16 January 2024

Novelties In The Brussels Residential Lease Law

Recently, significant changes have been introduced in the Brussels residential lease law. The new legislative developments aim to enhance tenant...
Belgium Real Estate and Construction
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Recently, significant changes have been introduced in the Brussels residential lease law. The new legislative developments aim to enhance tenant rights, provide a correction on rent indexation, and impose stricter regulations on eviction procedures. This article explores the key amendments that owners, tenants, and legal practitioners should be aware of.

Preferential right of the tenant

The ordinance enacted on 28 September 2023, which came into force on 1 January 2024, grants tenants a preferential right in the event of the landlord selling the property. Applicable to residential leases of 9 years or more, this right extends to the tenant's immediate family, including children, spouse/legal cohabitant, and the children of the spouse/legal cohabitant residing in the property. A preferential right gives the tenant the right, when the landlord wishes to sell the property, to be offered the property first and negotiate the terms of its possible purchase.
The landlord must notify the tenant of the intention to sell and the right of preference via registered letter with acknowledgment of receipt. This letter constitutes an offer to sell, and must contain the identity of the seller, the address of the property and its description, the price and the conditions of the sale, as well as any real rights encumbering the property. Failure to respond within 30 days results in presumed refusal of the tenant. If accepted, the tenant must prove residence, and the actual transfer of ownership and payment occur on the day of the authentic deed. If the seller subsequently offers more favourable conditions than the initial offer to a third party, the seller or notary must send a new offer to the tenant, who has 7 days to respond.

Violation of this right entitles the tenant to take legal action, seeking subrogation against the third-party buyer. Successful actions result in the tenant becoming the new property owner, with a one-year prescription period from the date of sale transcription.

Certain exceptions to the preferential right apply, such as the sale to direct family members, sale of rights in rem (bare ownership, right of usufruct, building right etc), and block-sale transactions involving multiple residential units (no right of preference on each unit).
The preferential right only applies to decisions to put properties up for sale sales initiated after the entry-into-force of the ordinance (i.e. 1 January 2024).

Correction of the indexation stop

Since October 2022, regions have introduced a rent indexation limit, linked to the energy efficiency of the leased property. The three regions have opted not to extend this measure.

Consequently, as of 1 October 2023 (Brussels and Flanders) or 1 November 2023 (Wallonia), contracts that were subject to an index freeze can be indexed again regardless of their energy performance. To prevent double indexation, the regions have introduced mechanisms to maintain the effects of the temporary freeze in the indexation calculation.

These mechanisms are as follows:
" In Flanders and Brussels: Starting October 2023, if the EPC / PEB is D, E, or F, indexation is applied with a correction factor.
" In Wallonia: Starting November 2023, if the PEB is D, E, F, or G, indexation is based on a new formula.

(Base adjusted rent x new index)
Adjusted base index

- Base adjusted rent: rent adjusted between 1 November 2022 and 31 October 2023;
- Adjusted base index: health index of the month preceding the lease anniversary date between 1 November 2022 and 31 October 2023.
These measures aim to maintain the effects of the temporary freeze in the calculation of indexation, preventing landlords from imposing retroactive adjustments.

New rules for eviction procedures

New rules were introduced for eviction procedures in Brussels, by the ordinance of 22 June 2023, which came into effect on 31 August 2023. This ordinance carries significant implications for practitioners, particularly landlords, with the legislative aim of restricting and preventing evictions during the winter months.

The winter moratorium dictates no evictions from 1 November to 15 March.
However, the legislator has outlined four exceptions to this principle:
- If the tenant proposes a rehousing solution or has already vacated the premises;
- If the dwelling is unhealthy or unsafe;
- If the tenant's behavior is the cause of endangerment;
- If the landlord is in a situation of force majeure (e.g., personal occupation without rehousing solutions).

The Council of State has rendered an opinion on this ordinance, deeming the winter moratorium inconsistent with the right to property. A legal challenge is anticipated.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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