22 Sep “Pop-Up Store” Decree : The Flemish Region has changed the Act on Commercial Lease
On September 1st, 2016, the Decree of June 17, 2016 relating to short-term commercial lease, commonly called “the Pop-Up Store Decree”, has entered into force.
With this Decree, the Flemish Region has used its new responsibility regarding lease regulation which was transferred to the Regions during the last State reform.
More specifically, it is now possible, in the Flemish Region, to conclude a short-term commercial lease, for a duration of less than a year, without the Act on Commercial Lease being applicable.
Before the new legislation was drafted, temporary lease agreements were facing the risk to be requalified as regular commercial leases, which implies a mandatory minimum duration of 9 years.
Economic reality proved the legislation was too strict ; parties would often have recourse to agreements for precarious use, which are not expressly regulated and offer no legal certainty.
The new regulation sets a well-defined legal framework. It is applicable to contracts written for a duration of less than a year and is tenant-friendly. The Decree provides for a one month termination notice in favor of the tenant, while the lessor cannot terminate the contract before its expiry. The Decree also provides for specific rules regarding rental costs, the outcome of the transformations, the consequences of a sublease or lease transfer, as well as protection against eviction in case of a transfer of property.
This Decree is only applicable for contracts located in the Flemish Region. Only the future will tell if the Brussels and Walloon Region are also going to vote similar regulations. Meanwhile, parties in those regions should conclude a precarious use agreement and have the termination agreement confirmed by the court or by a notary-public, before entry into force of the agreement, in order to have a certain framework regarding the termination of the agreement.
If you wish to have more information on this topic, please contact M. Jonas DERYCKERE (email@example.com).
The Cairn Legal team.