BELGIUM Law and Practice Contributed by: Pieter Puelinckx, Yves Moreau, Donald Krols and Astrid Laga, Linklaters
Such requirements, including the appointment of a licensed manager if the SREIF meets the relevant legal requirements, can increase the accounting and compliance costs of the SREIF, which can be above EUR75,000. 6. Commercial Leases 6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time There are two types of limited-duration real estate use rights: • property rights (eg, long-term leases/rights to build); and • personal rights (eg, lease agreements). 6.2 Types of Commercial Leases Business premises can be leased via a retail lease (in case of direct contact with clients), regulated by the 30 April 1951 law and regional decrees (essentially composed of mandatory provisions), or a common law lease for other uses such as offices, covered by the Civil Code (with generally optional provisions). 6.3 Regulation of Rents or Lease Terms Lease terms, including rental arrangements, are usually negotiable (but will depend on the business activities carried-out in the premises). Common law leases (eg, office leases) often include clauses to prohibit retail activities in the premises in order to avoid the application of the mandatory retail lease law. Fixed rent, typically indexed annually, is com - mon in Belgium, but variable rent (with a guaran - teed minimum) based on turnover is often used for hotels, shopping centres, and some food and retail businesses. Temporary contractual rent
reductions or exemptions can also be arranged between the parties. 6.4 Typical Terms of a Lease Length of Lease Term Retail leases have a minimum nine-year term with triennial termination rights granted to ten - ants (and, subject to conditions, to the landlord) as well as up to three renewal options. Special “pop-up” retail leases (regulated at the regional level) offer shorter terms. Common law leases require no specific duration but cannot be per - petual. For third-party enforceability, all leases must be registered and leases over nine years also require execution in the form of a notarial deed. Maintenance and Repairs With respect to both retail and common law leases, the Civil Code essentially limits tenants responsibility to minor rental maintenance and repairs but leases often transfer more mainte - nance and repairs responsibilities to tenants, making landlords responsible only for major repairs (eg, structure, roof, etc). Belgian leases commonly adopt usufruct rules, making tenants liable for most maintenance and repairs, sub - ject to normal wear and tear and dilapidation, while landlords are mainly responsible for major repairs on the structure of the property and its Under the current Civil Code, an inventory of fix - tures must be drawn up during the first month of the occupancy by the tenant at the latest. An inventory of fixtures is usually drawn up before the commencement date of the lease to estab - lish the original condition of the premises, which is used to assess any damages to the prem - ises and the tenant’s liability and repairs/pay - ment obligations in that respect at the end of the inherent components. Inventory of Fixtures
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