Commercial lease agreement terms

Commercial leases are specifically designed for commercial or craft activities. To protect the tenant and their business, these contracts typically have significantly longer terms than residential leases.

Benefits and automation for this

The standard duration of a commercial lease agreement

The most common term for a commercial lease is nine years. The tenant has the option to renew this contract three times for the same period. This allows a tenant to remain in the same premises for up to 36 years. Although a longer period than nine years can be agreed upon, this requires signing the contract with a notary. A commercial lease with a term of less than nine years is only legal if it is entered into as a so-called “short term” agreement. These short term contracts have a maximum term of one year.

The “3-6-9” concept in commercial leasing

The term “3-6-9” agreement is sometimes associated with commercial leases. The standard nine-year term is divided into three cycles of three years each, also known as triennials. The tenant possesses the right to terminate the lease at the end of each three-year period, subject to six months’ notice. This means that the tenant can terminate the agreement after 3, 6 or 9 years. The owner, on the other hand, can terminate the lease only in specific cases and with one year’s notice. For more details on terminating a commercial lease, see our detailed article on the subject.

Commercial lease agreement of indefinite duration

If the tenant does not apply for renewal of the lease after the initial nine-year period, or does not do so within the statutory period, the contract is deemed terminated at the end of that period. However, if the tenant does not leave the premises at the end of the term and the landlord does not object, the contract changes to an open-ended agreement. The tenant then has the option to terminate the agreement at any time with one month’s notice. The landlord can also terminate such an agreement at any time, subject to 18 months’ notice. However, within the first three months of this notice period, the tenant can still request an extension, similar to the possibility at the end of a nine-year lease.

Short-term commercial lease agreement

The so-called “short term” leases have a maximum duration of one year. This type of contract, introduced in Belgium in 2018, is possible in two specific scenarios:

  • For entrepreneurs who are starting their business and want to test their concept.
  • For temporary or pop-up stores.

A short-term commercial lease ends automatically at the end of the agreed term. Extension is possible if both parties agree, but in no case should the total rental period exceed one year. In addition, the terms of the lease must remain unchanged. The tenant may terminate the rental agreement at any time with one month’s notice.

Efficient management of commercial properties with real estate management software

Keeping track of important dates such as lease end dates, end of three-year terms and tenant notice periods can be challenging. Property management software provides a solution to keep you on top of all the crucial dates and makes management significantly easier.

A tool like Offimac’s automates various property management tasks:

  • Checking payments and sending reminders to your tenants.
  • Calculation and notification of rent indexations.
  • Regularization of charges.
  • Preparing and sending rent invoices.
  • And much more.

This software provides a better overview of your real estate portfolio and centralizes all the necessary information for efficient management. By using such tools, you can avoid mistakes and save considerable time and money.

Features of Offimac’s real estate management software

  • User-friendly
  • Future-proof and business-secure
  • Affordable software
  • Ready-to-use solution
  • Very modern
  • Tailored rental
  • Ready-made
  • Each department
  • Customizable
  • Can be expanded
  • Many extra apps available

Source reference:

[1] Law Concerning Commercial Leases of April 30, 1951. Articles 1, 3 and 14: The Legal Minimum Duration of 9 Years and the Maximum Duration. [2] Academic Legal Journal (Belgium). Analysis of the Consequences of Exceeding the Statutory Maturity (e.g., 99 years). [3] Royal Federation of Belgian Notaries (notaris.be). The Legal Formalities and Registration for Contracts of Shorter or Longer Duration than the Standard 9 Years. [4] Specialized law firm in Real Estate Law. Case Law on Leases of Shorter Duration (e.g. pop-up leases) and their Conversion to Commercial Leases. [5] Flemish Agency for Innovation & Entrepreneurship (VLAIO). Information about the Short-Term Commercial Lease (Pop-up Decree) in Flanders. [6] Real Estate Sector Report (Belgium). Market Analysis: The Preferred Maturities of Tenants and Landlords in Commercial Real Estate. [7] Federal Public Service Economy (FPS Economy). Information on Rent Review at the End of Triennial Periods. [8] Chamber of Commerce/Business Association. Advice on Negotiating Runtimes tailored to Enterprise Activity. [9] Deloitte or PwC (Belgium). Tax and Accounting Impact of Long-Term Lease Obligations. [10] Legal Advice. The Essential Delineation between Commercial Lease and Common Law Lease at Variable Maturities. [11] Common Rental Law (Federal Legislation). Rules Concerning Leases Which By Their Short Duration (Less Than 1 Year) Fall Outside the Commercial Lease Law.

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