In Belgium

The penalty clause is provided for by Article 1226 of the Belgian Civil Code. In rental matters, it commonly appears to penalise:

  • Late rent payment (e.g. 50 EUR per month late)
  • Early departure without respecting the notice period
  • Failure to maintain the property
  • Late return of keys at the end of the lease

The justice of the peace has the power to reduce the penalty clause if the amount is manifestly excessive relative to the actual damage suffered. Clauses creating a significant imbalance are considered unfair and annulled.

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Warning
A penalty clause of 10% interest per month of delay would be judged unfair by any court. Penalties must be proportionate to the actual damage. In practice, judges tolerate penalties of 1 to 3% per month of delay.

Practical example

A lease in Ghent includes a penalty clause of 25 EUR per month of late rent payment. The tenant accumulates 4 months’ arrears. The landlord claims the unpaid rent plus 100 EUR in penalties. The judge considers the penalty reasonable and confirms it.