Biddit.be – A new transparent and safe online platform for public auction – Lexology
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In 2018, Fednot (Koninklijke Federatie van het Belgisch Notariaat / Fédération Royale du Notariat belge) launched “Biddit.be”, an online platform for public auction of real estate. In this article, we describe how it works from a legal point of view and provide you some with some points of attention.
The advantages of a website for public auctions
The launch of Biddit.be on 8 May 2018, was part of digitalisation of the notary sector. Before, public auctions of real estate assets were only executed by notaries and are organised in the public auction sales. In response to the call for innovation, the legislator created a legal basis to organise and sell real estate assets through a public auction website, in the Insolvency Law of 11 August 2017.
On Biddit.be, making a binding offer can be simply done from your computer at home (with use of an e-ID reader) or even from your mobile phone (with use of the app Itsme). This way, the identity of the bidders is controlled and secured. For the other bidders and the seller, the identity and details of the prospective buyer are anonymised.
A potential buyer can make an offer manually or automatically by pre-setting a maximum amount for his bid. From the perspective of the seller, the major advantage of such online auction is that one reaches more people, which means more bidders.
Moreover, each offer made on the online platform is visible for every visitor on Biddit.be, which makes the use very transparent. The period to make an offer is always 8 days. Once the bidding period is terminated, the buyer immediately receives a notification. In case you are the highest bidder, the notary in charge will contact the buyer to finalise the acquisition.
And above all, the sale will be completed much quicker via Biddit.be compared to a classic sale, where it takes approximately between 3 to 4 months to finalise the notarial deed. With an online sale at Biddit.be, the notary performs all real estate searches in advance, limiting the timing and process of finalising the notarial deed up to 2 or 3 weeks. The notary fee for an acquisition via Biddit.be is still due.
Making a well-considered offer: some attention points
Each offer made by a candidate buyer is binding. The notary assigns the property to the person who has made the highest offer (toewijzing/l’adjudication). If, for example, later on the buyer can not obtain financing for the acquisition, this will in principle not be a valid reason for dissolving the sale. Buyers must therefore be certain, before they make their offer, that they can finance the amount offered. This is only different when the terms and conditions of sale explicitly provide for a condition for obtaining a loan.
Sometimes, a set price (instelprijs/prix fixé) is fixed for the offers. In that case, the first bidder might receive a premium if he becomes the highest bidder at the end of the biddings, for example 1% reduction on the purchase price. These conditions are set out in the terms and conditions of the sale, which are accepted by the bidders prior to making an offer.
After closure of the biddings, the notary shall inform the seller of the amount of the highest bid. Only if the seller accepts that amount, the property is actually allocated to the highest bidder. Therefore, until the highest bid is accepted, there is no sale constituted.
Moreover, not only the highest offer is binding. The 4 following offers are also binding until a maximum of 10 working days after the offers are closed. If, for any reason, the sale cannot be completed with the highest bidder, the purchase agreement is concluded with the next bidder in line.
Waiving the highest bid will, in principle, only be possible upon payment of the indemnity provided for in the conditions of the sale. This may be a fixed amount, a percentage of the purchase price offered or the difference between the purchase price offered and the second highest bid.
High performing platform
After only 3 years, Biddit has become the most widely used form of public sale in Belgium. For the buyer, it is fairly easy to use but there are some attention points. The seller has much greater visibility. On the other hand, the administrative cost (registration duties and notary fees) has not changed.
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