Understanding the content and legal value of a sales agreement

Once the potential buyer has found a building (flat, house or land), they will have to take a number of steps and sign various documents in order to become the owner. One of the documents that the potential buyer will be required to sign is commonly referred to as a "sales agreement" (technically, a 'promise-of-sale agreement').

Since it is a genuine contract, a sales agreement signed by both parties is final and binding. It requires the signatories to conclude the sale at a specified price. The sales agreement may be registered and a notarised authentic deed will be prepared to formalise the sale.

Since this private document constitutes a genuine commitment, it is very common to include suspensive conditions (for example, the agreement comes into force only if the potential buyer is granted a bank loan to finance the purchase of the building). 

"A sales agreement constitutes a sale": this well-known expression means that a sales agreement becomes complete as soon as the agreement is signed. Therefore, particular caution is advised before signing such a document.

Since 1 July 2012, real estate ads for the sale or rental of property which are published in commercial media must specify the energy performance class (according to the primary energy expenditure index) and the thermal insulation class (according to the heating energy expenditure index) of the residential building.

Nature of the sales agreement

Theoretically, a sales agreement—i.e., a promise-of-sale agreement—could be used for the sale of any object.

In practice, however, such agreements are mainly used for the sale of buildings. The reason for this is that, in order to be enforceable against third parties, the sale of a building must be formalised in a notarial instrument, which alone can be registered at a Mortgage Registry. The law has given exclusive jurisdiction to notaries to prepare the documents through which a building changes ownership. In particular, a notary will make a number of background checks to determine the seller's ownership status and whether or not any mortgages, easements and other charges exist.

As soon as seller and the purchaser have agreed in principle to the sale, they often wish to formalise their agreement in writing, before they go to the notary's office, to protect themselves in case one of the parties changes their mind their appointment with the notary.

The preparation and signing of a sales agreement are subject to 2 conditions:

  • the seller must have the legal capacity to sell the asset, and the buyer the right to purchase it;
  • the object and the price must be determined.

A notarial instrument makes it possible to enforce a private document signed between the parties against third parties. Skipping this formality in no way changes the final and binding nature of the sales agreement, from which, in theory, the parties cannot withdraw.

However, the signing of a sales agreement is not mandatory. The seller and buyer could very well go to the notary's office without first having signed a sales agreement. Nevertheless there is a risk that the buyer could lose their option to purchase the asset.

Main clauses contained in a sales agreement

To be valid, the sales agreement must at least contain the names and addresses of the parties, the designation (land register references, etc.) of the property to be sold, the sale price and the terms and conditions of payment. Other information may be included as well, such as the existence of any easements, the name of the notary and the date of signing of the deed, or the date scheduled for the actual transfer of occupancy (which takes place when the keys are handed over). The sales agreement may also contain a delayed occupancy compensation clause in the event that the keys are not handed over on the scheduled date.

Beyond these references, virtually all sales agreements contain a number of special clauses that make the sale referred to in the agreement subject to conditions.

Granting of a bank loan as a suspensive condition (condition precedent)

Pursuant to this clause, the buyer is not obliged to buy the building until they have received a loan from a bank.

To prevent the seller from having to wait indefinitely for the buyer to inform them whether or not a bank loan has been granted, the parties usually set a time limit—in writing—within which the buyer promises to inform the seller of the bank's response.

This time limit is determined by the parties at their discretion. However, the time limit must be long enough to allow the buyer reasonable time to submit a loan application to their bank and receive a response before the time limit expires. The time limits observed in practice are at least 4 to 6 weeks. The time limit may be extended through an official letter from the bank certifying that an application for a bank loan has been submitted and is being processed.

The condition/clause is called a "suspensive" condition/clause because it suspends the effects of the agreement until the buyer obtains the bank loan. In the event of a dispute, the courts will attempt to ascertain that the purchaser has performed the clause in good faith and with due diligence. As a result, if there is a trial, it is up to the buyer to prove that they actually applied for a loan from at least one bank, that the application was submitted in a timely enough manner to enable the bank to determine whether to grant the requested loan, and that the buyer informed the seller of the bank's approval or refusal within the period stipulated in the agreement.

Penalty clause

This is a clause in which the parties make advance provision for the payment of a lump-sum penalty by the party that terminates the agreement without being entitled to do so. In other words, a penalty clause provides for the payment of a sum of money to the injured party if the other party fails to perform an obligation. The penalty amount is specified in the agreement and, in principle, cannot be adjusted by a court. A penalty clause provides for a lump sum, which avoids the need to quantify the injury suffered.

In practice, the penalty amount is set at 10 % of the sale price.

Example: the sale price is EUR 350,000. The buyer obtains a bank loan, but refuses to sign a notarial deed of sale. If a penalty clause of 10 % of the sale price is provided for in the agreement, the buyer must pay the seller EUR 35,000 as compensation for damages.

The payment of notary fees and real estate agent's commission

In many cases, the parties specify in the agreement who will pay the notary fees and the real estate agency fees, if any.

Although the parties may allow the seller or the buyer to pay the notary fees at their discretion, the established practice in this scenario is for the buyer to pay the notary fees.

The parties are free to have the notarial instrument drawn up by the notary of their choice (regardless of location). If the name of the notary has not been determined by mutual agreement, it is generally up to the party who pays the notarial expenses to seek out the services of the notary of his choice.

When a sale occurs through a real estate agent, their commission—usually 3 % of the sale price of the building + VAT—is paid by the party who engaged the real estate agent (generally the seller).

Registration of an agreement

In principle, sales agreements for buildings must be registered with the Registration Duties, Estates and VAT Authority. Non-professionals in the real estate business must submit the sales agreement to the registration department within 3 months of the day of signing.

In practice, however, many sales agreements are not registered. Failure to register an agreement does not affect its validity between the parties. However, registration makes the agreement enforceable against third parties from its date of registration, which allows the buyer to invoke the agreement against a third-party purchaser to whom the seller might have sold the building in violation of the agreement.

The party who presents the agreement at an office of the Registration Duties, Estates and VAT Authority in Luxembourg must pay the registration fee. For agreements that contain a suspensive clause—such as the application for a bank loan—the registration fees are fixed (EUR 12).

The same is not true for agreements that do not contain a suspensive clause. In that case, a registration fee of 7 % on the stipulated selling price is charged to the person who presented the agreement.

Consequences of non-compliance

Contrary to common belief, a sales agreement is not just a preliminary contract without legal effects. Actually, a sales agreement signed by the seller and the buyer (or their representatives, such as a duly authorised estate agent) immediately produces legal effects between the parties.

As such, failure to comply with a sales agreement could give rise to legal action against the party whose non-compliance prevented the parties from entering into the notarial deed of sale.

The defaulting party can either be the buyer who, after some thought, no longer wants to buy the building, or the seller, who no longer wants to sell their building to the other party (because they have changed their maid about selling the building, or because they have found another buyer willing to pay a higher price).

The party whose fault or negligence is the cause of the non-compliance with the agreement may then be ordered to pay the other party the amount in the penalty clause, if there was one in the agreement, or compensate him for the damage actually caused.

Forms / Online services


Land register

Consult your ownership rights (plots and private units) in your private eSpace.

To complete your application, the information about you collected from this form needs to be processed by the public administration concerned.

That information is kept by the administration in question for as long as it is required to achieve the purpose of the processing operation(s).

Your data will be shared with other public administrations that are necessary for the processing of your application. For details on which departments will have access to the data on this form, please contact the public administration you are filing your application with.

Under the terms of Regulation (EU) 2016/679 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, you have the right to access, rectify or, where applicable, remove any information relating to you. You are also entitled to withdraw your consent at any time.

Additionally, unless the processing of your personal data is compulsory, you may, with legitimate reasons, oppose the processing of such data.

If you wish to exercise these rights and/or obtain a record of the information held about you, please contact the administration in question using the contact details provided on the form. You are also entitled to file a claim with the National Commission for Data Protection (Commission nationale pour la protection des données), headquartered at 15, boulevard du Jazz L-4370 Belvaux.

By submitting your application, you agree that your personal data may be processed as part of the application process.


Consultez vos droits de propriété (parcelles et lots privatifs) dans votre espace privé.

Les informations qui vous concernent recueillies sur ce formulaire font l’objet d’un traitement par l’administration concernée afin de mener à bien votre demande.

Ces informations sont conservées pour la durée nécessaire par l’administration à la réalisation de la finalité du traitement

Les destinataires de vos données sont les administrations compétentes dans le cadre du traitement de votre demande. Veuillez-vous adresser à l’administration concernée par votre demande pour connaître les destinataires des données figurant sur ce formulaire. Conformément au règlement (UE) 2016/679 relatif à la protection des personnes physiques à l'égard du traitement des données à caractère personnel et à la libre circulation de ces données, vous bénéficiez d’un droit d’accès, de rectification et le cas échéant d’effacement des informations vous concernant. Vous disposez également du droit de retirer votre consentement à tout moment.

En outre et excepté le cas où le traitement de vos données présente un caractère obligatoire, vous pouvez, pour des motifs légitimes, vous y opposer.

Si vous souhaitez exercer ces droits et/ou obtenir communication de vos informations, veuillez-vous adresser à l’administration concernée suivant les coordonnées indiquées dans le formulaire. Vous avez également la possibilité d’introduire une réclamation auprès de la Commission nationale pour la protection des données ayant son siège à 15, boulevard du Jazz L-4370 Belvaux.

En poursuivant votre démarche, vous acceptez que vos données personnelles soient traitées dans le cadre de votre demande.


Sehen Sie Ihre Eigentumsrechte (Parzellen und Sondereigentum) in Ihrem privaten Bereich ein.

Ihre in diesem Formular erfassten personenbezogenen Informationen werden von der zuständigen Verwaltungsbehörde verarbeitet, um Ihren Antrag erfolgreich abzuschließen.

Diese Informationen werden von der Behörde für den zur Verarbeitung erforderlichen Zeitraum gespeichert.

Die Empfänger Ihrer Daten sind die im Rahmen Ihres Antrags zuständigen Verwaltungsbehörden. Um die Empfänger der in diesem Formular erfassten Daten zu erfahren, wenden Sie sich bitte an die für Ihren Antrag zuständige Behörde.

Gemäß der Verordnung (EU) 2016/679 zum Schutz natürlicher Personen bei der Verarbeitung personenbezogener Daten und zum freien Datenverkehr haben Sie das Recht auf Zugang, Berichtigung und gegebenenfalls Löschung Ihrer personenbezogenen Informationen. Sie haben zudem das Recht, Ihre erteilte Einwilligung jederzeit zu widerrufen.

Weiterhin können Sie, außer in Fällen, in denen die Verarbeitung Ihrer Daten verpflichtend ist, Widerspruch einlegen, wenn dieser rechtmäßig begründet ist.

Wenn Sie diese Rechte ausüben und/oder Einsicht in Ihre Informationen nehmen möchten, können Sie sich unter den im Formular angegebenen Kontaktdaten an die zuständige Verwaltungsbehörde wenden. Sie haben außerdem die Möglichkeit, bei der Nationalen Kommission für den Datenschutz Beschwerde einzulegen (Commission nationale pour la protection des données, 15, boulevard du Jazz L-4370 Belvaux).

Wenn Sie Ihren Vorgang fortsetzen, akzeptieren Sie damit, dass Ihre personenbezogenen Daten im Rahmen Ihres Antrags verarbeitet werden.

We are interested in your opinion

How would you rate the content of this page?

Last update