Transcript Renting properties in Belgium Seminar British Embassy - 20/09/2007 Benoît KOHL LL.M. Cambridge Lecturer University of Liège Solicitor (Stibbe Brussels) 04/09/2007 p1

Renting properties in
Belgium
Seminar British Embassy - 20/09/2007
Benoît KOHL
LL.M. Cambridge
Lecturer University of Liège
Solicitor (Stibbe Brussels)
04/09/2007
p1
Menu
1.
2.
Real Estate in Belgium : Bird’s eyes view
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
3.
Question time / Exercises / Cases
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PART I :
REAL ESTATE IN
BELGIUM :
BIRD’S EYES VIEW
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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
…
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p4
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.
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PART II :
LEASING RESIDENTIAL
PROPERTY
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1. Introduction – Basis
concepts
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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):
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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:
Farms and rural estate leasing
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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 the tenant’s
protection
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-
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?), THEN back to the
general contract law.
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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)
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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 with,…)
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!!! 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
d’application de cette loi ».
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2. Signing the contract :
NEW RULES
(Act of December 27, 2006
and Act of April 13, 2007)
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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.
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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.
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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.
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- 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)
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- 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) !!
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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.
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- 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 valid)
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-
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).
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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 ownership of
the property and (v) information regarding the possibilities of legal aid in
case of a dispute.
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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.
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2. Performance of the Lease
Agreement – Duties of the
parties
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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, …
- Duties relating to the maintenance (see later)
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- « 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 electricity meters,…)
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- 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)
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- 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.
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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)
See also later (maintenance)
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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)
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-
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”)
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+ 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))
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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
- what if landlord forgets to adapt (limitation of action: 1 year)?
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-
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)
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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 value of the property of
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more than 10 %)
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).
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- 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.
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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 maintain the property (see later)
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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
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-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 prove that the fire was not his
fault
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3. Consequences of non
performance of duties /
garanties
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-
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
total rent if minor maintenance’s problem)
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-
-
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.
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4. Term of the residential lease
agreements
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- 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 :
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1.
2.
Principle : 9 years
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)
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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 and 9 –
with 6 months notice + indemnity of 6 or 3 months rent)
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-
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).
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- 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
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-
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”)
…
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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…)
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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)
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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)
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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,…
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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
advisable to be advised by a lawyer.
04/09/2007
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PART III:
MAINTAINING
RESIDENTIAL
PROPERTY
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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
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2. At the beginning of the
lease contract
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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)
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!!! 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”)
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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 residence
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3. Maintenance during the
lease of the property
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-
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 residential habitability)
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-
Modifications since 2007 Act
The distinction between « réparations
nécessaires » and « réparations locatives » is
from now on imperative: impossible
to increase the tenant’s duties and to
make him responsible for some or all
of the réparation nécessaires.
04/09/2007
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-
A Royal Decree will soon be
published with a list of the « réparations
nécessaires » (ie Landlord’s repairs)
not yet published…
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Examples of « réparations »
a.
« Réparations nécessaires » (Landlord’s duty)
-
Ex: Humidity
Ex: Central warming system deficient (or very old)
Ex: Windows broken due to “unknown” reason (ex: weather,
malevolent act,…)
Ex: Roofs, walls, gutters, water pipes, electric cables, lifts, …
(repair or maintenance)
-
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BUT NOT:
if the repair is caused by the Tenant’s fault
Sumptuous works (ex: Landlord can not be asked to
replace an “Ikea kitchen” by a “3 stars kitchen”)
Entire reconstruction (ex: following fire)
Remember:
Tenant’s duty to warn the Landlord if urgent repairs
are required
If repairs for more than 40 days, indemnity for Tenant
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b.
« Réparations locatives » (Tenant’s duty)
-
Ex. Annual chimney sweeping
Ex. Maintenance of the Alarm system
Ex. Maintenance of the boiler
Ex. Repairs to doors, locks,…
Ex. Repairs to windows
Ex. Painting of the walls
Ex. Garden
Ex. Replacement of washers (of taps), joints,…
…
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QUESTION TIME
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THANK YOU
Benoît KOHL
LL.M. Cambridge
University of Liège
Solicitor (Stibbe Brussels)
04/09/2007
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