Renting properties in
Belgium
Seminar British Embassy -
20/09/2007
Benoît KOHL
LL.M. Cambridge
Lecturer University of Liège Solicitor (Stibbe Brussels)
Menu
1.
Real Estate in Belgium : Bird’s eyes view
2.
Residential leases agreements
- Overview of the Act of 1991, as modified by the Act of 2007 - Rules relating to the conclusion of the contract
- Duration – Rules for termination
- Rent – Rent review – Costs (“charges”) related to the property
- Assignment
- Break clauses
- Maintenance Issues
PART I :
REAL ESTATE IN
BELGIUM :
Where do I find the Law in
Belgium ?
-
Real estate mainly governed by the Civil Code
(« Code Napoléon » - 1804)
-
Other relevant statute law includes:
Planning law,
Standards for residential habitability,
Consumer Act,
Construction of dwellings Act (« Loi Breyne ») Mortgage credit Act
How to find his way in the
Civil Code ?
-
2280 articles
-
Lease contracts (movable &
immovable): articles 1708 ff.
-
Contracts for lease of immovable
property : articles 1714 ff.
PART II :
LEASING RESIDENTIAL
PROPERTY
1. Introduction – Basis
concepts
Note:
-
Articles 1714 to 1762bis : General
provisions for any lease agreement
related to an immovable property
-
Three specific Acts governing 3
specific lease contracts (inserted
in the Civil Code):
1. The Act of 20 February 1991:
Residential Leasing
2. The Act of 30 April 1951:
Retail trade leasing (direct contact
with customers)
3. The Act of 4 November 1969:
The Act of 20 February 1991 on
residential leasing : general
comments
-
Act aimed at guaranteeing housing security
of tenants in private lettings and minimum
quality of these lettings
-
Consequence : All articles of the 1991 Act
are « imperatifs », i.e. no derogation
possible by agreement (by clause in the
contract) contrary to the tenant’s interests.
-
Possible however to increase by contract
-
Where the 1991 Act is not applicable OR
where the 1991 Act gives no answer to a
specific issue (for instance: what are the
landlord/tenant’s duties in connection
with the maintenance of the property),
THEN back to the general provisions
applicable to any lease contract
-
Where these general provisions give no
answer (for instance : do I have the right
to suspend the payment of the rent?),
When does the 1991 Act
apply?
-
Need to be a lease
-
Need to be the tenant’s main
place of living
-
Need to be an individual
(not a company)
Is the 1991 Act applicable to lease
contracts where the tenant is an
Embassy ?
No !!
However it is possible to make the 1991 Act applicable
to these contracts by specific clause to be
inserted in the contract.
Advantage : the tenant (i.e. the Embassy) is far more
protected.
Drawback : more formalities (ex: registration of the
agreement, strict notice periods to be complied
!!! The clause must be explicit.
Example of such a clause:
« Les parties déclarent expressément
soumettre le présent contrat aux
dispositions de la loi du 20 février 1991
sur la bail de résidence principale (telle
que modifiée par les lois ultérieures),
même si le présent contrat, pour
quelque motif que ce soit, ne rentre
normalement pas dans le champ
2. Signing the contract :
NEW RULES
(Act of December 27,
2006 and Act of April
13, 2007)
a. Public Lease
Announcement
Each public lease announcement shall
mention both the rent and the shared
costs of the property. Local
authorities of the town where the
property is located may impose fines
up to EUR 200 for infringements on
this obligation.
In addition, the local authorities may oblige the
landlord to provide them with detailed
information concerning the property at
least 14 days prior to the signing of a lease
agreement.
If the landlord does not provide this information
on time, a tenant will subsenquentely have
the right to annul the lease agreement by
means of a registered letter to the landlord
up to 10 days after signing of the contract.
b. Duty to register the lease
agreement
-
Previously, any real estate lease, sub-lease or
transfer of lease in Belgium was already
(supposed to be) submitted to registration
entailing the payment of a registration fee.
But no sanction for the Landlord
- New rules, however, are now applicable for
residential leases as to deadlines, the persons
subject to the obligation, the amount of fees
and penalties.
- Deadlines : From now on, residential lease
agreements must be submitted for
registration within 2 months (4 months for
other lease agreements)
- Person subject to the obligation: Residential lease
agreement must now be registered exclusively
by the Landlord (other lease agreements: Both
parties were jointly held to proceed with the
registration – even if the agreement usually
compelled the tenant to do so)
- Amount of fees: Registration of residential
lease agreement will now be for free
- New civil sanction introduced : any non
registered residential lease agreement may
be terminated by the tenant at any time
(i.e. the normal notice period is 3 months)
and without penalty (i.e. normally a
penalty equal to 3, 2 or 1 month’s lease is
payable, whether termination occurs during
the 1., 2. or 3. year) !!
c. Inventory of fixtures
(« état des lieux »)
- Previously, it was not compulsory to provide for an
inventory of the property. In such a case, if no
inventory had been drawn up, the law (civil
code – art. 1731) presumed that the tenant
had received the property in the state where
this property was left at the end of the lease
agreement (provision in the advantage of the
tenant) – NB: It is open to the landlord to try
to proof against this presumption.
- From now on, a detailed inventory of the
property should be drawn up, either before
or during the first month of residence, in the
presence of both the landlord and the tenant.
- This inventory has to be attached to the lease
agreement, and has to be registered
together with the agreement.
- N.B. : 1) this new provision applies for any lease
contract (not only residential lease).
2) No specific sanction if the inventory is not
drawn up (old sanction (presumption) still
-
What if the Landlord refuses
to draw up the inventory ?
→ Can be compelled to do so
by the Judge, who will
nominate an expert (in
principle, shared costs).
d. Instructive document
An instructive document has been developed by
means of a Royal Decree, which has to be
attached to the lease agreement. This
document will contain information relating to
the following topics :
(i) legal requirement for a written lease agreement, its
registration and the costs thereof; (ii) regional rules regarding health, safety and fitness for habitation of places of residence; (iii) rules regarding the duration of a lease agreement; (iv) the possibilities with respect to the revision of the lease agreement, the indexation of the rent and the additional costs, the repair of damages, the termination of the contract and the change of
e. Security deposit : new
rules
The 2007 Act foresees 3 different ways in which a tenant may provide a security deposit:
- The tenant may open a personal account in his name: in this case, the maximum amount of security deposit is 2 months’ rent
- The tenant may provide a bank guarantee: in this case, the maximum amount of security deposit is 3 months’ rent
- (Other option : in case of financial difficulties, a tenant may ask as Social Service Department (CPAS) to provide a bank guarantee on his behalf)
In any case, the security deposit may only be used after the termination of the lease agreement or by court order.
2. Performance of the Lease
Agreement – Duties of the
parties
a. Duties of the Landlord
a.1. General Law of Lease contracts
- NB: general lease contract law: it is allowed to
deviate by a specific clause in the agreement
- Duty to deliver properly the property , i.e.
remove the « obstacles de fait ou de droit »
that could hinder the entry in possession
ex: works have to be finished, …
- « Guarantee duty » (« obligation de
garantie »):
- against any (hidden) defects of the good (see
maintenance)
- against any « trouble de jouissance »:
1. caused by the landlord : ex
- landlord hires a caretaker/manager of the building; caretaker’s negligence that leads to a burglary → builder may be liable for his caretaker’s fault.
- landlord ask a building contractor to do some extensive repair, … ; excessive noise, dust → landlord must indemnify (even if the purpose is to increase the comfort of the property : ex. : installation of a lift, modification of central warming system (if this results in works, or increase of costs for the tenant). However, must be admitted by the tenant any minor works (ex: new door, installation of individual
- one tenant does not pay the water/electricity costs and the
landlord stops to provide water/electricity for the entire building : not allowed
- landlord can not transform the real property until the end of the lease agreement (but for with the tenant’s agreement).
- landlord can not decrease the level of comfort existing at the beginning of the lease agreement (ex: suppression of parking
places, suppression of the garden, suppression of the caretaker (if agreed),…)
- It is allowed for the landlord to do any urgent repairs , even without the tenant’s agreement: for these works, the tenant will not have indemnity if the duration of the works is less than 40 days (art. 1724 Civil Code)
- IN NO CASE, the Landlord can enter in the property without the tenant’s agreement (even for repairs, visits before the end to the lease agreement (with potential new tenants); If the tenant refuses the access without legitimate motif → ask authorization to the Judge.
- contracts with to 2 tenants at the same time
- landlord contracts with a tenant which is a competitor of the tenant of his neighboring flat
2. Caused by 1/3 parties: ex:
- A third party pretends to have a right on the property –
- !! Not for third parties’ “troubles de jouissance”. (Ex: noisy neighbor, neighbor’s dog,…) : the tenant must react himself.
a.2. Landord’s specific duties with
respect to residential lease
Specific duty: the landlord is responsible for the upkeep of the property, in order for the property to meet the
standards for residential habitability (defined by law – Royal Decree 8 July 1997 - !! the policy of setting the standards for habitability is partially in hands of the « Régions » - ie Flanders, Walloon Region and Brussels) Indeed, other leases often imposes to the tenant to bear
some of the obligations to upkeep the property (with the exclusion of works which relate to the soundness of the property)
What are these standards of habitability ?
-
Size of the place of living : at least one privative
“living place” (bathrooms, toilets, corridors, …
may be common to several privates places of
living)
-
No defects that can have an negative impact on
health or safety (ex: high level of humidity (but not
if the humidity is caused by the tenant’s behavior))
-
“Natural light”: all places of living and bedrooms
must have a source of natural light (size: at least
1/12 of the roof size) + aeration in bathrooms,…
(size : at least 0,1 % of roof size)
-
Minimal equipment : point of potable
water (warm water not required);
private wc (or 1 common wc for 5
persons), minimal electrical system, …
-
Possibility to lock the property
-
…
→ Minimal requirements (“minimal human
dignity”)
+ REGIONAL RULES
-
RENT PERMIT to be obtained by the Landlors
-
Conditions for obtaining the permit may differ from
one Region to another (ex: Need to obtain the
attest from the Fire Inspection Dept.);
-
For different kind of properties :
- all properties in Flanders (but is not required: only helps the Landlord to proof that his property meets the health and safety conditions),
- only small size properties (living space < 28m² and student rooms) in the Walloon Region and Brussels (not possible to rent such
properties without permit)
-
Sanction if no permit : contract might be void.
-
Other Regional rules (ex.: Fire detector (new rule
in Walloon Region since Decree 21/10/2004))
b. Duties of the Tenant
1. To pay the rent (!)
- Indexation clause (mandatory formula):
basis rent x new index
basis index
N.B: - index = published in the official Gazette
(Moniteur belge), by minister of Economy
-
Specific rules for residential
lease (1991 Act):
NO INCREASE of the RENT possible UNLESS
a. indexation possible even if nothing is provided in the agreement (exception: if the agreement expressly
prohibits the indexation); BUT the landlord must ask it expressly (by letter), maximum once a year. If the
landlord forgets the anniversary date of the agreement, he can ask the indexation later, but there will be no
indexation accepted for the previous month’s rent (with exception for the last 3 month’s rent before the date of the landlord’s letter, on which indexation will be due)
b. when the judge accepts a prorogation of the
agreement in case of exceptional circumstances, he may accept an increase of the rent if it is fair.
c. possible to increase the rent every 3 years
- c.1) by agreement between the parties (but only
between the 9th and the 6th month before the end of
each 3 years-period – if not between these dates, parties are free to considered no to be bound by the agreement on the increase (or decrease) of the rent)
- c.2) in execution of a court’s decision (ex: in case of new circumstances, if increase of the « normal rent
value » of the property of more than 20 % / or in case of works performed on the property which increase the
2. To pay the « charges ».
- lump sum or effective charges (choice of
parties)
- separate calculation (therefore, no
indexation possible for the charges);
- the landlord is under a duty to produce
documents proving the effective costs
(rule not applicable in the case of a lump
sum).
- in the case of a flat in a building with multiple flats where a « syndic » has been nominated, the landlord’s duty is
simplified (not necessary to send documents proving the effective costs – summary is enough + possibility for the tenant to consult the documents at the syndic’s office)
- specific rule for residential leases:
1. The annual real estate tax (precompte immobilier) can not be paid by the tenant (ie cannot be included within the « charges »)
2. Reminding : 2007 Act : Each public lease announcement (only for residential lease) shall mention both the rent and the shared costs of the property. Local authorities of the town where the property is located may impose fines up to EUR 200 for infringements on this obligation.
3. Duty to use the property as a « bonus
pater familias » (idea of good faith).
examples:
- prohibition to have activities that deteriorate the property (of course !)
ex: - no occupation of the property, without care for aeration, warming, surveillance,…
- dangerous (or dirty) animals,… - no care of the garden
- duty to warn the landlord if his intervention (urgent repairs, ..) is needed
- prohibition to modify the property (save little « aménagements » that do not properly modify the property : ex: painting, wallpaper,
bathroom/kitchen’s accessories…)
4. Duty to furnish the property
- this provides a guarantee for the landlord - exception for property leased with furniture
5. At the end of the agreement, duty
to restore the property in its
previous state
- utility of the inventory (« état des lieux »), from now on, in principle compulsory (2007 Act)
- see above : proof of the state of the property / presumption when no inventory has been drafted
-Costs of the inventory : shared between
parties
- Disagreement : the judge can nominate
a judicial expert whose inventory will be
binding for both parties.
-Special issue in case of fire: the tenant is
presumed to be liable, save as he can
3. Consequences of non
performance of duties /
garanties
-
Maintenance, repairs, defect
guarantees : see later
-
!! Specific protection: « exception
d’inexéctuion » : right to suspend
your duties if the other party is in
fault
- ex : right to suspend the payment of the
price if landlord does not maintain
conditions: good faith (not suspend the
-
If one party fails « seriously » to perform his
duties (landlord : provide the property,
maintain, ../ tenant : pay the price, maintain,...),
the other one may ask the judge for the
« resolution » of the agreement + indemnities.
-
! Necessary to go to court the ask for the
resolution (never automatic in lease contract law).
-
NB: Frequent penalty clause (« clause pénale ») :
if tenant does not pay the rent, he is liable to pay
interest
-
NB: Possible for the parties to increase/decrease
their legal duties (save for the matters regulated
by the 1991 Act) ex: possible to make the tenant
responsible for all the repairs – see later.
4. Term of the residential
lease agreements
- If the lease does not fall within the
scope of the 1991 Act : parties are
free to agree on the term (ex: 1
month, 1 year, 3-6-9 years,…): the
contract may provide for a notice, or
may exclude it.
- If the residential lease falls in the
scope of the 1991 Act : Extremely
complex regime :
1.
Principle : 9 years
2.
Main exception : short term
lease (3 years max.)
! : short term lease may be renewed only 1
time with the total duration being no
longer than 3 years (2nd renewal =
automatically becomes a 9 years lease)
! : Notice of leave at least 3 months before
the expiration date of the lease (if not :
automatically becomes a 9 years lease)
3. Possibilities to put an end at the lease
agreement (without other party’s fault)
-
End by the landlord : only:
- a: for personal occupation of the property (at any time, with 6 months notice; NB: the landlord must really occupy the property: if not, he must pay an indemnity = to 18 months rent)
- b: for heavy works to be carried on in the property (only at the end of year 3, 6 and 9 – with 6 months notice ; NB landlord must really perform the works announced: if not, indemnity = to 18 months rent) - c: without any reason (only at the end of year 3, 6
-
End by the tenant:
-
At any time, with 3 months notice
-
+ indemnity if he leaves the 1, 2 or 3 year
( indemnity of 3 , 2 or 1 months rent)
-
+ « contre-preavis » (if the landlord puts
an end to the agreement – with 6 months
notice - , the tenant may abbreviate this
notice by giving a 1 month notice to the
Landlord) (ex: if he has found another
property in the meantime).
- consequence : lease agreement does
not automatically expires on year 3, 6
or 9
- NB : If the tenant stays in the
property after year 9, automatic
renewal for a new 3-6-9 lease
agreement
- NB: In any circumstance of resiliation
by the Landlord, the Tenant may ask
the Court for a extension of time of the
lease agreement (« prorogation »), in
the case of exceptional circumstances
-
examples of exceptional circumstances
-
Pregnancy of recent chirurgical operation
-
Age of the Tenant (90-95 years old,..)
-
Delay in the construction of the Tenant’s new
house
-
But not :
-
Delay in the construction of the Tenant’s new
house, caused by Tenant’s fault
-
Medical situation of Tenant, but not “exceptional”
-
Difficulty to find a new property to rent (not
“exceptional”)
-
…
5. Assignment of the
contract –
Sub-lease agreements
1. Assignment to another tenant
: only with the Landlord’s
agreement (the tenant is
« released » - no duty to pay
the rent, to maintain…)
2. Sub-Lease Agreements:
-
Only for a part of the real property
-
Only with Landlord’s agreement
-
Terms of lease and sub-lease must
be the same
-
The Tenant stays liable towards
the Landlord for the entire real
property (no direct relationships
between landlord and sub-tenant)
6. Sale of the real property
which is occupied by the
tenant.
If the lease agreement has been registered
(see above 2007 Act): the new Landlord
is bound by the lease agreement
If not : new landlord can put an end to the lease agreement (with 3 months notice if the Tenant has been living in the property for at least 6 months)
7. End of the Lease
Agreement: summary
-
Mutual agreement between the parties
(always possible)
-
Resolution because of the other party’s
fault (landlord does not maintain, tenant
does not pay,…)…
-
Each party can put an end, but following
the rules regarding notice periods,
indemnities,…
8. In case of
disagreement…
-
Local judge (« juge de paix ») has
exclusive jurisdiction to deal with all
aspects of lease contracts’ claims.
-
Not compulsory, but strongly
PART III:
MAINTAINING
1. Basic principles
-
Difference to made between :
-
Situation of the property at the beginning
of the lease contract: only Landlord’s
liability
-
Duty to maintain the property during the
lease contract: both parties may be liable
with respect to maintaining the property
2. At the beginning of the
lease contract
REMEMBER
The Landlord must “only” provide for a
property that meets the minimal
standards for residential habitability.
Initially, these minimum standards were
mentioned in the Royal Decree of 8 July
1997
Since then, the three Regions have received
jurisdiction on habitability matters (mainly
to precise or to add some standards to the
minimum federal standards – see also the
requirement to obtain a rent permit)
!!! All These « standards » of
habitability are minimal ones
(minimum of habitability.
See examples above.
By Contract, parties may increase
these standards (Remember:
“état des lieux”)
Remember (2007 Act) :
- From now on, a detailed inventory of the
property should be drawn up, either
before or during the first month of
residence, in the presence of both the
landlord and the tenant.
- This inventory has to be attached to the
lease agreement, and has to be
registered together with the agreement
- Instructive document to be annexed to the
contract : regional rules regarding health,
safety and fitness for habitation of places of
3. Maintenance during
the lease of the
-
State of the Law before the 2007 Act:
1. The Landlord is responsible for the « réparations
nécessaires » (necessary repairs, i.e. necessary to let the
Tenant use the property in conformity with the contract terms)
2. The Tenant is responsible for the « réparation
locatives » (lease repairs, i.e. repairs which result from
the normal use of the property)
3. BUT SUPPLETIVE LAW: possible (and very frequent) to increase by contract the Tenant’s duties (but for the Landlord’s responsibility for the upkeep of the property, in order for the property to meet the standards for
