Under Belgian law, a distinction can be made between arrangements governed by the Belgian civil law on leases, including the rules, as the case may be, enacted by the three regions following the Sixth State Reform, and contracts with a similar purpose that are governed by Belgian contract law.
There are different types of lease agreement:
1. Common law lease agreements. Lease agreements subject to the general provisions of the Belgian Civil Code (ie office leases, warehouses).
2. Residential lease agreements. Agreements relating to the tenants’ principal place of residence. Following the Sixth State Reform each of the three Regions in Belgium has adopted its own residential lease legislation, namely:
3. Commercial lease agreements. Agreements protecting retailers or artisan activities: for standard commercial lease agreements, the Federal Commercial Lease Act of 30 April 1951 still applies. However, the 3 Regions have adopted their own legislation relating to short term leases, namely:
4. Farming Leases. Lease agreements relating to real estate leased to farmers for agricultural purposes.
Contracts that are similar to lease agreements, such as the operational/financial leasing (and financing) of commercial real estate (offices and industrial buildings – location-financement/onroerende leasing), facility provision agreements (mise à disposition/terbeschikkingstelling) for warehouses, parking spaces, hotel management contracts, etc. Finally, lease contracts for office spaces and retail stores in shopping malls are sometimes combined with service agreements relating to reception facilities, telecommunication services, meeting rooms etc and may or may not be contained in a single written contract.
The Commercial Leases Act, the Regional rules governing pop-up commercial leases, and the Regional rules on residential housing contain certain mandatory provisions which the parties cannot contract out of, generally for the protection of the tenant, as well as certain optional provisions which parties can adopt if they wish.
Only general leases (offices, warehouses, industrial buildings) and commercial leases are discussed here. Residential leases and farm leases are not covered.
Last modified 13 Jun 2024
Few legal provisions affect the term of general leases (as opposed to commercial leases which are used in a retail context). There is no legal minimum or maximum duration. The term can be fixed (as is most often the case) or indefinite. In the case of the former, break options allowing termination of the lease after a certain period are permitted. The most common arrangement for an office lease is what is known as a ‘3-6-9 lease’, ie a nine-year lease with an option for both parties to terminate the lease after the third and sixth years. Normally parties will agree on the indemnity (if any) and the notice period to be given if the lease is to be terminated.
General lease agreements with an initial duration of more than nine years must be concluded in front of a Belgian notary, since they require registration in the mortgage registers of the locality where the leased premises is located.
Commercial leases are always agreed for a fixed term of not less than nine years. Commercial leases entered into for less than nine years are treated as having a minimum duration of nine years. This also applies where parties have not specified the term of the lease. This provision also applies to subleases, but they may not be entered into for a period exceeding the duration of the principal lease.
In a commercial lease, the parties may specify a term of more than nine years but in this case the lease contract must be concluded in front of a Belgian notary, since it must be registered in the mortgage registers of the locality where the leased premises is located.
Both in the Flemish Region, the Walloon Region and the Brussels Capital Region, commercial lease agreements can also be concluded for a term not exceeding the period of one year.
Last modified 13 Jun 2024
Office (and warehouse) leases are subject to the general provisions of the Civil Code. These also apply by default to the other types of lease agreements on any point not expressly covered by specific legislation.
Commercial leases are subject to the mandatory Commercial Lease Act or, as the case may be, the Regional pop-up lease regulations. In principle the provisions of the Commercial Lease Act and the Regional pop-up lease regulations, although they are not of a public order (d’ordre public/openbare orde), have an imperative nature (droit impérative/dwingend recht). This implies that where parties decide to deviate from the imperative provisions of the Commercial Lease Act or the Regional pop-up lease regulations, such deviation would be invalid (on that specific point). Within the Commercial Lease Act and the Regional pop-up lease regulations, the protected party is in most cases the tenant. Pursuant to a Supreme Court Judgment of 9 September 2019, it has been established that the protected party may not contractually waive his right to invoke the fact that such an agreement would be invalid. Such a waiver is only possible once the right has materialized. Only those provisions of the Commercial Lease Act and the Regional pop-up lease regulations where the law unequivocally states that parties may agree otherwise are of a supplementary nature (droit supplétif/aanvullend recht).
Last modified 13 Jun 2024
Without any provision to the contrary, a written lease with a fixed term ceases automatically on the expiry of the specified term, with no requirement to give notice of termination unless agreed otherwise. If the term of the lease is indefinite (or where the lease is in the form of an oral agreement), a notice of one month is required.
When a written, fixed-term office lease expires, if the tenant stays in the premises with the explicit or tacit approval of the landlord, then a new lease agreement arises on the same conditions and with the same duration as the initial lease. However, when prior notice of termination has been served by the landlord, the tenant cannot rely on this renewal.
Parties may also provide for the automatic extension of the lease so that the tenant can stay in the leased premises at the end of the initial term for a fixed or indefinite period.
Very specific procedures apply to the renewal of commercial leases. The tenant has a prior statutory right, on the expiry of the lease and on the expiry of the first and second renewals, to request renewal of the lease agreement for a further nine years (unless the parties agree on a shorter period in a notarized instrument or by a declaration before a judge) so that either he or any subtenant can continue the same retail trade.
In order to obtain a renewal, the tenant must notify the landlord of his intention either by registered mail or by notice served by a bailiff between the eighteenth and the fifteenth month before the expiry of the existing lease agreement.
The grounds on which the landlord can refuse to renew are limited and specified in the Commercial Lease Act:
If the landlord relies on one of the above grounds for refusal, then compensation may be payable in some cases. If the landlord wishes to refuse to renew on other grounds, then he will have to pay the tenant compensation equal to three years’ rent.
Under the regional pop-up lease regulations, Parties are free to extend the pop-up lease in writing provided that its term does not exceed one year in total. In the event the term of the pop-up lease exceeds one year (following its possible extensions), it shall be considered as a lease agreement falling under the Commercial Lease Act with a term of nine years as from its entry into force.
Last modified 13 Jun 2024
A written lease with a fixed term ceases automatically on the expiry of the specified term, with no requirement to give notice of termination (unless agreed otherwise). If the term of the lease is indefinite (or where the lease is in the form of an oral agreement), one month’s notice of termination is required.
Following termination or expiry of the lease the landlord is entitled to file a claim to recover possession. It can take several months to obtain a judgment requiring the tenant to vacate the premises. If the tenant fails to comply with the judgment, the landlord may be forced to evict the tenant with the assistance of a bailiff.
Since a commercial lease always has a fixed duration, which automatically ceases on expiry of the term, there is no need to give notice of termination (unless agreed otherwise). The same process applies to recovering possession as for general leases.
Last modified 13 Jun 2024
A lease can be terminated if the tenant fails to comply with its obligations under the lease agreement. However, in such circumstances, the lease contract cannot be terminated by the landlord unilaterally but must be dissolved by a formal court decision. Any clause in a lease agreement purporting to allow unilateral termination if the tenant fails to comply with its obligations under the lease agreement, is invalid. If the lease contract is dissolved due to default by the tenant, in addition to all outstanding amounts due under the contract, compensation must be paid to the landlord, equal to the amount of rent due for the time it takes to find a new tenant, as determined by the courts. Additional damages may also be payable. Office lease contracts often specify an agreed amount of compensation, equal to between 6 and 12 months’ rent.
Any lease contract may also be terminated by mutual consent. No formal conditions need be complied with in these circumstances. However, in order to avoid potential problems, it is advisable to draw up a written agreement for the termination.
Finally, the lease contract will end automatically if the leased premises are destroyed by an outside force. In cases of partial loss of the leased premises, the tenant can opt for a reduction in rent or for termination of the lease but will not be entitled to damages.
A lease can be terminated if the tenant fails to comply with its obligations under the lease agreement. However, in such circumstances, the lease contract cannot be terminated by the landlord unilaterally but must be dissolved by a formal court decision. Any clause in a lease agreement purporting to allow unilateral termination if the tenant fails to comply with its obligations under the lease agreement is invalid.
If the lease contract is dissolved due to default by the tenant, in addition to all outstanding amounts due under the contract, compensation must be paid to the landlord equal to the amount of rent due for the time it takes to find a new tenant, as determined by the courts. Additional damages may also be payable.
The Commercial Lease Act also allows the landlord to terminate a commercial lease agreement at the end of every three years if the following conditions are all complied with:
The parties can also terminate the agreement by mutual agreement before the end of the minimum nine-year period on condition that this is confirmed in a deed entered into in front of a Belgian public notary or contained in a statement made before a judge (juge de paix/vrederechter).
The tenant has the statutory right to terminate the agreement at the end of every three years, if he makes his intention known to the landlord by registered letter or by a notice served by a bailiff at least six months before the end of the ongoing three-year period. The tenant cannot waive this right.
Finally, the lease contract will end automatically if the leased premises are destroyed by an external force. In cases of partial loss of the leased premises, the tenant can opt for a reduction in rent or for termination of the lease but will not be entitled to damages.
Under the Regional pop-up lease regulations, the tenant can terminate the pop-up lease at any time with one month’s notice by registered letter or by a notice served by a bailiff. The parties can also terminate the pop-up lease by written mutual agreement.
Last modified 13 Jun 2024
Government bodies and local authorities have certain rights to acquire property on a compulsory basis, including property held under leases.
When this occurs, the tenant can claim damages from the landlord (unless this is excluded in the lease agreement) and from the relevant government body/local authority.
Last modified 13 Jun 2024
The landlord can require a guarantee. Parties are free to determine the amount of the guarantee, and the manner in which this is to be given, for example an amount deposited in a blocked bank account for the duration of the lease. (Irreversible and unconditional) bank guarantees and parent company guarantees are also common.
The tenant is also required by the Civil Code to furnish the leased premises sufficiently. The landlord has first call on the proceeds of a forced sale of furnishings if there are arrears. This obligation cannot be imposed on a tenant who has provided a guarantee as an alternative.
Last modified 13 Jun 2024
Normally the parties will agree on the use of the leased premises and this will be set out in the contract. The tenant will not be allowed to use the leased premises for other purposes. The principal use of the leased premises will determine which legal provisions apply.
It is also advisable to state which party is responsible for obtaining any specific authorizations or permits required for the tenant’s activities in the leased premises (this will usually be the tenant).
Last modified 13 Jun 2024
The parties are free to agree to conditions for any alterations and improvements in the lease contract. Standard lease contracts require the landlord’s prior written consent for changes.
The Commercial Lease Act states that a tenant is always permitted to permanently change the structure of the leased premises, subject to the following conditions:
The parties cannot agree for different provisions to apply.
A tenant who wishes to carry out renovation must notify the landlord by registered mail or by a notice served by a bailiff. This request must also be accompanied by the architect’s plans and the contractor’s specifications or cost estimate.
The landlord has 30 days to give formal notice of opposition to any scheduled renovation works. Failing such notice, the works will be deemed accepted on the terms proposed. Disputes must be settled by a judge.
The landlord has the right of access to the site and may require the tenant to take out additional insurance.
The parties may agree that the specific provision of the Commercial Leases Act relating to renovation/improvements will apply on termination. This provides that, where renovation works have been carried out with the explicit or tacit consent of the landlord, or following a judicial decision to that effect, the landlord cannot demand that the premises are returned to their original condition. Where the landlord demands that alterations are left in place he must compensate the tenant. The landlord can choose either to compensate the tenant for the value of the materials and labour, or to pay an amount equal to any increase in value of the leased premises. Where works have been carried out without the landlord’s consent, the landlord a right to request that the leased premises are restored to their original state, or may require the alterations to be left in place without paying compensation. In the case of alterations that do not permanently alter the use of the leased premises, the Commercial Lease Act does not provide any specific arrangements, so the general provisions of the Civil Code apply.
In pop-up leases both in Flanders, the Walloon Region and the Brussels Capital Region, unless otherwise agreed, the tenant is permitted to perform transformations which:
However, the parties are allowed to agree in writing on different provisions to apply.
A tenant who wishes to carry out transformations must notify the landlord in writing before the start of the transformations. For pop-up leases in Brussels and the Walloon region, the landlord has 10 days to give formal notice of opposition. For pop-up leases in Flanders, no statutory objection right is included in the Flemish Decree (although parties are expressly allowed to contractually foresee this as they may deviate from the Decree on this point).
The landlord has the right of access to the site and may require the tenant to take out additional insurance.
Where works have been carried out without the landlord’s consent or without complying with said consent, he has a right to demand that the transformations are stopped.
At the departure of the tenant, when transformations are performed at the costs of the tenant, the landlord can request their suppression, unless otherwise agreed. If the landlord keeps said transformations, he is not required to pay any compensation.
Last modified 13 Jun 2024
The tenant is entitled to sublet and to assign his lease to a third party, unless this right has been expressly excluded or limited in the lease agreement, which is usually the case. Standard leases will require the landlord’s prior written consent.
A tenant who does not have his principal residence in the leased premises cannot sublet it, either in whole or in part, to a subtenant who would use it as his principal residence.
A tenant is entitled to sublet and to assign his lease to a third party, unless this right has been expressly excluded or limited in the lease agreement, which is usually the case. Standard leases require the landlord’s prior written consent.
In the case of commercial leases that are governed by the Commercial Leases Act, restrictions on the subletting or the assignment of leases don’t apply where the entire business is being transferred as a going concern. Formal notice of the proposed transfer must be given to the landlord, however, who may object on certain specific grounds.
Under the Flemish pop-up lease Decree, assignment and subletting of the pop-up lease are forbidden at any time. Under the Walloon pop-up lease Decree and the Brussels pop-up lease Ordinance, assignment and subletting are also forbidden, unless there is an express written agreement between the landlord and the tenant.
Last modified 13 Jun 2024
Parties are free to agree the amount of rent, the intervals at which it must be paid (monthly, quarterly, twice a year etc), and the timing and method of payment. Variable rental agreements are not common, except in certain types of retail lease (shopping centres, outlet malls), when there may be a link to turnover.
Last modified 13 Jun 2024
Although not mandatory, parties commonly agree on an indexation as the basis for the amount of rent, in line with the health price index. Where this is the case, the Civil Code imposes a binding method of calculation for such indexation.
Indexation can only take place once a year and, for the first time, on the anniversary of the date when the lease came into effect (which may not necessarily be the same as the anniversary of the date the contract was signed). The index to be used is known as the ‘health index’, ie a consumer price index excluding prices of products like alcohol, fuel and tobacco. This is published by the Ministry of Economic Affairs.
Any method of indexation that is more favourable to the tenant than that provided for in the Civil Code is permitted, but any method for indexation less favourable to the tenant will not be accepted by the courts.
Last modified 13 Jun 2024
In principle, leases regulated by the Civil Code and those governed by the Commercial Leases Act or the Regional pop-up regulations, are exempt from VAT. As a result, the landlord cannot reclaim input VAT. If the landlord built the leased premises or acquired a new building and paid VAT on the acquisition, this VAT is not deductible.
Since 1 January 2019, in case of new buildings[1] or substantially renovated existing buildings[2] and in case of professional tenants and landlords, an optional VAT lease has been introduced. For this provision, substantially renovated means (i) the renovation works substantially alter the essential elements of the structure of the building and/or (ii) the cost of the renovation works exceeds 60% of the sales value of the renovated building.
This VAT lease may also be used where one of the parties is either a professional tenant or a professional landlord.
In such case, if the landlord built the leased premises or acquired a new building and paid VAT on the acquisition, this VAT is deductible. This regime applies to leases regulated by the Civil Code, those governed by the Commercial Leases Act and those regulated by the Regional pop-up regulations and have a duration of more than 6 months.
Further, since 1 January 2019, all short-term leases with a duration up to 6 months, are subject to VAT.
For warehouse leases concerning existing buildings, VAT will be charged provided that (i) the warehousing space constitutes at least 50%, (ii) the commercial area (if available) may not exceed 10%. If these conditions are not met, the lease will be exempt from VAT, unless it constitutes a new building or substantially renovated building, in which case the VAT option mentioned above applies.
Last modified 13 Jun 2024
Most lease contracts contain a provision providing that all costs and rental charges, including taxes relating to the leased premises, are to be covered by the tenant. The tenant normally pays either a regular fixed amount or a provisional amount, subject to adjustment after the landlord provides the details of the costs and charges actually incurred.
Under the Regional “pop-up” regulations, unless otherwise agreed in the pop-up lease, the taxes affecting the leased premises are assumed to be covered by the rent.
Last modified 13 Jun 2024
Most lease contracts contain a provision stating that all costs and rental charges, including taxes relating to the leased premises, are to be covered by the tenant. These costs generally include the maintenance and repair of common areas used by all tenants. The tenant will pay a percentage of these costs in proportion to their share in the building/property.
Under the Walloon pop-up lease Decree, it is expressly stated that charges are considered to be included in the rent, unless agreed otherwise. Such a provision is not included in the Flemish pop-up lease Decree nor in the Brussels Capital pop-up lease Ordinance, in which case the provisions of the Civil Code apply allowing for the allocation of charges to the tenant at their actual cost, unless agreed otherwise.
Last modified 13 Jun 2024
The landlord is obliged by law to deliver the leased property to the tenant, to maintain the property in an appropriate condition for its intended purpose, and to allow the tenant the peaceful enjoyment of the premises for the duration of the lease unless agreed otherwise.
The landlord is also required to maintain the premises in a good state of repair in all respects, except for maintenance that explicitly remains the tenant’s responsibility by law. The tenant is only liable for ‘small maintenance repairs’ but these are not specifically defined. As a result, a considerable body of case law has arisen concerning what constitutes ‘small maintenance repairs’. Major repairs and the repair of damage caused by an Act of God remain the responsibility of the landlord.
The parties are, however, free to agree that all repairs should be the responsibility of either the tenant or the landlord, or to stipulate in detail which repairs are the responsibility of each party.
If the landlord is forced to perform urgent repairs during the lease, the tenant must allow this work to be done and cannot claim damages for them, or seek a rent reduction, unless the work takes longer than 40 days. The parties may, however, agree on different provisions in the lease contract.
Last modified 13 Jun 2024
Contracts for telecommunication services are usually concluded with each tenant individually so several separate telecommunication agreements may exist for one property. Contracts for utilities serving multiple occupiers are usually entered into by the landlord but the costs are normally transferred to the tenants by contractual agreement.
Under Flemish pop-up lease Decree as well as in the Brussels Capital pop-up lease Ordinance, it is expressly stated that said costs have to be borne by the tenant. Conversely, no express similar provision is included in the Walloon pop-up lease Decree, which does not prevent the parties from stipulating this in their agreement.
Last modified 13 Jun 2024
In general, the parties may agree upon the insurance policies relating to the building, its use, and the liabilities of the parties. The tenants usually pay a percentage of the insurance premiums as part of the service charge.
However, the tenant must insure all movable furnishings in the leased premises, including machinery, at his own expense against the risk of fire, explosion and water damage.
Last modified 13 Jun 2024
Are there any specific regulations and/or laws which apply to leases of particular categories of real estate, such as residential, industrial, offices, retail or hotels and what is their impact?
Office (and warehouse) leases are subject to the general provisions of the Civil Code. These also apply by default to the other types of lease agreements on any point not expressly covered by specific legislation.
Commercial leases are subject to the mandatory Commercial Lease Act or, as the case may be, the Regional pop-up lease regulations. In principle the provisions of the Commercial Lease Act and the Regional pop-up lease regulations, although they are not of a public order (d’ordre public/openbare orde), have an imperative nature (droit impérative/dwingend recht). This implies that where parties decide to deviate from the imperative provisions of the Commercial Lease Act or the Regional pop-up lease regulations, such deviation would be invalid (on that specific point). Within the Commercial Lease Act and the Regional pop-up lease regulations, the protected party is in most cases the tenant. Pursuant to a Supreme Court Judgment of 9 September 2019, it has been established that the protected party may not contractually waive his right to invoke the fact that such an agreement would be invalid. Such a waiver is only possible once the right has materialized. Only those provisions of the Commercial Lease Act and the Regional pop-up lease regulations where the law unequivocally states that parties may agree otherwise are of a supplementary nature (droit supplétif/aanvullend recht).
Last modified 13 Jun 2024