Decree regulating leasing of "pop-up" businesses approved by Flemish Parliament

Decree regulating leasing of "pop-up" businesses approved by Flemish Parliament

On 25 November 2015 we already reported to you about the new proposed decree for the regulation of the leasing of commercial premises for less than one year, the so-called "pop-up" shops.

A slightly modified proposed decree was adopted on 8 June 2016 by the plenary assembly of the Flemish Parliament.

The new decree offers a separate legal framework for leases with a term of less than one year, creating a new and separate lease regime.

Contrary to the initially-submitted proposal, the adopted text is clear with regard to its application. The decree will apply to every lease regarding the rental of (parts of) real properties for the intended purpose of exercising a retail trade or the business of a craftsman and "which is expressly concluded for a term that is equal to or shorter than one year". The adopted decree thus eliminates the vague scope of application in the initial proposal, according to which the new legal status was to apply to every lease that "due to the nature or the intended purpose of the property or according to custom is authorised for less than one year".

These vague criteria for an exclusion from the Commercial Lease Act have also been eliminated from article 2, 1° of the Commercial Lease Act. The latter Act now - solely for the Flemish Region – does not apply "to leases concluded in writing for a term that is equal to or shorter than one year" - a first step in the differentiation of the commercial lease laws for the different regions.

As soon as the term of the lease concluded under the application of the decree exceeds one year as a result of extensions, the Commercial Lease Act will apply retroactively – and indeed, from the very start of the lease.

The decree further provides for a broad cancellation possibility for the lessee, who can cancel the lease at any time, subject to observance of a one-month notice period. Due to the short term of the lease, the lessor is given no termination possibilities whatsoever.    

Time will tell whether the decree will in fact create greater legal certainty, or instead give rise to new problems.

The decree had entered into effect on 1 September 2016. It will not apply to leases that are currently already in effect.

For more information on this topic, you can consult Ewoud Willaert (author).