BELGIUM Law and Practice Contributed by: Pieter Puelinckx, Yves Moreau, Donald Krols and Astrid Laga, Linklaters
6.5 Rent Variation Leases often include an indexation clause allow - ing annual rent adjustments based on an index and formula determined by (mandatory) law. However, as a commercial gesture, the landlord may waive indexation, for a specific period of time or for the entire duration of the lease. See 6.6 Determination of New Rent for retail rent specifics. 6.6 Determination of New Rent Indexation See 6.5 Rent Variation . Renewal of Commercial Lease Under the retail lease law, tenants can request rent reductions or other lease modifications in the context of the renewal process. In the absence of agreements, a judicial proceeding is provided by law, pursuant to which the Judge of the Peace will decide on the adapted lease conditions (including rent), usually guided by the parties’ arguments and independent valuations. Additionally, at the end of every three-year peri - od, either party can seek before the courts a rent review if the property’s rental value has shifted by at least 15% from the current rent due to new circumstances. 6.7 Payment of VAT The leasing of immovable property is usually a VAT-exempt activity, unless the VAT option pro - vided in the VAT Code is applied, which is sub - ject to the following conditions (amongst others): • the building must be used for the economic activity of the tenant; • the leased premises are (parts of) a new/ substantially renovated building (ie, buildings for which VAT on construction or refurbish -
lease. In the absence of such inventory, proving damages caused by the tenant is challenging for the landlord, as the tenant will then be pre - sumed to have received the premises in the end- of-lease condition. The draft bill for Book 7 stipulates that parties must draw up an inventory of fixtures upon enter - ing the premises, no later than one month after delivery of the premises. Additionally, it becomes mandatory to draw up an inventory of fixtures at the end of the lease if either party requests it. Guarantee Parties commonly agree on a guarantee provid - ed by the tenant as security for its payment and other obligations, such as a first demand bank guarantee, parent company guarantee, or cash deposit, often set at six months’ rent. Force Majeure and Hardship The hardship principle, now enshrined in the Civil Code (under suppletive provisions), allows for contract renegotiation or court interven - tion (leading to adaptation or termination of the agreement) when unforeseen circumstances cause the performance of an agreement to become excessively onerous for a party. Real estate contracts frequently include specific force majeure and hardship clauses, deviating from standard Civil Code provisions. Rising Use of Green Clauses Landlords are increasingly incorporating “green clauses” into their standard leases, requiring ten - ants to use energy-efficient materials in their fit- out works, disclose energy usage, and adhere to other environmentally sustainable practices.
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