Flanders : Support for the payment of rent for commercial leases in Flanders during the period of forced closure

Contact

Lieven Peeters

Partner

Vera Van Thuyne

Associate

Updated on Monday 10 August 2020 -10am

As most shops were be allowed to re-open from Monday, 11 May 2020, the Flemish government has taken the decision on 29 May 2020 on support for the payment of rent during the period of forced closure for commercial lease agreements in Flanders.

Restaurants, cafés and non-essential shops were forced to close (most as of 18 March 2020) as a result of the COVID-19 outbreak. Since then, turnover has dropped immensely and many undertakings are struggling to survive. Nevertheless, rent was still due on the basis of their commercial lease agreement. Restaurants and cafés still have to wait for receiving the green light for re-opening (currently scheduled for 8 June 2020).

The Flemish government already announced on 8 May 2020 that they will provide a loan of maximum 2 months’ rent to the tenant, on the following conditions :

  • the landlord also waives 1 or 2 months’ rent;
  • maximum loan amount is EUR 35,000 over a period of 2 years (to be paid back within a maximum period of 18 months);
  • repayment of the loan will only start after 6 months;
  • the interest rate, including costs, will be 2% of the total amount; and
  • only tenants who were forced to close their premises and who do not have any rent arrears on 15 March 2020 can apply for the loan.

The loan will be granted by the PMV (Participatiemaatschappij Vlaanderen), the investment vehicle of the Flemish. The loan will be entered into by the tenant and the amount will be directly paid out to the landlord. The Flemish Agency for innovation and entrepreneurs (VLAIO) will be the first point of contact.

Further information will be posted here. The proposal for a model agreement between landlord and tenant can already be found here.

The official Decree of the Flemish Government of 29 May 2020 has been published in the Belgian State Gazette of 5 June 2020.

If you have questions on this topic, please contact Lieven Peeters or Vera Van Thuyne or your regular ALTIUS contact.

The above information is merely intended as comment on relevant issues of Belgian law and is not intended as legal advice. Before taking action or relying on the comments and the information given, please seek specific advice on the matters that are of concern to you.

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