- Real Estate, Renting and Co-ownership
- rent , rent agreement , indexation , indexation formula , landlord , tenant , rent contract , indexation rules
Analyse
All types of rent contracts (offices, commercial and retail, parking, etc.), except for housing rent, are subject to specific indexation rules that are regulated in the Belgian Civil Code.
The indexation of housing rent, however, is regulated by the regions in the same way as for other rent agreements, in the Brussels Housing Code, the Walloon Housing Decree and the Flemish Housing Decree respectively.
Indexing rents on the basis of these indexation rules will undoubtedly lead to a serious increase in rents at the current rate of inflation. The question then arises as to whether landlords are obliged to apply these indexation formulas and whether it is possible to deviate from these formulas set by law, at the contract negotiations. After all, it is often in everyone's interest to maintain a good relationship in the long term, between landlords and tenants.
1. What are the basic principles?
First, we will address the basic principles regarding the indexation of rents.
For all rent agreements, the rule is that rents must be indexed according to the following formula:
base rent x new index
initial index
The health index should be used for this purpose.
2. Is flexibility possible?
As a landlord, you are not obliged to apply the indexation. Tenants can negotiate a relaxation of the indexation rules, such as agreeing on caps.
But beware! The law provides that the indexation formula cannot be made more restrictive.
3. Conclusion
Parties, landlords and tenants, are free to agree to relax the indexation rules and thus deviate from the indexation formula downwards. This is then to the advantage of the tenants, but sometimes also to the advantage of the landlord who, in this way, can retain a good and loyal tenant for the long term.
A tightening of the indexation rules is not allowed for any of the leases.
If you need assistance in negotiating and drafting your lease, please do not hesitate to contact the specialists of Seeds of Law at info@seeds.law or +32 (0)2 747 40 07.
Would you like to learn more about this subject?
Contact our experts or telephone +32 (0)2 747 40 07
Ulrike Beuselinck
Partner
Alain De Jonge
Partner
