What is the municipality's commercial pre-emption right? 

Verified 01 January 2023 - Directorate for Legal and Administrative Information (Prime Minister)

The right of commercial pre-emption allows a municipality to have priority to buy a commercial lease, a commercial estate, a craft estate or a plot of land that can accommodate businesses. It must then resell it (or relend) to a trader or craftsman. This right of first refusal applies only to property situated in a specific area known as perimeter for safeguarding local trade and crafts.

The municipality enjoys a commercial right of first refusal where certain sales take place in a specific area known as perimeter for safeguarding local trade and crafts are sold.

The sales concerned are as follows:

  • Plots already accommodating or intended to accommodate shops with a sales area of between 300 m² and 1,000 m².

Before any plan to transfer, the seller must ask the city council whether there is a perimeter to safeguard local trade and crafts.

If the craft fund, goodwill, commercial lease or land is located within this perimeter, the seller must send the municipality a prior declaration of sale assignment. Once informed, the municipality may decide to exercise the right of pre-emption and acquire the property.

Property or rights included in the transfer of an activity provided for in a safeguard plan or in the context of a judicial reorganization or liquidation are not affected by the right of commercial pre-emption.

The municipality has a commercial pre-emption right to purchase a commercial lease, a commercial estate, a craft estate or a piece of land as a priority.

It may delegate this right to:

  • EPCI: titleContent of which she is a member 
  • Public establishment 
  • Mixed Economy business (SEM) 
  • Concessionaire of a development operation 
  • Person holding a contract for the performance of commercial or craft revitalization activities or operations

Before any disposal project, the seller must ask the city council whether there is a perimeter to safeguard local trade and crafts.

If the handicraft fund, the goodwill, on commercial lease or the land is located within this perimeter, the seller must inform the municipality by sending it a prior declaration of assignment.

This declaration shall contain the following information:

  • Prices and conditions of the proposed transfer 
  • Activity of the prospective purchaser 
  • Number of employees of the transferor and nature of their employment contract
  • Turnover realized by the transferor

Declaration of assignment of a business, craft or commercial lease, subject to the right of first refusal

This declaration is sent by registered letter with a request for notice of receipt, or by electronic means to the mayor of the municipality. The declaration may also be deposited in town hall against receipt.

Warning  

If the prior declaration of assignment is not made, the sale may be canceled.

Once the municipality is informed of a sale within the protection of local trade and crafts, it may or may not decide to exercise its right of first refusal to acquire the property.

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Decision to pre-empt

Business, craft or land funds

The municipality forwards the decision to pre-empt to the seller by registered post with a request for notice of receipt or by electronic means.

Where the seller of the goodwill or craft fund rents its commercial premises, a copy of the decision to pre-empt shall be sent to the lessor.

The commune then has a three-month period to conclude the assignment from the price and premises agreement.

The municipality must then relend (i.e. resell) the craft fund, the goodwill or the land in a two-year period from pre-emption. If it has not found a buyer within the two-year period, the buyer who initially wished to acquire the lease or the land shall have a right of priority.

Where the municipality has set up the craft fund or the business fund inmanagement leasing in order to keep it in business, the time limit for reselling shall be increased to 3 years.

The municipality must resell to a company registered in SCR: titleContent or at RNE: titleContent. It must post in town hall for 15 days a retrocession notice. This notice shall include a call for applications, a description of the land, the lease or the land, and the proposed price. He mentioned that the specifications could be consulted in the town hall.

The resale (called retrocession) must then be authorized by a decision of the municipal council which sets the conditions and justifies the choice of the beneficiary.

Commercial lease

The municipality forwards the decision to pre-empt to the seller by registered post with a request for notice of receipt or by electronic means.

She has a three-month period to conclude the assignment from the price and premises agreement.

The municipality must then relend (i.e. resell) the commercial lease in a two-year period from pre-emption. If it has not found a buyer within the two-year period, the buyer who initially wished to acquire the lease has a right of priority.

During the transitional period of retrocession, the municipality must fulfill the obligations of the commercial lease with regard to the lessor. For example, they have to pay rent and pay severance pay.

The lessor may not terminate the commercial lease if the goodwill is not in operation.

The municipality must assign the commercial lease to a company registered in SCR: titleContentor at RNE: titleContent. It must post in town hall for 15 days a retrocession notice. This notice shall include a call for applications, a description of the land, the lease or the land, and the proposed price. He mentioned that the specifications could be consulted in the town hall.

The prior agreement of the lessor is required. This agreement is included in the act of retrocession.

The resale (called retrocession) must be authorized by a decision of the municipal council which sets the conditions and justifies the choice of the beneficiary.

Please note

If the lessor objects to the return, he must refer the location of the rented property to the President of the Court.

Decision not to preempt

If the municipality does not its right of first refusal within 2 months of receipt of the prior declaration of assignment, the seller is free to sell to another buyer. The same applies where He must comply with the price and conditions set out in the prior declaration.

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