Terminating commercial lease agreements

Terminating a commercial lease can be complex. This page highlights the different scenarios and conditions that apply in Belgium.

How it works

Termination by the tenant

With a standard nine-year commercial lease, the tenant has the option to terminate the agreement at the end of each three-year period. This request must be sent by registered letter or by bailiff’s writ no later than six months before the end of the relevant three-year term, the so-called “break. A six-month notice period must be observed. After nine years, the lease ends automatically, unless the tenant wishes an extension. The tenant must then act in accordance with the terms of the lease.

Termination by the owner

he owner can terminate the lease if this possibility is explicitly included in the contract. The notice period in this case is one year. However, a termination by the owner is only allowed if he or a family member wants to use the premises for a commercial or craft activity. This new activity must start within six months of the property becoming vacant. If this does not happen, the former tenant can claim damages equal to 36 months’ rent. The landlord may also terminate the lease at any time without specific cause, provided an eviction fee of three years’ rent is paid to the tenant.

Termination by mutual consent

A commercial lease can also be terminated early if both parties agree. For this termination, an authentic deed prepared by a notary public or judge is highly recommended.

Early Termination of Lease (before the end of a three-year term)

Normally, it is not possible to terminate a lease before the end of a three-year term. However, there are three specific situations in which this can be done:

• If the contract contains a clause giving the tenant the right to terminate the lease at any time.
• When there is mutual consent between tenant and landlord, recorded by a notary or court.
• The tenant transfers the lease to another party who then continues the agreement. This option is possible only if the contract allows transfer to a third party.

Consequences of selling the commercial property

The sale of a commercial property may result in the termination of the lease, depending on the contract clauses and whether the lease is registered.

• Registered contract without an eviction clause: If the registered contract does not contain a clause allowing the new buyer to evict the tenant, nothing changes for the tenant. The tenant then pays the rent to the new owner.
• Registered contract with eviction clause: If the registered contract provides that the new buyer may evict the tenant upon sale or transfer, there are restrictions. The new landlord must give notice to the tenant within three months of the acquisition and provide one year’s notice. In addition, the new owner must pay an eviction fee to the tenant.
• Unregistered contract: If a commercial lease is not registered, different rules apply:
• If the tenant has been in the property for less than six months, the new owner can evict the tenant.
• If the tenant has been in the property for more than six months, the owner can evict the tenant under similar conditions to a registered contract with an eviction clause. This means the owner must notify the tenant within three months of purchase, give one year’s notice, and pay an eviction fee.

Bankruptcy of the tenant

If the tenant of a commercial lease goes bankrupt, the trustee has the right to terminate the lease unconditionally and without notice. The landlord may receive compensation depending on the remaining amount after the liquidation of the bankruptcy. If possible, the compensation may amount to a maximum of the amount of the contractual notice fee, often six months’ rent.

Digital real estate management: an efficient solution

For owners of multiple real estate properties, with several leases and important dates, it is crucial to keep track. Although the tenant is often the active party in renewals, it is important for the landlord to keep track of crucial dates and anticipate the search for new tenants in a timely manner.

Property management tools such as Offimac offer online solutions to support owners. Offimac informs you of all important contract dates and can even automatically draft and send texts by email, letter or registered mail.

In addition to reminders for important dates, Offimac assists with various property management tasks:

• Control of rental payments
• Automatic reminders
• Reminders and calculations of rent indexations
• Automatic settlement of service charges
• Preparation and sending of rental invoices
• Exporting data for your accounting
• And more.

These digital tools increase transparency, centralize all relevant information (such as tenant contacts, cost tracking and maintenance), automate processes, save significant time and reduce management costs. Owners of multiple commercial rental properties can manage their portfolio efficiently and optimally thanks to such tools, which can lead to higher profits through improved management of costs and revenues.

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Source reference:

[1] Law Concerning Commercial Leases of April 30, 1951. Articles 3, 16 and 17: Statutory Termination Modalities and Notice Periods. [2] Academic Legal Journal (Belgium). Analysis of the Form Requirements (Notice/Signature Mailing) in Commercial Lease Termination. [3] Royal Federation of Belgian Notaries (notaris.be). The Effects of the End of the Lease on the Commercial Case and Eviction Procedure. [4] Specialized law firm in Real Estate Law. Case Law on Valid and Invalid Motives for Early Termination by the Landlord (e.g., Personal Use). [5] Flemish Agency for Innovation & Entrepreneurship (VLAIO). Practical Guide: Stopping Trading Activity and the Lease. [6] Federal Public Service Economy (FPS Economy). Information on Rent Reduction or Damages for Irregular Termination. [7] Real Estate Sector Report (Belgium). Market Analysis of the Fee for Evicted Tenants (Eviction Fee). [8] Deloitte or PwC (Belgium). Tax and Accounting Handling at the End of Long-Term Lease Obligations. [9] Common Rental Law (Federal Legislation). Distinction between Commercial Lease Termination Rules and those of Other Lease Regimes. [10] Legal Journal (Business Law). The Role of Site Description in Ending the Lease and Determining Rental Damages. [11] Chamber of Commerce/Business Association. Advice on Negotiating the Amicable Termination of Commercial Leases.

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