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Useful info - Useful info for TENANTS !
- A m² is often not a m² in Belgium!
In case you haven’t noticed the +/- on certain letting signs, most offers from buildings owned by property developers or institutional investors are based upon gross surfaces (= technical and common areas added to the rent able surface), whilst others offer net M². Nothing wrong with implicating a certain system of course, however you should realise that the usable space between M² offered might not be the same.
- Amount of rental guarantee
It is common practice in commercial real estate for tenants to provide a (bank) guarantee equal to three to six months rent, often depending on the state of the premises that are let (basically, the amount of rental guarantee is a matter of consent between parties although six months is common practice).
- Costs of moving in
OFFICES are usually let with following fit-out: recessed ceiling with built in lightning - walls are painted - toilet & kitchenette - cable ducts or raised floor - electricity wiring - floor covering like carpet or vinyl. NOT included are computer and telephone cabling and partitioning. RETAIL OUTLETS are provided in raw state with all connections for water, gas, etc. present but fitting out of heating, toilets etc. are for the tenant. WAREHOUSES are usually fairly fitted-out with lightning, hot air blowers, etc. but much depends of the original user it has been build for.
- Indexation and rent reviews
There is an annual index called the 'health index' defined by law. Unless specified in the contract, there are no rent reviews possible with exception of retail leases where a specific procedure is described by law.
- Registration of a lease agreement.
A lease contract should be registered, the advantage is mostly to protect the tenants rights. By law, landlords have to take care of the registration of a residential lease contract on their expenses. With commercial lease contracts, traditionally the registration cost is still borne by the tenant (annual rent + 10% charges x duration lease x 0,2%).
- Service charges & Property tax
The tenant pays usually all charges related to the occupancy and use of the property (including real estate tax, regional and office tax). Only structural repairs are paid by landlord. Excluding a few exceptions, there is no VAT on rents.
- State of entry - State of exit
At the beginning and at the end of the lease a state of entry will be drawn, describing the state of the premises before the tenant can move in. The expenses of the expert are usualy equally shared between the tenant and the landlord.
- State of exit - Costs of moving out
Unless specifically agreed otherwise, the tenant usually has to reinstate the offices as described in the state of entry normally minus normal wear & tear (although some landlords remove the normal wear & tear as well from their lease contracts). Often landlords propose to ask price to re-instate and save the tenant the burden. However, with a quality and fairly recent fit-out, the landlord usually pockets the money and leave the partitioning and cabling ‘cause it is of course an important budget the next tenant can save. A smarter way is to propose the landlord a bank guarantee equal to the cost of reinstatement and wait until there is a new tenant. In case the next tenant takes over everything, there are no or only partial costs to pay.
- Types of lease contracts
The terms to rent offices, warehouses and retail outlets will be agreed in a civil lease contract. In contrary to residential or retail leases, most terms of a civil lease contract are not specified by law but are the result of 2 consenting parties. Most civil lease contracts have a duration of nine years and usually (but not necessarily) with possibility to terminate the contract every three years (for retail lease contracts by law 9 years firm for landlord but the tenant has the possibility to cancel every 3 years). Traditionally, a civil or retail lease in Belgium is also a full repair lease (the tenant will have to repair all but structural damages in the rented surfaces)
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