Breyne Law security deposit: 5% blocked at the notary, instructions

The security deposit is arguably the best-known — and the most misunderstood — financial mechanism of the Breyne Law. Many buyers confuse it with the completion guarantee (Article 12), with a simple end-of-build retention, or even with the post-reception ten-year liability. The three are distinct, and the security deposit protects a very specific risk.

Concretely: it is a sum blocked for one year, used to compensate the buyer if the contractor does not lift the reservations raised during provisional reception. Without it, you would be forced to pay another craftsman out of your own pocket to make corrections, then sue to recover.

Here is how it works in practice, how much it represents, who releases the funds, and above all — what to do if your developer omits to provide the certificate.

1. What is the Breyne Law security deposit?

The Breyne Law security deposit is a mandatory financial guarantee imposed on any contractor or developer building or selling a new-build home in Belgium under the regime of the Act of 9 July 1971 published in the Belgian Official Gazette (JustEL). Its legal basis is Article 12 of the law.

Its purpose: to create a financial safety net during the period separating provisional reception (material completion of works) from final reception (one year later, in accordance with Article 9). During this year, if the contractor is slow to lift the reservations noted in the minutes, the buyer can draw on the security deposit to bring in a third party at their expense.

“The builder cannot demand payment, in whole or in part, of the price of the home before completion, except on condition of having previously delivered to the acquirer the security deposit provided for in Article 12.”

Article 12, Act of 9 July 1971

It is important to clearly distinguish the security deposit from the other guarantee provided by the same Breyne Law: the completion guarantee. The latter covers the risk that the contractor files for bankruptcy DURING the works (before delivery). The security deposit intervenes AFTER delivery, during the first year. See our completion guarantee cluster for the complete distinction.

The security deposit obligation applies to any builder or seller-developer entering into a contract governed by the Breyne Law — whether a turnkey construction contractor, a developer selling off-plan, or a seller of a property whose works are not yet completed. It thus targets both large property development companies and small independent contractors. By contrast, the law does not apply to pure renovation works on an existing property (except if the renovation cost exceeds the price of the land and the property is considered new for VAT purposes). If you call upon a contractor only for transformations, the Breyne Law — and therefore the security deposit — does not apply.

2. How much: 5% of the excl. VAT price — costed example

The legal amount of the security deposit is 5% of the sale price excluding VAT. Not 5% of the incl. VAT price, not 5% of estimated works cost — but 5% of the sale price agreed in the contract, calculated without VAT.

To illustrate with a second case: an apartment bought at €250,000 excl. VAT generates a security deposit of €12,500 (5% of €250,000). If the buyer benefits from the reduced VAT rate of 6% (modest home, first primary residence under conditions), the incl. VAT price will be €265,000 — but the security deposit base remains €250,000 excl. VAT. For the same property subject to the standard 21% rate (resale, rental investment, etc.), the incl. VAT price climbs to €302,500 but the security deposit does not change: still €12,500. The applicable VAT therefore does not influence the security deposit amount, contrary to a received idea.

For the vast majority of new-build purchases in Belgium, it is this “5% excl. VAT” calculation that applies. For special cases (partial sale, purchase with land, complex subdivisions), see our detailed cluster Security deposit calculation with several scenarios.

Also note that the calculation base must explicitly appear on the security deposit certificate. If it is ambiguous (e.g. “5% of the price” without specifying excl. or incl. VAT), demand written clarification before signing the deed. Without that, you risk a dispute upon security deposit release.

3. How: the 3 accepted security deposit forms

The law accepts three forms of security deposit, all legally valid. The developer chooses, but the buyer can negotiate in the contract.

In practice: the bank guarantee is by far the most used (90% of cases) because it costs the developer much less. Blocking at the notary remains the most reassuring option for the buyer — a mechanism whose the Royal Federation of Belgian Notaries (Notaire.be) recalls neutralises any risk of intermediation because there is no intermediation: if you activate the security deposit, the notary releases the funds directly to the craftsman you have appointed.

If you have the slightest doubt about your developer’s solvency, demand notary blocking in the contract. This is a negotiable point even if rarely spontaneous.

Whatever form is chosen, carefully verify the security deposit certificate before signing. Four elements are essential: (1) the name and contact details of the issuing body (bank, Deposit and Consignment Office, or notary), so you can contact them directly in case of need; (2) the explicit calculation base — the certificate must indicate “5% of [amount] excl. VAT” and not a vague formula; (3) the validity dates, notably the effective date and expiry date (which must be after the foreseeable final reception date); (4) the authorised signature of the issuer — an unsigned document or one bearing only a stamp without signature has no enforceable value. If any of these elements is missing or unclear, send back the certificate for correction before any deed signature.

4. When: release in 2 stages

The security deposit is gradually released, in two stages.

First release: 50% at provisional reception (if pronounced without reservation, or if all raised reservations have been lifted on the spot). This first half can be released by the notary at the joint request of both parties.

Second release: the remaining 50% at final reception, i.e. about one year after the provisional. This release formally closes the mechanism.

Seizure by the buyer: if during the warranty year the contractor does not lift reservations within the period set by the minutes (typically 60-90 days depending on the defects), the buyer can seize all or part of the security deposit to have the works executed by a third party.

The procedure: registered formal notice to the contractor, then written request to the notary or guarantor bank, accompanied by quotes from the third-party provider. If the contractor contests, the business court decides. See the complete release procedure with letter templates.

In case of disagreement between buyer and contractor on release (the contractor considers reservations lifted, the buyer contests), two paths open up. The first, and often the fastest, is recourse to the judicial conciliator: this magistrate appointed by the first-instance court intervenes free of charge and can summon both parties in the weeks following the request. The second is full judicial action before the business court, heavier but binding if the conciliator fails. In both cases, a contradictory expert report (drawn up by a sworn expert appointed by mutual agreement or by the judge) constitutes the central piece of the dispute: without it, it is difficult to prove that reservations have not been correctly lifted.

5. What to do if the security deposit certificate is missing?

This is the most critical scenario — and unfortunately the most frequent.

Article 12 is very clear: the security deposit certificate must be delivered to the buyer BEFORE the signature of the authentic deed. Without this document, the contract is void by operation of law. The nullity can be invoked by the buyer even years later, as long as final reception has not taken place (Cass., Mons 22 March 2019).

Red flags to spot:

• The developer says they “will deal with it after signing” → REFUSE
• The developer provides a “commitment” but not a stamped certificate → REFUSE
• The certificate does not mention the calculation base (excl. or incl. VAT) → demand an amendment
• The certificate mentions a bank guarantee but does not name the bank → REFUSE

Practical approach if the certificate is missing:

1. Formal notice by registered letter with acknowledgement of receipt. Template in our Contractor formal notice cluster.
2. Suspension of signing: explicitly refuse to sign the deed as long as the certificate is not delivered. No signing = no payment.
3. Legal action if the developer persists: summary proceedings before the business court to have the possible nullity declared and obtain restitution of paid deposits. See Recourse against the developer for the detailed procedure and case examples.

A frequently ignored point concerns the deadline to invoke nullity. In Belgian law, nullity for violation of the Breyne Law is in principle imprescriptible as long as the contract has not been executed in its essential elements. In practice, however, courts tend to apply the general 10-year limitation period from the signing of the flawed authentic deed (Article 2262bis of the Civil Code). If you signed without certificate more than ten years ago and final reception is pronounced, your remedies are considerably reduced. The lesson: the longer you wait to have the irregularity recorded, the weaker your position. Act upon discovery.

The security deposit is a powerful protection BUT it is useless if you do not demand it before signing. This is typically the moment when expert advisory makes the difference: we re-read your contract, verify the certificate, flag anomalies. Much less costly than discovering three years later that your security deposit was poorly calibrated.