The sixth reform of the Belgian State leads to an important modification in the competences concerning leases. The lease of principal residences, the commercial lease and the agricultural lease become a regional competence. The «rest» remains a federal competence. It looks easier than it is…

The special law of 6 January 2014 concerning the Sixth State Reform, which modifies among others article 6, § 1st, of the special law of the 8 August 1980 on institutional reforms, transfers to the Regions the competence concerning (among others) the lease of goods and parts of goods intended for habitation (leases of principal residence), concerning the agricultural lease and commercial lease. Common lease law is the fourth classical pillar of tenancy law and is currently still governed in its entirety at the federal level by the Civil code, i.e. it remains a federal competence.

Common lease law, which for real estate is substantially contained in the articles 1714 to 1762bis of the Civil code, regulates in the first place the lease of real estate for which no specific legislation applies. Concretely, it concerns all offices, warehouses, industrial buildings and liberal professionals.

For certain kinds of leases of goods (real estate or other goods) intended for habitation, which were previously not covered by the law on principal residence but by common lease law, the Regions become competent too. In particular, second residences, student rooms and holiday houses are covered. As a result, the transfer of competences does not exactly coincide with the scope of the current law on principal residence lease.

Despite the special law of 6 January 2014 approaching only the «commercial lease», the transfer of competences regarding such a lease does not follow the boundaries of the scope of the current law on the commercial leases, since the Regions have become competent for the lease of real estate intended for a commercial activity, in the widest meaning of the term.

In that case, the Regions would also become competent for certain kinds of office leases which were previously governed by common lease law, namely whenever commercial operations («daden van koophandel»/»actes de commerce») are exercised in leased premises. The lease of real estate destined for professional activities that do not include commercial operations (for instance leases to liberal professions), remains a federal competence.

Furthermore, common lease law is currently applicable to the aspects of the lease of principal residences, commercial leases and agricultural leases, which are not expressly regulated by the law on principal residences, the law on commercial leases and the law on agricultural leases respectively, such as among others the rent indexation and the obligation of drafting an inventory of fixtures. If the Regions plan a derogatory regime concerning those questions for the lease of principal residences, the commercial leases and the agricultural leases, this derogatory regime will then have priority over the general federal regime.

Questions remain about the competence of the federal legislator, regardless of the kind of lease. The federal authority remains thus competent for the registration fees applicable to lease agreements. Likewise the common law of obligations or contracts, among others regarding the valid conclusion of leases (capacity, defects of consent), remains a federal matter. The same applies to the rules concerning the opposability of lease agreements to third parties and the obligation of recording leases at the mortgage office.

The Regions on their turn can impose regulations on prices in their fields of competence and are also competent to enact the necessary procedural rules.

The location of the real estate leased determines the applicable regional regulation; a choice of law applicable in another region is not possible.

The transfer of competences took place on 1st July 2014, and since this date the Regions are competent concerning the principal residence lease, the commercial lease and the agricultural lease, such as aforementioned and can adopt new regulations in each of these matters. However, until the adoption of a specific regional regulation in one of those fields occurs, current federal regulation continues to apply. When a new regional regulation will be adopted, it will be necessary to verify to which extent it will apply to lease agreements concluded previously.

We can wonder why the law of lease did not become a regional competence in its entirety and in particular why the commercial lease has become federal and not the other forms of lease agreement for professional purposes. In any case, the situation will not become easier.