In a commercial lease in Belgium, charges fall into several categories. Unlike residential leases, freedom of contract prevails: the parties may freely agree on how costs are shared.
Common charges (co-ownership): when the leased premises are in a co-owned building, common charges apply. They cover the maintenance of shared areas (lobby, lift, car park), building insurance and property management fees.
Private charges: these relate solely to the leased premises. They mainly include:
- Water, gas and electricity consumed in the premises
- Routine maintenance (cleaning, minor repairs)
- The tenant’s own insurance policies (civil liability, contents)
- The commercial surface tax (where applicable)
Recoverable vs non-recoverable charges: the lease must specify which charges can be passed on to the tenant. Where the lease is silent, only the usual service charges (utilities, routine maintenance) are recoverable.
The immovable withholding tax (precompte immobilier) is the Belgian equivalent of property tax. It is a regional tax calculated on the cadastral income of the property.
Legal principle: the immovable withholding tax is payable by the landlord. The landlord receives the assessment notice and is liable to the tax authorities.
Contractual practice: in the vast majority of commercial leases, a clause provides for the immovable withholding tax to be passed on to the tenant. This clause is perfectly valid in commercial matters.
Points to consider:
- The clause must be clear and unambiguous in the commercial lease
- In a co-ownership, only the share of the tax relating to the leased premises may be passed on
- If the lease is silent, the tax remains the landlord’s responsibility
- The tenant may request a copy of the assessment notice for verification
In Belgium, the immovable withholding tax varies by Region (Flanders, Wallonia, Brussels) and municipality. Municipal surcharges can represent a significant amount.
When the commercial premises are in a shared building, common charges are allocated according to allocation keys set out in the base deed of co-ownership.
Usual keys:
| Type of charge | Allocation key |
|---|---|
| Maintenance of common areas | Co-ownership shares |
| Lift | Floor level + shares |
| Collective heating | Surface area or consumption |
| Communal water | Shares or sub-meters |
| Building insurance | Shares |
Charges specific to commercial premises: some buildings provide a distinct key for commercial units (ground floor) and residential units (upper floors). Business occupiers may be exempt from lift charges if they have no access, or they may bear a higher share for the maintenance of the commercial frontage.
Lease clause: the lease must either refer to the co-ownership allocation keys or define its own rules. Where the lease is silent, the base deed prevails.
The annual statement is the document that details the actual charges for the past financial year and compares them with the provisions paid by the tenant.
In a co-ownership: the property manager draws up an annual statement after the general meeting. This statement serves as the basis for recharging to the tenant. The landlord passes on the relevant information.
Contents of the statement:
- Itemised breakdown of common and private charges
- Total provisions paid during the period
- Balance payable (or refundable) to the tenant
- Supporting documents (invoices, maintenance contracts)
Deadlines: it is advisable to stipulate in the lease a deadline for producing the statement (usually within 3 months of the close of the financial year) and a period within which the tenant may raise objections.
Monthly provisions: most commercial leases provide for a fixed monthly amount or provisions on account. A fixed amount is not adjustable (no annual statement), whereas provisions are subject to annual reconciliation.
Charges are a frequent source of disputes between commercial landlords and tenants. Here are some rules to prevent them:
For landlords:
- Provide an exhaustive list of recoverable charges in the lease
- Submit the annual statement with supporting documents on time
- Clearly distinguish between common charges, private charges and the immovable withholding tax
- Do not pass on personal management fees (property management fees, bank charges)
For tenants:
- Review the charges clause before signing the commercial lease
- Ask for the charges history for the past 3 years
- Require supporting documents in case of doubt
- Challenge charges in writing within the period stipulated in the lease
In case of disagreement: the justice of the peace has jurisdiction to settle disputes relating to service charges. The court may order the production of supporting documents and revise the amounts claimed.
A precisely drafted charges clause in the commercial lease is the best guarantee of a smooth landlord-tenant relationship.