New Flemish Lease Decree

On 24 October 2018, the Flemish Parliament approved the new Flemish Lease Decree. In our newsletter of 26 October 2017, we already hinted at the changes that this new decree will bring about. One of the most important changes remains the decree's broad scope. On the one hand, extensive regulations are provided for the rental of a house intended as a main residence. What is new here is that the term "dwelling" now covers any movable or immovable property or part of it that is intended to be main residence. Therefore, caravans, houseboats, one or more rooms, etc. also fall under this dwelling concept. The Flemish legislator also provides a specific regulation for student rentals, co-rents, and the renting of second homes and holiday homes. A number of other important changes are discussed below.

Restriction of data that the landlord may request
From now on, the landlord may only request data that are strictly necessary to check whether the prospective tenant is financially capable of fulfilling the obligations of the tenancy agreement. This is to fight discrimination and serves to protect the tenant's privacy. For example, payslips may obviously be requested, but a (blank) excerpt from the criminal record or a doctor's certificate concerning health of the prospective tenant may not.

Obligatory inventory
From now on, for each rental agreement, a starting inventory must be drawn up, which must be registered together with the rental agreement.

Repairs
The tenant is responsible for all minor repairs, and the repairs that are necessary due to their own fault. All other repairs are at the landlord's expense. The tenant's repair obligation can be contractually excluded or limited.

Change of indexation formula
From now on, the initial index is the index of the month prior to the entry into force of the lease or the apparent rent review (whereby the most recent date applies).

Distribution of costs and charges
A general principle of distribution is introduced: only the costs and charges for the use of the house may be billed to the tenant. Other costs and charges are, in principle, borne by the landlord. The Flemish Government has drawn up a binding list of costs and charges that may be charged to the tenant or the landlord. Property tax is always entirely at the expense of the landlord.

The rental deposit
The traditional bank guarantee remains only possible for council housing. In addition to the payment into a blocked bank account in the name of the tenant, from now on, business security is also provided at a financial institution in the name of the tenant (e.g. a capitalisation voucher or a bond). Subject to the landlord's agreement, the deposit can also be paid with a personal guarantee. The deposit is in any case a maximum of 3 months' rent. It is up to the tenant to choose the form that the guarantee takes. As from 1 January 2019, the Flemish Housing Fund provides rental deposit loans under certain conditions.

Increased legal certainty in the case of co-rents
The spouse or legally cohabiting partner becomes an automatic co-renter and is thus jointly and severally liable for the obligations arising from the rental agreement. Actual cohabitants (including forms of co-housing) can jointly submit a request to the landlord to add a new person as tenant to the existing agreement. If the landlord refuses, or fails, to respond within a period of three months after this request, the petitioners can turn to the justice of the peace. In all situations of co-rental, the new tenant is not bound by obligations from the past (e.g. concerning the incoming inventory). The legislator also provides for minimum rules concerning termination and/or continuation of the current rental agreement in the event that the marriage or cohabitation is terminated.

Minimum protection for students
Every rental agreement for student housing must henceforth be concluded in writing. Just as in the case of renting, a starting inventory must be drawn up, which must also be registered. Moreover, the contract must provide for a uniform total price, which includes all costs and charges, with the exception of those for energy, water and telecommunications. The rental deposit may only be 2 months' rent. Students can change their minds up to 2 months before the start of the rental and cancel the rental agreement free of charge. If they do so after this period, they are liable to pay a termination fee of two months' rent. The landlord cannot tacitly extend or prematurely terminate the current agreement. However, students may terminate the contract early in the event of (1) the termination of their studies or (2) the death of one of the parents or any other person responsible for the students' living expenses. A two-month notice period applies. Rent transfer and subletting is only possible when students participate in exchange programmes or internships. The landlord can oppose this subject to good reasons.

Late registration
The landlord must register the agreement in three copies within two months after the signing, together with the inventory and all additions, at the Legal Security office (i.e. the former registration office) that is competent for the municipality where the residence is located. Registration is still free. If the contract is not registered within this period, the tenant may terminate the current rent without notice or compensation. The termination takes effect on the 1st day of the month after the tenant has given notice.

Death of the landlord/tenant
In the event of the landlord's death, nothing changes: the rental agreement continues to run. In the event of the death of the tenant, the current rental agreement will be automatically dissolved at the end of the second month after death. A termination fee of one month is due in addition to the aforementioned two months' rent. This does not apply if the heirs of the deceased tenant report within one month after death that they wish to continue the current rental agreement.

Entry into force
The new regulations will enter into force on 1 January 2019. Written agreements concluded before this date remain subject to the existing (federal) Residential Lease Act. However, the provisions of the Flemish Lease Decree will immediately apply to verbal tenancy agreements.

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