The "pop-up" lease contracts finally put in place in the Brussels-Capital Region
A legal framework in the Brussels-Capital region has finally been adopted for pop-ups and pop-up lease contracts.
In the last few years, so-called "pop-up" businesses steadily made their entrance.
But to rent a premise to start such a business, people stumbeled upon the fact that a short-term commercial lease was not legally secured.
Lease contracts relating to shops, restaurants, etc., concluded for a temporary period do not fall under the Commercial Lease Law of 30 April 1951, because it expressly prohibits any type of occasional or temporary leases.
Even so, there was a risk that such a temporary lease would be reclassified as a real commercial lease, hence the mandatory provisions of the commercial lease must be respected, including the mandatory minimum period of nine years.
In the Flemish Region, "pop-up" leases have already been regulated since 1 September 2016. For this matter, we refer to a previous article on our website.
After Flanders, Wallonia also provided a legal framework in its decree of 15 March 2018, which entered into force on 1 May 2018.
As from 19 May 2019, pop-ups can finally emerge without any problem in the Brussels-Capital region.
2. Main elements of the Brussels 'pop-up' legislation
A pop-up lease agreements in the Brussels-Capital Region must fulfill the following conditions:
- a written lease agreement for premises or part of it;
- the tenant is required to use the premises or parts of it for exploiting a retail business or craft, involving direct contact between the tenant and the public;
- a maximum period of one year.
The short term or temporary nature of these "pop-up" lease agreements is the most essential feature.
Lease agreements concluded for a shorter period, can be extended, without exceeding the maximum period of one year.
If it is the aim to run a business for more than one year, the conversion to a commercial lease agreement is always possible, subject to a agreement in writing of both parties.
- The law provides for a flexible cancellation plan for the tenant.
The tenant may terminate the lease at any time, subject to a notice period of one month. This termination must be served by a bailiff or by registered mail.
The parties also have the option to terminate the pop-up lease agreement at any time by mutual agreement. They may choose to terminate the agreement definitively or to establish a new lease, provided that the agreement between the parties is established in writing.
The tenant is not entitled to any compensation in case of early termination of the lease, unless the parties have agreed otherwise.
- The rental guarantee equivalent to one month's rent
The ordinance provided the tenant with a very favorable regime regarding the rental guarantee. The landlord may, but is not obliged to require the tenant a rental guarantee, but this can not exceed an amount equivalent to one month's rent.
- The ordinance does not allow the transfer of the lease or sub-lease, except for the sub-lease which is authorized by written agreement between the parties.
This new legislation meets current economic needs.
As a result, the new "pop-up" business concept, which has since become a factual situation worldwide, will have its own legal framework throughout Belgium.
This will undoubtedly encourage entrepreneurs to start a business or experiment with a new idea or concept. After all, they are not likely to be chained to a long-term commercial lease.
This will also spur the trade sector and provide a solution to the increasingly arduous vacancy rate of commercial real estate.