Corona commercial lease loans
February 2021 – In both Flanders and Brussels, the Regional Government opts for the commercial lease loan to support tenants of commercial buildings. The lessor also benefits from this, as he is certain to receive payment of at least part of the rent.
Commercial rent: continued payment or not?
The commercial rent is a fixed charge. Even in times of a coronavirus crisis, it must be paid, even if the shop could not open because of lockdown measures. Several lawsuits have certainly been brought by tenants in the course of 2020, but there is no consistency in the decisions of the various justices of the peace. Sometimes the tenant has won the case for the most part, and sometimes the landlord has won all the way. It should not be forgotten that the leasing of commercial buildings is also a commercial activity. If the tenant does not pay, it is also bad news for the landlord, who may also find himself in trouble.
The published case law shows that the justice of the peace seeks a happy medium.
It is generally accepted that it is preferable for both parties to reach an agreement regarding the payment of the rent. This agreement may take the form of deferred payment or, exceptionally, a rebate, where applicable, accompanied by an extension of the lease on the same terms.
Flemish solution in June 2020
In June, the Flemish Government put forward a solution to these conflicting interests: the commercial lease loan. In short, the commercial lease loan consists of the Flemish government advancing a maximum of two months' rent, on condition that the lessor, for its part, grants a discount of one or two months' rent.
The tenant therefore borrows one or two months' rent and the Flemish Investment Company - PMV pays the amount of the loan to the lessor. The landlord can therefore be sure that the rent will be paid.
This commercial lease loan takes the form of a two-year loan. The interest rate is 2% per annum.
A company can borrow a maximum of two months' rent per building via a commercial lease loan. The loan may also cover charges, but the total amount borrowed may not exceed EUR 35,000 for all properties combined.
The tenant has twenty-four months to repay the loan, but repayments do not start until six months after the loan is granted.
Flemish solution in December 2020
On the occasion of the second lockdown, the Flemish Government decided to re-launch the commercial lease loan system in December.
Just like the first time, self-employed persons and companies with an establishment in the Flemish Region who are forced to close down because of the lockdown can take out a commercial lease loan with the Flemish authorities. As last time, the interest rate is 2%.
However, the system has been relaxed for this second lockdown.
The contractor can now borrow four months' rent.
Start-ups can also apply.
The new maximum is set at €60,000 per building and €150,000 per business, if there are several buildings.
The loan must be repaid after two years, but repayments only start from the seventh month.
Tenants who have already obtained a commercial lease loan at the time of the first lockdown can apply for a new commercial lease loan. The total sum of these loans may not exceed the limits of €60,000 per building and €150,000 per business. A landlord who has already agreed to the remission of one month's rent the first time must not agree to a new remission of rent.
The new commercial lease loan may be applied from 4 January 2021 at the earliest and until 1 March 2021 at the latest.
Brussels
Brussels has also recently been granted a commercial lease.
The commercial lease loan is granted subject to the conclusion of a contract between the lessor and the tenant which provides for the suspension of the payment of the commercial rent (including charges) for a period of four months. It is also required that the lessor agrees to the remission of at least one or two months' rent (including charges).
The tenant may then take out a loan for the payment of a maximum of two months' rent (including charges).
The maximum amount of the loan is €25,000 for two months. A tenant with several buildings may also apply for several commercial lease loans, but the total amount of all loans together may not exceed the maximum of 25,000 euros. As such, the measure is therefore much more limited than the Flemish system.
As in the Flemish system, the loan must be repaid after two years, but the first repayment must be made after six months. The interest rate is also 2% per year.
The application deadline for the Brussels commercial lease loan is 30 June 2021, with a final payment on 31 December 2021. The measure will therefore end on 31 December 2023 at the latest (with the exception of pending disputes).
