Commercial leases provide small retailers and artisans with direct customer contact the security of premises necessary to build clientele. This protection, however, is not a free pass.
The scheme is of mandatory law, operates with strict form and timing requirements, and ties transfers to a special liability regime under which the transferring tenant often remains jointly and severally liable. This blog highlights some key points for commercial tenants.
Scope Of Application
The Belgian Commercial Lease Act applies to the lease of real estate (or a clearly demarcated part thereof) that is primarily used for retail or an artisanal activity with direct customer contact. Examples include shops, hair salons, hospitality businesses, or workshops that receive the public.
Companies without direct customer contact (such as warehouses, production environments) or purely office functions fall outside its scope. What matters is not only what is written on paper, but above all the actual use of the premises and the purpose accepted by the parties. The scheme is mandatory: provisions that undermine the protection rules can be disregarded.
Renewal Of The Commercial Lease
After an initial nine-year term, the tenant may request renewal. This request must be made within the strict window of 18 to 15 months before the end of the current term, by registered letter or by bailiff’s writ. The tenant sets out the desired conditions and states that silence shall be deemed acceptance.
The landlord then has three months to respond: to agree (explicitly or tacitly), to make counterproposals (after which the tenant must promptly bring the matter before the justice of the peace to safeguard rights), or to refuse on legally prescribed grounds, such as own use, change of purpose, or demolition and reconstruction.
An unlawful refusal of renewal may give rise to an eviction indemnity, amounting to several years’ rent. A tenant who misses the window but remains in the premises with the landlord’s tacit consent enters into a lease of indefinite duration, terminable with at least 18 months’ notice; within that period, renewal can still be requested if done between the 18th and 15th month before termination.
If the formalities or timing are not respected, the lease simply ends on the agreed expiry date. A request made too early has no effect, and one made too late obviously none either. Attention, precision, and correct timing are essential. Otherwise, the consequences are an irreparable disaster, which even the court cannot remedy afterwards.
Transfer Of The Commercial Lease
In principle, a lease may be transferred unless contractually prohibited. Specifically for commercial leases, transfer remains possible even against a contractual prohibition if it accompanies the transfer (or sublease) of the business and covers all rights under the main lease agreement. In this way, the law supports the transferability of the business.
The downside is significant: the transferring tenant remains (alongside the transferee) jointly and severally liable for all obligations under the original lease, unless the landlord expressly releases this liability. This joint liability extinguishes upon renewal; as long as the original lease continues, the landlord may turn to the transferee, the transferor, or both.
Joint liability covers the core obligations of the lease contract: payment of rent, chargeable costs (such as contractually transferred taxes and common charges), repair obligations, and damage to the leased property. Contractual damages (for example, for late vacating or breach of specific clauses) also fall within its scope.
In this situation, the landlord enjoys strategic freedom: they can pursue the most solvent party or both until the debt is fully satisfied. For the transferring tenant, the risk is real: they lose actual control over the use of the premises but remain liable for proper performance of the contract until the end of the current term, unless expressly released.
Conclusion
Commercial leases ensure security of premises, but that certainty requires precision: the scope must be correctly qualified, the renewal window strictly observed, and in case of transfer, joint liability must be contractually addressed in advance. A tenant transferring a lease should ideally negotiate for an explicit release by the landlord and secure additional guarantees from the transferee. A tenant renewing must carefully guard the deadlines and formalities.
Would you like to renew or transfer your commercial lease without blind spots or unexpected liability? Or are you a landlord confronted with such a request? Be sure to contact Vanbelle Law Boutique in good time: we will ensure that everything is handled properly and in compliance with the rules.
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