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Rental Law

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Termination of a short-term rental agreement

Types of leases:

There are three types of lease agreements.

  • The residential rental agreement;
  • The commercial lease;
  • The common lease;

These three types of agreements are governed by separate pieces of legislation.

For example, the commercial lease is regulated by the Commercial Lease Act.

The common lease by the General Civil Code and the residential lease by the Flemish Housing Decree.

Duration of Agreement:

The duration of each agreement depends primarily on the category into which the lease falls.

In the current blog post, we will discuss only the short-term residential lease.

What is a “short” lease?

The general rule on residential leases is that an agreement is entered into for a period of 9 years.

However, this does not mean that the lease is effectively 9 years.

After all, the residential lease agreement provides for different options for terminating the lease at different times.

However, the Flemish Housing Decree explicitly provides for the possibility to deviate from the legal rules when there is a short-term contract.

A short-term contract is any contract that is shorter or equal to three years.

Termination options:

The Flemish Housing Decree stipulates that in the case of short leases, it is possible to deviate from the legal termination options.

A short lease can be interesting in some cases both for the tenant and the landlord.

It is usually the landlord who will propose a short-term agreement.

After all, this allows the landlord to avoid committing himself for too long to a tenant he does not know.

Exclusion of any termination option:

The main concern with short leases is that the law allows the lease to exclude any termination option for the tenant.

Therefore, this basically means that the rent will have to be “paid in full.”

As a tenant, You should be aware of this before signing the lease.

Also very important is that a short-term lease should also be terminated in a timely manner by the party who wants to end it by the end date.

After all, if timely notice is not given, the lease will automatically renew and turn into a classic 9-year lease.

Therefore, we always recommend that the tenant and the landlord include the date by which notice must be given in their diaries to avoid unpleasant surprises.

Do you have questions about tenancy law?
As a tenancy law attorney we are happy to advise and assist you!

So contact us without obligation.

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Lawyer commercial lease: who, what, how?

Commercial lease

As a commercial lease lawyer, our firm assists both tenants and landlords.
After all, it is of the utmost importance to seek the advice of a specialized attorney both when drafting a commercial lease and in the event of any disputes.

If you own your own business and rent a building to house your commercial activities, then the contract will fall under the Commercial Lease Law.
In fact, in that case, the specific rules for commercial leasing will apply.

With commercial lease laws being highly technical and having far-reaching implications, it is advisable without fail to seek the assistance of a commercial lease lawyer.

This applies to both owner and tenant.

Specifically, what is considered trade rent?

The Commercial Lease Law defines its scope of application in Article 1.
According to the law, it applies to the lease of real property or portions of real property that, either expressly or impliedly from the tenant’s inception, or pursuant to an express agreement of the parties during the course of the lease, is used by the tenant or by a subtenant primarily for the conduct of a retail trade or for the business of a craftsman in direct contact with the public.
Specifically:
  • any business normally considered a store or where artisans are in direct contact with the public
  • banks, foreign exchange agents, insurance brokers, travel agents, real estate brokers, transporters … (even though these can be considered rather as service companies).
  • on-trade (unless subject to a concession agreement or brewery agreement)

Do not fall under the rules for commercial rental:

  • all liberal professions, unless they combine their function with a commercial enterprise, in which case they should be considered traders (for example, a surveyor if they also act as a real estate agent)
  • persons legally authorized to practice medicine or veterinary medicine (general practitioners, specialists, ophthalmologists, psychiatrists, … and veterinarians) who purchase pharmaceutical products with a view to selling them to private individuals, provided that they do not perform other acts of commerce and are therefore not traders (unless the contract expressly provides that the law does apply).
  • child care (under certain conditions).

What is the duration of a commercial lease?

The commercial lease gives the tenant much better protection than an ordinary lease.

The contract will be for a minimum of 9 years;

    • the tenant may terminate the contract every 3 years by registered letter (or served by bailiff’s writ), which must be sent to the landlord at least 6 months before the 3-year expiration date
    • the landlord can also terminate the contract every 3 years, but he must respect a period of 1 year before the 3-year expiration date.
      If the landlord terminates the contract, however, three additional conditions must be met.
      • It must be a written lease.
      • He must occupy the premises for trade himself or have the trade conducted by one of the persons specified in the law.
      • The possibility must be expressly provided for in the current commercial lease.
  • the tenant is entitled to three lease renewals of the commercial lease.
  • after 9 years, the tenant has the privilege over all other persons to renew the lease and continue your trade.
    You must request that renewal at the earliest 18 months and at the latest 15 months before the end of the current 9-year lease.

Thus, in total, the lease provides protection for 36 years (!!!).The landlord can, however, refuse the lease renewal under certain conditions.

Agreement and registration: as a commercial lease lawyer, we are happy to assist you in drafting the agreement

  • It is best to put the commercial lease agreement in writing.
  • The lease must be registered with the local Legal Security office of the FPS Finance within 4 months of entering into the lease.
    Both the tenant and the landlord can be fined for not complying with this obligation.
  • The lease must be notarized if a lease of more than 9 years is agreed upon.

Indexation of rent

Unlike the private lease, rent under a commercial lease can only be indexed if that possibility is provided for in the agreement.
Indexing must be done in accordance with the law, in accordance with the health index.

Review of rent through an attorney commercial lease

Triennially, the tenant or the landlord can apply to the Justice of the Peace for a review of the rent.
In this case, it must be shown that due to new circumstances, the rental value of the building is 15% higher or lower than the rent mentioned in the agreement or determined at the last review.

The appeal for review is subject to certain conditions and can only be filed during the last 3 months of the current 3-year period.

Assistance from a lawyer commercial lease

As you can see, commercial lease laws are not only technical but far-reaching.
In this sense, a poorly drafted contract can have consequences for 36 years!

Peterfreund & Associates, your Antwerp law firm.

Contact us

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Waiver of recourse: Intersection between rental law and insurance law

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Those who rent property as tenants do not assume that the property will ever be damaged.

Nonetheless, the tenant is well advised to go over all possible scenarios to hedge against any claim for damages from the owner or third parties.

Legally, tenants must insure their tenant liability.

This means that the tenant must purchase their own fire insurance.

However, the owner and tenant can agree that this is not necessary and the tenant will be covered by the owner’s fire insurance.

In that case, we speak of waiver of recourse.

Waiver of recourse in fire insurance:

If the landlord’s insurance policy includes a waiver of recourse clause, the insurer will not be able to proceed against the tenant in the event of a claim.

This is an exception to the general principle that the insurer paying out a claim is stepping into the rights of the insured.

Suppose a property burns out as a result of arson.

In that case, the insurance company will pay compensation to the owner and then the insurer will turn against the arsonist.

However, such a right of recourse is rendered impossible by a waiver of recourse clause.

There is one exception to this.

If the liable third party has its own insurance, the owner’s fire insurer will deal with the insurer of the liable third party.

If there is a waiver of recourse clause in the insurance policy then you cannot.

Liability of recourse in the lease:

Now suppose there is a waiver of recourse provided in the owner’s insurance contract but the owner fails to pay his premium.

In that case, there is no valid insurance.

Theoretically, therefore, the owner who suffers damages could possibly turn against his tenant in person.

To avoid such a risk, it is therefore advisable to include the waiver of recourse not only in the insurance contract but also in the rental agreement.

Waiver of tenant’s recourse against landlord:

On the other hand, a waiver of recourse can also be agreed upon in the other direction, specifically from the tenant to the landlord.

After all, suppose a fire starts due to the poor condition of the electricity and damages the tenant’s belongings.

In that case, the tenant will be able to turn against the landlord or the tenant’s insurance company against the landlord’s insurance company.

Then parties may choose to include a waiver of recourse.

Careful with the premium:

At first glance, a waiver of recourse for parties seems to have only advantages.

Thus, the owner will not have to worry about whether the tenant has their own insurance on the one hand, nor will the tenant have to fear any recourse in the context of any claim.

However, nothing is free.

If the owner includes a waiver of recourse in his insurance policy, the premium will be increased by the insurance company.

In general, one can assume that a premium with a waiver of recourse is 15-20% more expensive than an insurance policy without a waiver of recourse.

As a landlord, the difference in premium can possibly be absorbed by charging a higher rent.

For questions about rental law and insurance law, Peterfreund & Associates is happy to assist.