Revised Commercial Lease Act for Flanders is coming!

Revised Commercial Lease Act for Flanders is coming!

Within the framework of the sixth constitutional reform, powers concerning residential, agricultural and commercial leases were transferred to the regions. On the Flemish side there is already a clear political determination to make use of these new powers. The new “pop-up” decree is one concrete consequence of this. Since 1 September 2016, the Commercial Lease Act - at least in Flanders - is not applicable “to a lease that is concluded in writing for a term that is equal to or shorter than one year” (art. 2.1° of the Commercial Lease Act). Such short-term leases are then substantively regulated in the separate decree. In this context we refer you to our earlier newsflashes.

Of possibly greater significance is the reform of the Commercial Lease Act, as this is currently being debated in the Flemish Parliament. A number of members have already taken a first step in this regard with their draft memoranda dated 8 March 2016 (NVA) and 13 April 2016 (CD&V). The stakeholders are now being consulted before going any further. On 20 September 2016, Comeos, CIB, BVA and RFB were all heard by the Committee for Economy, Work, Social Economy, Innovation and Science Policy. Voka, Unizo, the owners association Verenigde Eigenaars and BLSC will follow on 6 October 2016. Finally, on 20 October 2016 a number of experts are also being invited to offer their vision, including Dave Mertens and Ewoud Willaert from our firm.

It is still unclear just how sweeping the proposed reform will be, and what form it will take (adaptation of the Commercial Lease Act or separate Commercial Lease Decree). The two draft memoranda are still (quite) preliminary. However, it is already clear that none of the stakeholders are calling for a (thoroughgoing) reform. Inevitably, the wish lists diverge with regard to the points that do merit adaptation. Both draft memoranda are pushing more for a ´modernisation´ rather than a complete rethink of the commercial lease regulations. So a Copernican revolution would (therefore) appear to be unlikely.  

One can nevertheless distinguish a few key points on the basis of the draft memoranda. Both see a need for ´flexibilisation´ and a weakening of the (all-too) formalistic and rigid character of the Commercial Lease Act. For example, in the case of an amicable termination it would no longer be necessary for a Notary Public or Justice of the Peace to intervene, the parties would get greater freedom with regard to the (minimum) term (e.g. under the supervision of a neutral third party), the cancellation possibilities would be ´adapted´ and article 17 of the Commercial Lease Act would be abolished. In favour of the lessees one should note above all the revision being considered of the rules on lease renewal, whereby the lessee’s duty of initiative would be transformed into a right of initiative of both parties and, failing this, the lease would be automatically extended (either for an unlimited period or for the same term). The higher offer of a third party (art. 16.I.5° and 21-23) and the (compulsory) possibility of rent revision (art. 6) are also up for discussion.   

Naturally, we will keep you informed via our website about how these amendment proposals continue to evolve. For more information on this topic, you can consult Dave Mertens and Ewoud Willaert.