A legal framework for pop-up stores in the Brussels-Capital Region
Since 19 May 2019, the Brussels Capital Region has a legal basis for short-term commercial leases.
Pop-up stores are temporary stores open for a short period of time. They were first introduced in the United States in the late 1990's and have progressively invaded Belgium since 2010. In a study carried out in 2016, atrium.brussels, the Brussels Trade Agency suggested that three pop-up stores were opening every day in Belgium.
Temporary stores allow retailers to test new concepts or sell seasonal products. For landlords it is a way to deal with rental vacancies. The rigidity of the commercial lease legislation did not suit these situations. Landlords and lessees had to enter into legally questionable and often precarious contracts.
Until recently, only commercial leases with a (minimum) term of nine years were legally permissible for most physical stores in direct contact with consumers. The Flemish and Walloon Regions introduced legislation allowing shorter leases for pop-up stores in 2016 and 2018 respectively, but that was not the case for the Brussels Region. Given the growing number of such stores in the latter region there was an urgent need for suitable commercial lease legislation.
The Brussels legislator was mainly inspired by the Flemish and Walloon regimes. Given the highly competitive nature of the trade sector, this legislative alignment is welcome.
A commercial lease with a term of up to 1 year
It is now possible to conclude a commercial lease with a term of up to one year. The contract must be in writing.
Unless otherwise agreed by the parties, the lease will terminate at the end of the agreed period, without notice. If the parties extend the lease after the initial period, it will become a 'normal' commercial lease with a term of nine years starting on the date on which the short-term lease came into force. The lessee may terminate the lease at any time by giving one month’s notice.
The landlord is entitled to request a bank guarantee, limited to one month's rent. The lessee may carry out fit-out works in the rented premises, provided these are useful to his business and do not jeopardize the safety, hygiene or aesthetic value of the building. He must notify the landlord in advance by registered letter. The landlord has 10 working days to object. Otherwise, the works are deemed to be accepted.
Although late, this reform is a positive step. It should contribute to the achievement of the objectives set by the Region: boosting trade, combatting commercial vacancy, encouraging young entrepreneurs and enabling innovative concepts.
JulienLeclerAttorney at Law Counsel
Julien Lecler is a member of the Real Estate and the Public and Administrative Law Practice Groups in Belgium. He is a counsel in our Brussels office with a broad practice of counselling in all aspects of real estate law.T: +32 2 773 23 59 E: email@example.com
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