Reform of real collateral on movable assets

Reform of real collateral on movable assets

The Act of 11 July 2013 thoroughly overhauls real collateral on movable assets. Alongside the classic “possessory pledge” (pledge with dispossession), a possibility of non-possessory pledge is created. In order to be able to oppose this non-possessory pledge to third parties, it must be recorded in the National Pledge Registry. The new law applies to all movable assets, both tangible and intangible, and thus has an effect on all operating assets. As a logical consequence of this, a number of existing pledge rights, such as the pledge on the business, become superfluous and are abolished.

The situation with regard to the pledge on shares remains unchanged, since the WFZ (wet financiële zekerheden = financial collateral act) already provides for a declaration in the share register. The specific rule (WFZ) takes precedence over the general regulation. Of course, nothing prevents parties from registering it in the pledge registry as well.
 
The retention of title is generally regulated by statute, and is no longer limited to bankruptcy. Registration thereof is possible, but not legally obligatory. The retention of title is valid when it is agreed in writing, at the latest upon delivery. 

The direct claim of the subcontractor is supplemented by the obligation for the principal, in the event of a dispute between subcontractor and contractor, to deposit the amount with the Deposit and Consignment Office or onto a blocked account, as soon as he is called on to do so by registered letter. On the other hand, the privilege of the subcontractor is broadened to all cases of contracting, and no longer limited solely to the works in progress on immovables at the work site.
 
The execution procedure has also been fundamentally simplified. Parties are henceforth deemed to reach agreement between themselves on how the execution will be carried out. Judicial intervention will become the exception.
 
The entry into force is (statutorily) scheduled for 1 December 2014 at the latest. However, there is a certain expectation that this date will be pushed further back. Existing pledges must be registered at the latest within twelve months after the act enters into force, otherwise a pledge will lose its rank.