24 April 2015

Property protection for self-employed individuals

For whom do these rules apply? 

The new protection rule applies to natural persons whose main and secondary activity is to be self-employed. Even retirees with an authorized self-employed activity fall within the scope of the law.  The Belgian law defines a ‘self-employed person’ as any natural person with a professional main or secondary activity executed in Belgium, for which he is not bound by any employment contract.  A professional activity  also includes being a representative of a company. This includes managers, directors, certain working partners and individuals responsible for the daily management.  

For which type of property do these rules apply? 

The protection rule only applies for the main residence of the self-employed individual. To determine the main residence, the actual situation has to be taken in account. The main residence is the place where the self-employed individual actually resides during most of the year.  If the property in which he is living is also used for his professional activity, the following rules are applicable:

  • if the area intended for professional use is less than 30% of the total area of the property, the entire property cannot be seized; 
  • if the area intended for professional use is 30% or more of the total area of the property, only the part of the house that serves as a primary residence cannot be seized provided that it has been stipulated in the  statutes . 


Which procedure should be followed? 

If a self-employed person wishes to declare his house non-susceptible for seizure by creditors, he needs to make a statement before a Belgian notary. This declaration should include a detailed description of his property and an indication of the own, common or individual rights held by the self-employed person on this property. If the property is used for both professional and personal use, the description needs to mention the surface measurements of each section.  When this person is married, he needs the consent of his spouse, regardless of the fact if he is the sole owner or if the real estate property is common property of both spouses.  This statement needs to be registered at the mortgage registration office of the district where the property is located. From this day onwards, the declaration of non-susceptibility to seizure of the house is opposable to third parties.  

To which debts does the new protection measure apply? 

The protection is only valid against creditors whose claim arose subsequently to the date of registration at the mortgage registration office.  Also, the protection only applies to professional debts. There is no protection against claims resulting from a crime (even if they are related to the occupation) nor against private debts or debts of a mixed nature (debts associated with both private and professional actions).  This law does not protect the property if the self-employed individual, in his capacity of director or manager, is liable for Social Security debts in case of bankruptcy.  

What happens in the event of a dissolution of the marriage? 

The statement continues to have effect after the dissolution of the marriage, if the property is assigned to the person who has made the declaration, except for the professional debts which can be recovered on the property of the former spouse.  

What happens in the case of bankruptcy of the self-employed individual? 

The loss of the status of being self-employed does not end the protection against debts from the past. The curator of a bankrupt self-employed individual cannot derogate from the declaration.  

What to do when the protected property is sold? 

In case of transfer of the property rights, which are described in the declaration, the obtained price remains non-susceptible to seizure for creditors whose rights have been created following the registration of the declaration. This only applies provided that the person who made the declaration uses the obtained funds to buy a new house, which he uses as his main residence, within a period of one year. During this period, the funds are kept in the hands of the notary who executed the deed of sale. The protection remains provided that a new house is bought within one year, unless the creditor has proof of the fact that the self-employed has intentionally reduced his solvency.  

When does the protection end? 

The death of the person who made the declaration results in the revocation of the declaration. However, this revocation only matters for the future, and its effect is maintained for debts from the past.  The self-employed individual can end the declaration at any time, which affects all creditors. In this case, the declaration is deemed never to have existed.   In the  case of dissolution of the marriage, however, when the property is assigned to the spouse, who is not self-employed, it results in the termination of the protection. However, the self-employed individual can still choose to use the money to acquire a new house as main residence under the same conditions as mentioned before.


Do you have any further questions about this? Then be sure to contact our advisors! Let's talk!

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