Difference between the private sale agreement and the notarial deed: what you need to know

Many buyers and sellers wonder what exactly the difference between a private sale agreement and a notarial deed is. In practice these two concepts are often used interchangeably, and the stubborn idea persists that the private sale agreement is "preliminary" while the notarial deed is the "real" sale. Legally speaking, that is not entirely accurate: both documents are sale agreements, but they serve a different purpose and play a different role in the purchase process. This article explains step by step how the two documents relate to each other, what they have in common, and where the key differences lie.

What is a private sale agreement?

The private sale agreement (in Belgian practice often called the compromis) is the under-hand sale agreement concluded between the buyer and the seller. It is usually drawn up by the estate agent or the notary and signed as soon as both parties have agreed on the price, the property and the conditions.

Key features:

• The private sale agreement contains all the essential terms:
  • the identity of the buyer and the seller;
  • a description of the property;
  • the purchase price and payment terms;
  • suspensive conditions (for example, obtaining a mortgage loan);
  • the deadline by which the notarial deed must be executed;
  • any clauses relating to tenancy, furnishings, the condition of the property, and so on.
• Contrary to what the term "preliminary sale agreement" might suggest, a private sale agreement is legally binding.
  • Once there is agreement on price and object, the sale is in principle final between the parties.
  • The sale can only be dissolved if a suspensive condition is not fulfilled (for example, if the mortgage loan is not obtained within the stipulated period).
• The private sale agreement forms the basis for the subsequent notarial deed. The notary is in principle bound by the content of the private sale agreement: its provisions and conditions are carried over into the deed.

In short: the private sale agreement is the moment at which the buyer and the seller commit to each other contractually.

What is a notarial deed?

The notarial deed (authentic deed) is the official document executed before a notary, usually 3 to 4 months after the private sale agreement.

Key features:

• The deed is drawn up and signed in the presence of the notary, who is a public official bound by obligations of neutrality and legal rigour.
• The deed confirms and formalises the sale agreement from the private sale agreement, with the same price, object and conditions, unless the parties have mutually agreed to a change beforehand.
• It is only after the deed has been registered in the records of the Office of Legal Security (formerly the mortgage registry) that the transfer of ownership becomes enforceable against third parties:
  • third parties (banks, creditors, other prospective buyers) must from that point on recognise the new owner;
  • the seller's creditors can no longer make claims on the sold property after that point.

The notarial deed is therefore the step that anchors the sale not only between the parties, but also in the outside world.

Similarities between the private sale agreement and the notarial deed

Although the focus is often on the difference between a private sale agreement and a notarial deed, it is important to know that they also have a great deal in common:

• Both are sale agreements: legally, they are equally binding between the buyer and the seller.
• Both documents must tell the same story in substance: all the essential conditions and terms in the private sale agreement should also appear in the deed.
• On the basis of the private sale agreement, the sale can in principle already be enforced through the courts if one party fails to meet its obligations (except where a suspensive condition applies).

Notaire.be and several experts stress that it is a misconception to regard the private sale agreement as "less binding" or "preliminary" compared to the deed.

Key differences between the private sale agreement and the notarial deed

Nevertheless, there are a number of fundamental differences that every buyer or seller needs to be aware of.

1. Enforceability against third parties

• Private sale agreement:
  • Binding between buyer and seller, but not yet enforceable against third parties.
  • As long as no deed has been registered, the seller's creditors can still make claims on the property.
• Notarial deed:
  • After registration at the Office of Legal Security, the transfer of ownership is visible in the public records and must be respected by everyone.
  • The buyer then enjoys full legal protection as owner against third parties.

This is perhaps the most important difference between a private sale agreement and a notarial deed: the private sale agreement governs the relationship between the parties, while the deed ensures that the outside world is bound by that sale.

2. Formal requirements

• Private sale agreement:
  • An under-hand agreement; no notarial form is required.
  • Can in principle be drawn up by the parties themselves, although having it prepared by a professional is strongly recommended.
• Notarial deed:
  • Must be drawn up and signed by a notary (authentic deed).
  • Is legally required for the sale of Belgian real estate.

Without a notarial deed, the sale is incomplete with respect to third parties and the buyer does not enjoy the usual legal protection.

3. Timing and deadlines

• Private sale agreement:
  • Is usually signed fairly quickly after agreement on price and property.
  • From that point, various deadlines begin to run, such as:
    • the deadline for obtaining a mortgage loan (suspensive condition);
    • the deadline within which the notarial deed must be executed (usually a maximum of 4 months).
• Notarial deed:
  • Must as a rule be executed within 4 months of the private sale agreement, in order to avoid additional registration duties and penalties.
  • The period between the private sale agreement and the deed is used for searches, certificates, financing arrangements, and so on.

The private sale agreement is the starting gun; the notarial deed is the finish line.

Practical consequences for buyer and seller

The difference between a private sale agreement and a notarial deed has concrete consequences:

• After the private sale agreement:
  • you are legally bound to buy/sell, unless a suspensive condition is not fulfilled;
  • you start incurring costs (deposit, valuations, mortgage file).
• Between the private sale agreement and the deed:
  • the seller remains the owner, but risks and obligations have often already been contractually transferred (for example, the fire insurance);
  • the seller may in principle no longer sell the property to anyone else.
• After the deed:
  • as the buyer you are officially the owner and you definitively take over the fire insurance and all charges;
  • as the seller you receive the sale price (after repayment of any outstanding mortgage loans).

Why is it so important that the private sale agreement and the deed are consistent?

Because both the private sale agreement and the deed are equally binding, notaries and experts warn that you should avoid leaving any contradictions between the two documents.

• The notary must carry the provisions of the private sale agreement over into the deed; if there are discrepancies, these can give rise to disputes or even legal challenges.
• If, after the private sale agreement, additions or changes turn out to be necessary (for example, an amended clause regarding works, or a revised date for handing over the keys), it is best to have these recorded in writing and signed by both parties, so that the notary can incorporate them correctly into the deed.

In that sense, the private sale agreement is not a "draft version" of the deed, but already the definitive basis on which the authentic deed is built.

Summary: the difference between the private sale agreement and the notarial deed at a glance

If you are buying or selling a property, it is therefore crucial that you take the private sale agreement very seriously. That is the moment at which you need to have all the conditions clearly defined and, if necessary, negotiate the clauses, suspensive conditions and timing. The notarial deed follows as the authentic confirmation and ensures that your ownership is also fully protected legally against third parties.