Abolition of Publicity Obligation by Filing Invoices at Court Registry
1. Background
Pursuant to section 20, 5° of the Mortgage Act, the seller of movables which have not yet been paid by the buyer, has a privilege on these goods, provided that they are still in the possession of the debtor-buyer.
The legal privilege provided for in section 20, 5 ° of the Mortgage Act is, however, no longer applicable when the (unpaid) movables “have become immovables by intended use or incorporation, except in case of machinery, equipment, tools and other business equipment material, used in industrial, trade or craftsman’s businesses.”
The latter is important! For business equipment material, machinery or equipment, the legal privilege of section 20, 5 ° of the Mortgage Act can be relied on, even if they were linked to the customer’s business by intended use or incorporation.
In addition, in the latter case the privilege will continue to exist for 5 years after delivery, insofar as the publicity condition of filing the invoice at the court has been met.
This publicity condition will be abolished from 1 September 2013.
2. Former section 20, 5° of the Mortgage Act
To enjoy the privilege of unpaid seller with regard to machinery, equipment, tools and other business equipment material for five years, former section 20, 5° of the Mortgage Act sets an additional publicity condition. Within 15 days from delivery, the seller must file a certified true copy of the invoice or any other deed from which the sale is apparent at the registry of the commercial court where the buyer is established.
Next the court registrar must draw up a instrument of filing, collect the copies “in a volume “ and make “cards index” daily according to the names of the buyers. In addition, the court registrar must allow inspection to everyone who requests to do so and specifies the buyer’s identity.
Luckily enough also the legislator was aware of the fact that this system no longer fits in our modern digital world and gives rise to useless work overload for the court registries involved.
The Act of 14 January 2013 "containing various provisions on work load reduction within Justice" will change all this.
3. New section 20, 5º of the Mortgage Act
By simplifying the law, the publicity condition is abolished by filing invoices. The court registrar is no longer obliged to collect volumes and keep index cards.
The burden of proof remains unchanged. The delivery of the goods must still be proved by the books of the seller, unless proof to the contrary is provided.
The other provisions regarding the privilege of the unpaid seller remain unchanged.
4. Conclusion
As from 1 September 2013, it will no longer be necessary to file invoices for the supply of business goods at the commercial court registry to exercise the privilege of section 20, 5 ° of the Mortgage Act (which remains valid for five years).
Furthermore, the remaining provisions of section 20, 5° of the Mortgage Act will remain in full force.
In the event of seizure of immovable property seizing the sold machinery, equipment, tools and other business equipment material referred to, and also in the event of adjudication of bankruptcy of the debtor, before 5 years have expired, the privilege of the unpaid seller will continue to exist until after the distribution of the proceeds of the seizure of immovable property or until after the settlement of the bankruptcy.
If the sale took place without a time limit, the seller can claim back the movables and prevent their resale, as long as they are in the possession of the buyer. This should, however, be done within 8 days from delivery and provided that the goods concerned are still in the same condition as at the time of delivery.
