Business Lease

Verified 05 August 2022 - Directorate of Legal and Administrative Information (Prime Minister), Ministry of Justice

A business lease is a lease for premises used for an activity that is neither commercial nor artisanal, industrial nor agricultural. It therefore mainly concerns the liberal professions. It is more flexible than a commercial lease, but it is subject to certain rules.

A business lease is a lease contract for premises in which the lessee is engaged in a non-commercial, non-agricultural and non-industrial activity. The professional lease is mainly intended for regulated professions (accountants, doctors, veterinarians, architects, lawyers...) or unregulated (such as management consultants, consultants...).

The professional lease contract must be written. It may be drafted by the parties themselves, by a notary or a lawyer. If this lease is concluded for more than 12 years, it must be drawn up by a notary.

The professional lease concerns a premises for strictly professional use. When the premises are at mixed use (i.e. including a residential and a professional part), i.e. a mixed lease which has to be signed. This mixed lease is not covered by the rules on the professional lease but by those of the residential lease.

FYI  

One commercial lease may be entered into by a liberal professional in agreement with the owner of the premises. In this case, the commercial lease rules apply.

The content of the professional lease is freely determined by the parties. It usually includes the following:

  • Information on the identity of the parties
  • Description of the room and, in some cases, of the ancillary rooms
  • Term of the lease which may not be less than 6 years
  • Rent amount, conditions of payment and revision of rent
  • Burden-sharing
  • Security deposit
  • Respective obligations of each party (payment of rent and free premises)

The lessor must attach 2 diagnoses to the lease:

Warning  

In the case of the letting of built-up buildings not intended for housing, it is not compulsory to attach a statement indicating or not the presence of asbestos.

A state of play at the entrance and exit of the tenant shall be established in one of the following ways :

  • By the landlord and the tenant, amicably and in a contradictory way, that is to say that each party is able to present its point of view.
  • By a commissioner of justice (formerly bailiff and judicial auctioneer), on the initiative of the lessor or tenant, at half the cost shared between the lessee and the lessor.

The inventory must be attached to the rental contract or kept by each of the parties.

If an inventory is not established, the tenant is presumed to have received the premises in good condition for rental repairs.

FYI  

for a lease entered into before 20 june 2014, the exit location must be established only if an entry location has been established.

The amount of rent is freely fixed by the parties. Its payment terms (monthly, quarterly, at the beginning or end of term) are specified in the professional lease contract.

The rent revision is not required by law but the contract may provide for a revision based on an index such as the index of rents for tertiary activities (ILAT) in an indexing clause.

If nothing is specified in the lease, the same rent is applicable throughout the term of the lease.

FYI  

In the case of a mixed lease, the rent is adjusted according to the rental benchmark (IRL).

The payment of a security deposit is not mandatory but the lease contract may foreseer that the tenant must pay one. In this case, the amount is freely determined by the parties.

This amount is refunded to the tenant when he leaves the premises, if he has fulfilled all his contractual obligations (such as payment of rent or certain repairs).

The distribution of charges, taxes and taxes between the owner and the tenant is freely defined in the contract.

Where the contract does not specify the burden sharing, it is the owner who must pay the property taxes, the insurance costs of the building.

Very often, the lease provides that major works are the responsibility of the owner.

FYI  

In the event of a dispute between the landlord and the tenant over the business lease, the court has jurisdiction.

The duration of the professional lease is fixed at 6 years minimum.

At the end of this 6-year period, the professional lease is automatically extended for the same duration : it is said that he is tacitly renewed. 

After 6 years, the owner may notify the tenant of his intention not to renew the contract. He must give six months' notice. In this case, he does not pay compensation to the tenant because there is no right to renewal unlike the commercial lease.

For its part, tenant can at any time notify the owner of his intention to leave the premises within a 6-month period of notice.

Such notifications shall be made:

  • Either by registered letter with request for notice of receipt
  • Either by act of commissioner of justice (formerly act of bailiff).

Warning  

in the business lease, the landlord is engaged obligatory for 6 years unlike the tenant who can break the contract at any time.

The tenant may sublet or transfer freely its lease, unless prohibited by the lease agreement.

The lessee must inform the owner of the assignment or sublease of the business lease.

A provision of the lease may lay down special conditions for the assignment of the business lease (e.g. prior agreement of the tenant's successor by the landlord or the drafting of a notarial act).

In case of subleasing, the principal tenant remains responsible to the landlord for the subtenant's compliance with the lease agreement. For example, it must ensure that the sub-tenant actually pays the rent to the landlord.

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