BELGIUM Law and Practice Contributed by: Pieter Puelinckx, Yves Moreau, Melissa Verplancke and Gauthier Callens, Linklaters
• Building insurance – landlord insurance typi - cally covers property damage from events such as water damage, vandalism, or fire. The insurance premiums are often re-invoiced to the tenants as part of the service charges. • Tenant’s insurance – such insurance covers the tenant’s business operations and civil liability, as well as any personal fixtures and furnishings. It has been observed that insur - ance policies covering business interruption have standard exclusions for events such as the COVID-19 pandemic, which could prevent the tenant to claim compensation for interrup - tions caused by such exclusions. Should the tenant plan to carry-out fit-out works on the premises, the landlord may require the tenant to take out all-risk construction insurance. It is also common that the parties agree that the insurance agreements include waiver of recours - es provisions. 6.12 Restrictions on the Use of Real Estate The premises’ use by the tenant is agreed upon by the parties. The importance of the specified use of the premises extends beyond the lease, as it may affect a range of matters regarding the property and the landlord, such as taxation con - siderations and compliance with environmental law and zoning regulations. 6.13 Tenant’s Ability to Alter and Improve Real Estate Common Law Lease Parties usually agree that tenants can carry-out reversible alterations works to the leased prem - ises, with stipulations often allowing landlords to keep or require removal of changes post- lease, sometimes compensating the tenant or not, depending on the agreement’s terms and
ensuring that, if irreversible alterations are made without the landlord’s consent, the landlord is entitled to request their removal at the tenant’s costs or to retain them without compensation
to the tenant. Retail Lease
Under the retail lease law, tenants have the right to alter and improve the premises to suit their operational needs, provided that: • they notify the landlord of the project (who can only object on valid grounds); • the total costs do not exceed three years’ rent; • the structure of the property is not perma - nently altered; and • the works do not affect the safety, the aes - thetic value or the health aspects of the property. 6.14 Specific Regulations In conjunction with the retail lease law and regional ordinances, parties to a lease agree - ment must comply with the broader legal framework governing leases (such as Civil Code provisions). With respect to residential leases, regional regulations govern the use of properties for natural persons’ occupation, including their primary residence. 6.15 Effect of the Tenant’s Insolvency Lease agreements often include clauses man - dating prompt notification from one party to the other upon the initiation of insolvency proceed - ings and granting the other party the right to terminate the lease under these circumstances. The enforceability of such termination clause depends on various factors, including the type of insolvency procedure – for instance, clauses that allow termination solely because the tenant has sought judicial restructuring are expressly pro -
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