TRANSFER AND SUBLETTING IN BELGIUM
In Belgium, transferring or subleasing a commercial lease to a third party is possible, provided the transfer of the property is linked to the transfer of the commercial business. In principle, the owner cannot object to this. However, there are specific situations in which the owner may object to such a transfer or subletting:
- If the owner or his relatives live in part of the property.
- If the tenant has been renting the property for less than two years, or if the lease was renewed less than two years ago.
PROCESS OF TRANSFER
The assignment of a commercial lease involves several steps:
- Notification by Tenant: The tenant must notify the owner by registered mail or by bailiff of its intention to transfer or sublet. A draft of the transfer agreement must accompany this notification.
- Owner’s Response: The owner has 30 days to respond if they object to the transfer or sublease. If the owner does not respond within this period, the tenant’s request will be considered accepted.
- Tenant’s Response to Objection: If the landlord does object, the tenant has 15 days to respond.
- Agreement or Legal Mediation: When both parties reach an agreement, the transfer becomes final. If no agreement is reached, a justice of the peace will be called in to decide on the transfer of the property.
Joint and several liability: Old and New Tenant
The former tenant who has transferred his lease remains jointly and severally liable to the new tenant throughout the term of the lease, unless the landlord has released the former tenant from these obligations. This means that the landlord can turn to the original tenant in case of default by the new tenant. However, this liability expires as soon as the lease is renewed.
Commercial Rental and Sublease
Subletting of a commercial lease to a third party is allowed under the same conditions as a transfer. The duration of the sublease may not exceed the remaining term of the original lease.
If the subtenant seeks an extension of the lease, this should be done through the main tenant, who then forwards the request to the owner. However, if the subletting of the property is accompanied by the subletting of the commercial business, this is considered a transfer. In such cases, the regular renewal rules apply.
If the owner refuses to renew the contract, or if the main tenant has not taken the necessary steps, the subtenant can still apply directly to the owner. This application must usually be made on the same day as the tenant’s or owner’s refusal. Should the owner or main tenant refuse, the subtenant can take the matter to court.
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Source reference:
[1] Law Concerning Commercial Leases of April 30, 1951. Articles 10 and 11: The Statutory Provisions on Assignment and Subletting. [2] Academic Legal Journal (Belgium). Analysis of the Conditions and Consequences of Transfer of Commercial Lease to a Third Party. [3] Royal Federation of Belgian Notaries (notaris.be). The Need for Written Consent and the Formalities for Transfer. [4] Specialized law firm in Real Estate Law. Case Law on the Validity of Contractual Prohibitions on Subletting and Transfer. [5] Flemish Agency for Innovation & Entrepreneurship (VLAIO). Practical Guide: Business Transfer and the Role of the Lease. [6] Federal Public Service Economy (FPS Economy). Information on the Rights of the Principal Landlord in the Event of Subletting. [7] Real Estate Sector Report (Belgium). Market Analysis: The Impact of Flexibility in Leases on the Attractiveness of Commercial Premises. [8] Deloitte or PwC (Belgium). Tax and Accounting Aspects of Transferring Commercial Leases. [9] Common Rental Law (Federal Legislation). Distinction between Commercial Lease and other Lease regimes with respect to Assignment. [10] Chamber of Commerce/Business Association. Advice on Negotiating Assignment and Sublease Clauses in Contracts. [11] Legal Journal (Business Law). The Effects of the Transfer of the Trading Fund (including Rent) upon Sale.