Official Journal of the European Union

EN

C series

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C/2025/537

(Case C-824/24)

(C/2025/537)

Language of the case: French

Parties

Applicant: European Commission (represented by: B. Stromsky, M. Mataija, G. Meeßen, Agents)

Defendant: Kingdom of Belgium

Form of order sought

The applicant claims that the Court should:

—declare that, by imposing a performance security of 100 % of the total price of the building on contractors and sellers who are not ‘registered contractors’, whereas registered contractors must only provide a 5 % performance security, the Kingdom of Belgium has failed to fulfil its obligations under Article 16 and 23 of Directive 2006/123; (1)

—order the Kingdom of Belgium to pay the costs.

Pleas in law and main arguments

The Commission has brought an action for failure to fulfil obligations before the Court of Justice of the European Union, under Article 258 of the Treaty on the Functioning of the European Union, against the Kingdom of Belgium.

The action contests the compatibility of the Belgian law of 9 July 1971 governing residential construction and the sale of housing that has yet to be built or is in the process of being built (the ‘Breyne law’), and of its implementing provisions, with the provisions of Directive 2006/123.

The Breyne law and its implementing provisions state that, for agreements providing for building construction, the contractor or developer must provide a performance security to the buyer in order to protect him or her against the risk of the insolvency of the contractor or developer. The provisions impose a performance security of 100 % of the total price of the building on contractors and sellers who are not ‘registered contractors’ under the Belgian legislation, whereas registered contractors must only provide a performance security of 5 %.

Two complaints are addressed to the Kingdom of Belgium:

First, the Commission complains that the Kingdom of Belgium failed to fulfil its obligations under Article 16 of Directive 2006/123, which sets out the requirements that a State may impose on service providers established in another Member State. The requirement for a performance security of 100 % of the total price of the building constitutes an obstacle to the freedom to provide services. It restricts the freedom of contractors or property developers lawfully established in other Member States in which they carry out their activities, to supply their services in Belgium. According to the applicant, that requirement does not meet any of the potential justifications exhaustively listed in that article as being able to be effectively put forward by the Member State. In particular, it does not meet a justification based on public security, contrary to the Kingdom of Belgium’s assertion. That requirement cannot, in addition, be justified by the protection of consumers because that potential justification is not referred to in Article 16 of Directive 2006/123. In any case, the requirement does not meet other conditions set out in that article and, in particular, the principle of proportionality.

Second, the Commission submits that the Kingdom of Belgium had not complied with the provisions of Article 23 of Directive 2006/123 on professional liability insurance and guarantees, as regards the freedom of establishment. That article authorises Member States to impose an obligation to provide a financial guarantee on service providers who wish to establish themselves in the State where the service is provided, but only in so far as that guarantee is appropriate to the nature and extent of the risk that directly results from the provision of the service. However, the guarantee of 100 % of the total price of the building is not proportionate to the objective of the protection of the buyer of a property sold unfinished against the risk of insolvency of the other party to the contract. It is not appropriate to the nature and the extent of the risk, in particular, because of the extremely significant difference between the 5 % and 100 % guarantee rates at issue, which do not correspond to the difference between the risk of insolvency between the registered contractors and unregistered contractors. Furthermore, the 100 % guarantee does not take into account the protections that buyers already enjoy.

Directive 2006/123/EC of the European Parliament and of the Council of 12 December 2006 on services in the internal market (OJ 2006 L 376, p. 36).

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ELI: http://data.europa.eu/eli/C/2025/537/oj

ISSN 1977-091X (electronic edition)

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