Why register a lease?
What is a rental agreement?
First things first: what is a lease? For tenants and landlords of property, it is essential to have a lease agreement that contains all the relevant details of the agreement. A lease agreement is a contract that binds a tenant and a landlord and governs the terms of the lease and the responsibilities of both parties.
A properly drafted rental agreement should include the rent, the rental period, the date of commencement and termination of the rental period, the payment terms and the responsibilities of the tenant and the landlord. It is also important to include any house rules and restrictions in the rental agreement to avoid misunderstandings.
It is wise to consult a legal expert when drafting a rental agreement to ensure that all important issues are included and that the contract complies with local laws and regulations. As a landlord, you can also ask for a deposit as security for any damage or loss of property by the tenant.
As a tenant, you should read the rental agreement carefully before signing and ask any questions you may have before committing to the tenancy. It is also wise to keep a copy of the rental agreement for your records.
In short, a well-drafted lease agreement is essential for both tenants and landlords of real estate. It contains all the important details of the lease and regulates the responsibilities of both parties. Consult a legal expert to ensure your lease agreement meets all requirements and to avoid any misunderstandings.
Registering the rental agreement
Registration of the lease involves the competent registration authority entering the main details of the lease into the register. For confirmation, the lease is stamped upon registration. A copy must also be made available at the registration office.
One can register a lease in several ways:
- Directly at the registration office
- By post
- Via online tools
The landlord must register the lease for rent within two months of signing the contract. If you enter into a lease for business premises (such as commercial or office space), you must also register the lease. The lease usually states which party initiates this registration and who bears the costs. In most leases, these costs are invoiced to the tenant. In principle, both the tenant and the landlord are responsible for registering the lease. This must be done within four months of signing the contract. If this does not happen (on time), both parties can be fined.
How much does registering a lease cost?
Registration for leases is free of charge. In contrast, the registration fee for a commercial or common lease is 0.2% of the sum of the rent and charges charged to the tenant during the lease period, but not less than EUR 50.
If business or office space is let with VAT, the relevant contracts must also be registered and the same rules apply. If the rental period is indefinite, the annual rent (including utilities) must be multiplied by 10 and the registration fee is 0.2% of the amount obtained.
The only exception to paying the 0.2% registration fee is the rental of stalls and parking spaces, for which only a registration fee of EUR 50 must be paid.
Example: Commercial lease for 3 years with a monthly rent of €2,500 (including VAT. The registration fee in this case amounts to €180 (0.2% x (36 months x €2,500). If no period is specified in this contract, the registration fee is €600 (0.2% x (2,500 x 12 x 10)).
A 'fixed date'
Registration gives the lease a fixed term. This means that the lease becomes enforceable against third parties. Enforceable means that the contract not only applies between parties, but is also binding on third parties, such as the buyer of a rental property. Third parties should therefore also respect it.
There are also advantages for the landlord in registering a rental agreement. If a rental property is used partly for professional purposes and partly for occupation, the tax authorities will tax each part separately. However, in the absence of registration, the entire net rental income is taxable.
Penalties for breach of lease agreement
A (limited) fine must be paid if the landlord fails to register the lease in time.
For agreements entered into before 1 January 2019 in Flanders, the tenant can immediately terminate this lease without having to pay damages or comply with the notice period. If a lease for a flat is concluded on or after 1 January 2019 and two months have passed in which the landlord has failed to comply with his registration obligation, the tenant can terminate the lease at any time without having to pay a notice period and severance compensation, but only the month after he notified his landlord.
Do you have plans to rent out? Let a Kasper & Kent estate agent assist you and enjoy professional advice and personalized support.