Cabinet Investigates Legal Reflection Period for Consumer Land Purchases

Minister Keijzer (Housing and Spatial Planning), on behalf of the Minister of Finance and the State Secretary for Justice and Security, writes today in a letter to the House of Representatives.

Splitting a plot to offer separate lots for sale is often legitimate and a common practice in area development, for example by selling split plots to future residents. Land trading becomes dubious when sellers pressure buyers, withhold information, or unjustly suggest that the land will quickly increase in value, for example due to a change in zoning to building land. Buyers can thereby suffer significant financial losses.

The minister points out that under current legislation, consumers can annul purchase agreements and claim damages in cases of unfair commercial practices. There also appears to be greater awareness of the risks. New figures from the Cadastre show that the number of transactions in investment plots continues to decline, possibly due to political and media attention on speculative land trading. Furthermore, notaries seem to be more explicitly addressing risks as part of their duty of care.

With a view to potential undesirable future developments, the minister weighs proposals from a working group and the Minhas/Boulakjar motion in her letter. The motion calls for research into a ban on splitting in speculative trading with agricultural land. The cabinet advises against this. A splitting ban conflicts with property rights and hinders regular area development where developers sell plots to future residents.

The same applies to several proposals from the project group and the Cadastre that carry the risk of hindering regular area development and increasing regulatory pressure. The measures would then be ineffective.

The cabinet is investigating the desirability of introducing a legal reflection period of three days for consumer land purchases. This protects consumers against impulse purchases. Private individuals could then, as is the case with home purchases, cancel the purchase agreement without consequences.

Furthermore, the cabinet is examining whether it is necessary to legally broaden information exchange between regulators. Specific attention is given to information from the Financial Supervision Office (BFT), which is bound by confidentiality in individual cases.

The government continues to work with partners on additional information efforts to raise awareness of the risks of speculative trading.