewable energy resources.
On 1 May 2015, the Decree of 28 November 2013 concerning the energy performance of buildings and its Executory Decree of 15 May 2014, came into force.
This Decree and Executory Decree:
On 7 June 2007 the Brussels Capital region adopted its Energy Performance Decree for buildings. The partial amendment of the decree made on 14 May 2009 came into force on 6 June 2009. This decree gives the Brussels Government the power to specify energy performance criteria for new buildings and buildings being renovated, and the power to introduce energy performance certificates. On 19 June 2008 the Brussels Government adopted an Executory Decree specifying that new and renovated buildings used for housing, offices, services and education require an energy performance certificate, with similar content to the Flemish certificates. On 27 May 2010 the Brussels government adopted an Executory Decree specifying the requirement for an energy performance certificate for public buildings. On 17 February 2011 the Brussels government adopted an Executory Decree specifying the requirement for an energy performance certificate for non-residential buildings and an Executory Decree specifying the requirement for an energy performance certificate for residential buildings.
All these Decrees were abrogated by the Decree of 2 May 2013 enacting the Brussels Code of Air, Climate and Energy Control. Books I, III and IV of this Decree, providing for the general principles and specific provisions on air and climate came into force on 31 May 2013. Book II came into force in full on 1 January 2015 (although some articles of this Book came into force on 5 February 2014).
When purchasing real estate, a potential investor should consider the following:
The following areas of public law should be considered by a real estate investor, as applicable:
Town planning (zoning), construction and environmental laws may all apply. The buyer should also consider the level of compliance with workplace health and safety legislation requirements. Proper due diligence by a buyer should cover these particular areas of concern.
As part of its due diligence, the buyer will wish to request a municipal comfort letter confirming that the property is being used in compliance with any issued permits and that the property is not subject to any notices of violation or unpaid orders issued by any such authority.
Buyers considering purchasing properties in suburban areas should ensure that the land on which the property is located is not collective land. Collective land refers to land owned by rural collective economic organizations, which are generally committees of local villagers. The management and development of collective land is tightly regulated under PRC law. Generally, collective land may only be used for the establishment of rural or township enterprises or, subject to the approval of government authorities, for the construction of residential housing or public facilities. In order to develop collective land for profit seeking enterprises, such as real estate development, the land must first be converted into state-owned land. Moreover, the sale of properties on collective land is illegal without further state approval.
Planning, construction and environmental laws may all apply. Buyers should also consider fire safety regulations and health and safety rules.
Before buying a property, buyers should check the following points:
An investor should consider the zoning permits, construction permits and operation permits.
In particular, the following issues should be verified by the buyer:
An investor should always investigate the planning regulations. Planning regulations for land in Denmark comprise a Planning Act and municipal- and local plans.
The consolidated Planning Act, dated 1 July 2020, deals with the hierarchy of the planning system, in line with which local authorities address regional and municipal issues, and prepare municipal plans and more specific local plans for each area. Local plans must comply with municipal plans. All plans must ultimately comply with the Planning Act.
As a general rule, a local plan will cover a small area of an area within the municipality. Among other things, the local plan will include:
An investor should also check whether any contamination has been registered on the property under the Contaminated Soil Act, dated 27 March 2017.
Private ownership of real estate is subject to land use rules and other limitations, such as the protection of archaeological sites, or mandatory expropriation for reasons of public interest (expropriation pour cause d’utilité publique). Ownership rights can also be restricted by easements for public use (servitude d’utilité publique), which are incorporated into planning documents such as the local land use plan.
Public authorities also have pre-emption rights, allowing municipalities to purchase property to facilitate projects that are in the public interest (for example, the creation of communal facilities) (droit de préemption urbain).
A buyer should also verify that the property is not part of the public domain (domaine public). Public authorities hold both public domain (including property and fixtures that are either identified as belonging to the public domain or used for the performance of a public service) and private domain assets. Authorizations to occupy a public domain property normally take the form of a temporary occupancy agreement between the public authority and a private contractor. These authorizations are subject to the French General Code of Public Property (Code général de la propriété des personnes publiques).
An authorization for temporary occupation of the public domain usually grants the private developer some of the privileges typically associated with legal ownership, such as the right to dispose of (subject to prior approval by the public authority), or create a security interest over, a building or structure on the public domain, even though the legal ownership of the land remains with the public authority.
The public body granting a temporary occupancy authorization is not obliged to renew it upon expiry. If an authorization is not renewed, the French General Code of Public Property does not provide for any right to compensation.
More generally, an investor should also have a clear understanding of the commercial lease regime as set out in the French Commercial Code which has been deeply modified following the law n°2014-626 (Pinel law) dated 18 June 2014.
These past years American and English compliance rules are increasingly being incorporated into French real estate acquisition practice. The latter integrates more and more in the performance of the obligations of the parties some of the provisions of the United States Foreign Corrupt Practices Act 1977 and the UK Bribery Act of 2010 concerning anti-corruption, sanctions and anti-money laundering compliance – which French equivalent legal provisions would be the law “Loi no 2016-1691 du 9 décembre 2016 relative à la transparence, à la lutte contre la corruption et à la modernisation de la vie économique” (often referred to as loi Sapin II).
An investor should always verify that the building complies with the relevant building permits and the zoning and building laws. Usually the building permit will be sufficient to confirm that the building complies with zoning law but sometimes it is also helpful to check the zoning plan. This allows the investor to verify whether the proposed use of the premises is permitted.
Any change in use will require a revised permit.
New public law restrictions on rent increases for residential properties cap rental increase on entering into a new lease contract at 10% above the local reference rent in areas subject to housing market pressures, subject to certain exceptions for new or extensively modernized buildings. New restrictions also limit the sale of residential condominium properties to tenants within a certain time after the conversion of rental space. Additionally, the possibility to increase the rent during the lease is limited by public law restrictions.
For residential properties, depending on the location of the building, housing control measures taken by the municipality or the federal state are also relevant. In social-protected areas (soziales Schutzgebiet), the demolition and change of use of apartments is subject to approval. Furthermore, in certain states such as Bavaria, Baden-Württemberg, Berlin or Hamburg, statutory bans on misappropriation (gesetzliche Zweckentfremdungsverbote), laws against vacancies (Gesetze gegen Leerstand) or approval requirements for the conversion of living space into vacation apartments (Genehmigungspflichten für die Umwandlung von Wohnraum in Ferienwohnungen) exist.
Town planning (zoning), construction and environmental laws may apply and should be investigated with the assistance of lawyers. As part of its due diligence, a purchaser should confirm that the property is being used in compliance with the use authorized by the occupation permit issued by the Buildings Department and that the property is not subject to any notices of violation issued by any authority.
The buyer should investigate the following:
An investor must consider the planning (zoning) and environmental aspects of any property transaction.
The following public law aspects are relevant to the acquisition of real estate:
Depending on the use of the property, buyers may also need to consider energy efficiency regulations, employment law and health and safety rules.
Part of the buyer's investigation will cover the site's planning history and, in particular, whether the buildings have been duly authorised and the current use of the property is permitted by law. There are also statutory regulations relating to building works, and buyers should verify that the property complies with these.
The following matters should be verified by the buyer:
The general master plan (Piano Regolatore Generale) and the related implementation rules (Norme Tecniche di Attuazione, NTA) show the permitted use of the area in which the property is located.
The buyer should ensure that the structure of the property complies with the original building permits (in particular the designs and plans attached to the permits) and that any building work has been carried out with the necessary prior authorisations (building permits and declarations of commencement of works). The seller shall declare the compliance of the de facto state of the property with the cadastral data and maps filed with the Cadastral Register.
Certain properties require a fit for use certificate (certificato di agibilità) confirming that specific health, safety, and hygiene requirements have been met. In this respect, within 15 days from the notice of completion of construction/renovation works, the certified declaration of fit-for use (segnalazione certificata di agibilità) attesting the existence of such health, safety and hygiene requirements shall be summitted to the competent Municipality along with all designs, structural and cadastral documentation pertaining to the property. The Municipality has 30 days to check the documentation and request any clarification/supplement of documentation.
The performance of certain activities (for example offices with more than a specific number of employees, parking spaces covering more than a specified area, storage and archive buildings, heating plants and buildings in which particular activities are carried out) is subject to fire prevention regulations.
Project plans regarding certain types of facilities and activities must be preliminarily approved by the Fire Brigade.
In addition to that, the holder of any activity subject to the fire prevention discipline must file with the competent fire brigade a self-declaration attesting that all works have been carried out according to the project plan. Once this declaration is submitted, the structure can be used lawfully.
The fire brigade may carry out random inspections within 60 days to verify the compliance of the activity with the fire prevention regulations. Please note that regarding the sole activities classified under category C the fire brigade must perform an inspection within 60 days from the filing of the self-declaration and in case of positive outcome a fire prevention certificate is issued.
A potential buyer should therefore ascertain whether a property is subject to fire prevention rules and whether a declaration has been submitted.
There are, among others, two public laws an investor should consider when purchasing real estate: the City Planning Act and the Building Standards Act.
The City Planning Act defines ‘Urbanization Promotion Areas’ as areas where development is actively promoted and ‘Urbanization Restricted Areas’ as areas where development is restricted. Generally, construction of residential, office and retail property is not permitted in Urbanization Restricted Areas. This act also defines the types of ‘Zoning Districts’ which are classifications of Urbanization Promotion Areas.
The Building Standards Act stipulates the types of properties and structures permitted in each Zoning District, as specified by the City Planning Act.
The key areas of public law are property law, building code/standards, resource management law, overseas investment law and tax law. These are mostly contained in the following acts:
A brief description of these acts is contained in the Legislation Affecting Real Estate Sales tab and an explanation of the relevant tax law can be found in the Taxation of Real Estate Sales and Purchase tab.
The Land Use Act, Companies and Allied Matters Act, Nigerian Investment Promotion Act 1995 and Tax legislations are Federal statutes applicable uniformly. The other legislations are enactments of the respective States, but with similarities in most of the states.
Buyers should consider the following issues:
The most relevant public legislation is:
Relevant areas of public law are:
Investors should consider the following aspects:
Potential investors in Slovakian real estate should ensure they investigate the following:
Buyers should check the following:
The following areas should be investigated by a buyer:
The important areas of public laws for an investor to consider when purchasing the land or real estate are the relevant Town Planning, Building Control Act and relevant environmental legislation. Additionally, an investor should verify that the land or real estate is not state property.
An investor should also satisfy itself:
Planning, construction and environmental laws may all apply. Buyers should obtain assurances that the statutory approvals relating to the initial construction were obtained.
Depending on the use of the property, further statutory regulations may apply, for example, fire safety and other health and safety regulations.
The potential retrospective nature of UAE law is a feature that investors should bear in mind when considering an investment in Abu Dhabi real estate.
Planning, zoning and construction laws may all be relevant and a buyer of a building under construction or already completed should carry out due diligence to ensure that all the relevant statutory approvals have been obtained.
Depending on the use of the property, certain health and safety rules and regulations will apply.
lanning, construction and environmental laws may all apply. The Building Safety Act 2022 and ancillary regulations are now in force, increasing the regulation around building and fire safety and potentially exposing investors and developers alike to substantial criminal, financial and reputational consequences. Depending on the use of the property, buyers may also need to consider energy efficiency regulations, employment law and health and safety rules.
Part of the buyer's investigation will cover the site's planning history and, in particular, whether the buildings have been duly authorised and the current use of the property is permitted by law. There are also statutory regulations relating to building works, and buyers should verify that the property complies with these.
As part of the buyer's pre-contractual due diligence they will normally require the seller's lawyers to produce local authority searches and a planning/zoning history for the property. This will include confirmation that:
In addition, depending on the use of the property, it may also be necessary to confirm compliance with further statutory regulations, for example compliance with fire safety requirements and other health and safety issues. It is the responsibility of the buyer to seek verification of these issues before the conclusion of the contract.
The following matters should be verified by the investor:
Acquisition of real estate forming a single integral property complex may require anti-monopoly clearance (in a form of consent of the Anti-Monopoly Committee of Ukraine)
Zoning, construction and environmental laws may all apply and should be investigated with the assistance of counsel. As part of its due diligence, the buyer will wish to confirm that the property is being used in compliance with any certificate of occupancy issued by the applicable local governmental authority and that the property is not subject to any notices of violation issued by any such authority.
