Leases
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What are the usual forms of leases?

The following are the usual forms of leases:

  • Common lease

For offices, warehouses and all real property other than retail property, principal places of residence and farmland. Leases are freely negotiable except for a limited number of restrictive legal provisions related to indexation and a prohibition of conditions subsequent relating to default.

  • Retail leases

The lease of retail premises is governed by the Retail Lease Law of 30 April 1951, which protects the tenant with respect to their right of renewal, right to transfer the lease with their business, rent review procedures and similar provisions.

  • Residential leases

The lease of a principal place of residence is governed by a specific law that protects the tenant in respect of the quality of the premises, the types of rental guarantee the landlord can request, the rights of termination by the tenant and similar provisions.

Are lease provisions regulated or freely negotiable?

For common leases, the terms are freely negotiable except (i) the indexation of the rent may not exceed an agreed yearly indexation rate linked to the consumer health index and (ii) any condition subsequent relating to default (i.e., the right for the landlord to terminate the lease due to a default of the tenant without a hearing before a judge) is prohibited.

Both retail and residential leases are highly regulated and leave little room for contractual flexibility.

Is there a maximum term for leases? Can these be extended?

Leases cannot exceed 99 years. However, they can be extended upon mutual agreement of the parties.

What are the usual lease terms?

The following are typical terms for lease agreements:

  • For common leases, the term is often nine years with possibilities of early termination after three or six years (by either party or by one of the parties)
  • For residential leases, the term is often either three or nine years (and for retail leases, nine years (both for retail and residential leases, this is regulated))

A long lease (erfpacht/emphytéose), which is a real right, cannot be shorter than 15 years.

Are there instances where tenants may demand an extension of the lease?

For retail leases, the tenant has a regulated right to request an extension, which the landlord can only refuse for specific reasons. The entire procedure of extension is highly regulated.

For residential leases, an extension may be granted due to exceptional circumstances to be decided by a judge.

On what grounds may a lease be terminated?

A landlord can generally terminate the lease when the tenant has seriously breached its contractual obligations or has been declared bankrupt. However, terminating a lease for default always needs to be done through the courts. A clause allowing the landlord to terminate a lease based on default of the tenant without obtaining a court decision is deemed null and void.

Must rents be paid in local currency?

No.

Is rent paid on a monthly basis? Is it required to be paid in advance?

In office and retail leases, rent is normally paid per quarter in advance. In respect of residential leases, rent is normally paid per month in advance. However, this can be freely negotiated.

How is rent reviewed? Are there limits to the increase in rent?

For common leases such as office leases, no rent review exists except if contractually agreed.

For retail leases, each party may request a rent review at the end of each three-year period if the value of the premises has increased or decreased by at least 15%. The procedure for a rent review request is highly regulated. The same right to request a rent review exists under residential leases if the value of the premises has increased or decreased by at least 20%.

For rent increase provisions, most leases in Belgium contain an indexation clause that links the rent to yearly indexation according to the consumer health index. No higher indexation is allowed.

What are the basic obligations of landlords and tenants?

Landlords are usually required to provide the following:

  • The quiet enjoyment of the premises (however, factual disturbance will need to be defended by the tenant whereas legal disturbance will have to be defended by landlord)
  • Structural maintenance and repair
  • Insurance - often, the landlord will, for a multi-tenant property, maintain a single insurance policy and charge premiums to the tenants through charges under the lease
  • Hidden defects warranty

The following are usually required of tenants:

  • Occupy the premises
  • Pay rent
  • Use the premises in a prudent and diligent fashion
  • Perform all maintenance that does not have to be performed by the landlord
  • Inform the landlord of repairs required by landlord to perform
  • Return the premises in the state as provided for in the survey of premises at the start, subject to ordinary wear and tear
What provisions or restrictions typically apply to the transfer of the lease by the tenant? May a tenant sublet the leased premises?

For residential leases, subletting is not allowed without the consent of the landlord.

For other leases, in the absence of any provision, a lease can be freely transferred or sublet but the first tenant remains jointly liable.

In most leases, the tenant will only be allowed to transfer the lease or sublet the premises with the prior written consent of the landlord, which consent of the landlord cannot usually be unreasonably withheld.

If the release of liability of the current tenant on a transfer is not included in the lease, the tenant will remain jointly liable with the new tenant upon the transfer of the lease to the new tenant.

In the case of a retail lease, the tenant will always be entitled to transfer the lease if the transfer is part of its business and transferred with it.

What happens in the event of destruction of the leased premises?

In the event of the destruction of the leased premises, the lease will terminate due to the loss of the object being leased. This termination is without prejudice to contractual recourse that may be available if the destruction is due to the fault of either the landlord or the tenant.

Who is usually responsible for insuring the leased premises?

For multi-tenant buildings, the landlord is usually responsible for insuring the building and will pass the premium charges to the tenants.

Leases contain mutual waivers of recourse and require the tenants to insure as a minimum their belongings and fixtures and sometimes their specific tenants' liability (for instance, in case of fire) as well. In other cases, the landlord will only insure against its their own liability and all tenants will enter into separate insurance policies. The lease provisions will prevail as to the insurance requirements of the parties.

Will the lease survive if the owner sells the leased premises?

If the lease is registered, it will normally survive the sale of the property.

If a tenant has remained in the property in the case of a retail lease or a lease of principal place of residence for more than six months, the lease will also survive but the new owner can still terminate the lease for certain specific reasons and subject to giving notice.

A clause can be included in the lease, allowing the new owner to terminate the lease, but for retail leases that will be under strict circumstances and with a one-year notice.

Will the lease survive if the leased premises are foreclosed?

The discussion in “Will the lease survive if the owner sells the leased premises?” on the survivability of a lease in the case of a sale of the property applies in the event of a foreclosure of the property.