In a judgment dated 9 June 2016 (C.15.0360.N) by the Court of Cassation ("Hof van Cassatie"/"Cour de cassation"), the question was raised whether the sale of a real estate property via a public auction website falls within the legal monopoly of the notary.
According to article 1 of the Act of 16 March 1803 on the notarial profession – and subject to the rights of the public authority – only notaries are competent to sell real estate properties publicly. The goods may only be awarded to the highest and latest bidder.
The Court of Cassation specifies the conditions under which a public sale ("openbare verkoop"/"vente publique") falls within the monopoly of notaries. It must be a sale where (cumulatively):
- a public, which is physically or virtually brought together, is given the opportunity to make competitive bids,
- each bidder knows of the other bids, without necessarily knowing from whom a bid originates or by whom it is made, and
- it is clear from the start that the good will be awarded to the highest bidder, or that it will be withdrawn from sale.
According to the Court of Cassation, a sale maintains its public nature even if certain formalities, such as prior registration, must be completed in order to be admitted to the bidding.
The judges in appeal were thus correct to hold that the sale of a real estate property via the public website "Heyman.be veilingen" was a public sale, which falls under the exclusive competence of notaries. In the case at hand, a sales agreement that was concluded via the website was annulled because the legal monopoly of the notary had been violated.
This decision will undoubtedly be much debated. It shows that old rules and traditional concepts can play an important role in launching a new business model in the digital world.