16 December 2013

The new Belgian Act regarding securities on movable goods

On 2 August 2013 a new Belgian Act was published regarding securities on movable goods. The act puts an end to the variety of rules applicable when dealing with securities on movable goods.  As from entry into force, all sorts of securities (debt pledge, floating charges, retention,…) will be governed by one act.

Some important consequences of this new act:

* The creation of an online registry

In order to simplify the opposability of a pledge, the act states that a national, online registry should be created. As a consequence, it will no longer be necessary to physically obtain the pledged goods in order to oppose the pledge towards third parties. The pledgor can use the goods without any problems with regard to the pledge.

* Duration and termination of pledge agreements

The pledge agreements can be closed for a definite or indefinite period. If the agreement is closed for an indefinite period, it can only be terminated by respecting a term of notice from three to six months.
* Floating charge

The law of 25 October 1919 concerning floating charges will be deleted due to the new act. As a consequence, the floating charge will be handled as any other pledge and therefore loses its specific status. The new law will contain a new catch-all provision by which the pledge will be deemed to cover all assets of the business. Furthermore, the floating charge will no longer only be available to financial institutions, but to all creditors.

* No longer intervention by judge needed for the sale of the goods

Unless the pledgor is a consumer, it will, no longer be necessary for the creditor, to obtain the approval of a judge in order to sell, rent or enforce pledged goods.
Further modalities can also be dealt with in the agreement between parties.

The new law is deemed to be less severe than the old rules on securities and the impact of the law can be enormous for companies, investors,… as goods can be pledged and continue to be used by the pledgor.

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