Are you the tenant or landlord of commercial premises in Belgium? Then it is important to know when the Commercial Lease Act applies. This Act gives tenants of commercial premises extra protection, but only applies in specific situations. In this article we explain in plain language when the Act comes into play, which conditions apply and what this means in practice.
In this article you will discover, among other things:
- what the applicable legislation is,
- what the five conditions for the application of commercial lease law are,
- and when, by way of exception, there is no commercial lease.
Applicable legislation
Article 1 of the Commercial Lease Act determines when commercial lease legislation applies. The Act applies automatically as soon as five statutory conditions are cumulatively met. This means that all five conditions must be present. If one is missing, the lease does not fall under the Commercial Lease Act.
Please note: Article 2 of the Commercial Lease Act additionally provides for a number of exceptions. Even where all five conditions are met, it may still be the case that the Commercial Lease Act does not apply. We explain these exceptions further below.
The five conditions for the application of the Commercial Lease Act
There is a lease under which rent is paid
There must be a lease agreement, written or oral, in which a rent is agreed. Even an oral agreement can therefore fall under the Commercial Lease Act, as long as payment of the rent can be demonstrated.
Example: You use a shop space and pay €1,000 rent per month. This suffices, even if it was only agreed orally.
It concerns immovable property (or part of it)
The Act applies to immovable property, both built and unbuilt. It can also concern a part of a building, for example one floor or a shop unit in a larger building.
The property is used for retail trade or by a craftsman with direct customer contact
Commercial lease law applies only where the property is used for the sale of products or services to the general public, or for activities in which a craftsman has direct contact with customers.
Example: A bakery, hairdressing salon or clothing shop falls under the Act.
A wholesaler without direct customer contact does not.
The premises are mainly intended for commercial use
The premises must be used mainly for commercial purposes. Where premises have several functions, the principal use is decisive.
Example:
- A home with a small massage practice: predominantly residential, so generally not a commercial lease.
- A shop with a small living area at the back: predominantly commercial, so generally a commercial lease.
The landlord accepts the commercial use
The landlord must accept the commercial use expressly or tacitly, when concluding the agreement or later.
- Expressly: the agreement clearly states that the premises are intended for trade.
- Tacitly: the landlord knows that the premises are used for trade and consents by taking no action.
Exceptions to the application of the Commercial Lease Act
Please note: the Commercial Lease Act does not apply in all cases, even where the five statutory conditions are met. The Act provides for a number of specific exceptions.
- Short leases (≤ 1 year)
The Commercial Lease Act does not apply to written leases with a term of one year or less.
Example:
A pop-up shop rents premises for 8 months with a written contract. In that case the Commercial Lease Act does not apply, unless the contract is later extended beyond the one-year threshold.
Please note: this exception does not apply to oral leases. Oral agreements do fall under the Commercial Lease Act, regardless of their duration.
- Immovable property exempt from land tax
If premises are exempt from land tax under Article 4, §2 of the Act of 7 March 1924, the Commercial Lease Act does not apply. This is rare, but may arise, for example, with church property or certain public buildings.
- Lease granted by a provisional administrator
Where a provisional administrator concludes a lease concerning another person’s property, that lease falls outside the Commercial Lease Act. This applies only as long as the administrator acts temporarily.
- Immovable property with a low income
For premises with a very low cadastral income, the Commercial Lease Act may not apply. The precise threshold is laid down in a royal decree. This arises, for example, with old, small premises generating little income.
- Immovable property expropriated or acquired for public benefit
Leases of premises expropriated or acquired by a public authority or a public-benefit institution fall outside the Commercial Lease Act. Think of premises owned by the government, for example for urban renewal or public infrastructure.
Frequently asked questions (FAQ)
Whoever wishes to invoke the rights under the Commercial Lease Act bears the burden of proving that the Act applies. You may prove by all legal means that the statutory conditions are met: think of bank statements of rent payments, witness statements, e-mails and text messages, invoices, and so on.
No, in principle that is not possible. If the five statutory conditions are met, the Commercial Lease Act applies automatically. You cannot contractually exclude this legislation, as it is so-called mandatory law. Even if you give the agreement a different name, commercial lease law will still apply once the conditions are met. An exception exists in the form of precarious occupancy (Dutch: “bezetting ter bede”), but this is rare and requires good reasons.
Any questions left?
Unsure whether the Commercial Lease Act applies to your situation? Or do you have another related question? Schedule your consultation!
