As a result of the COVID-19 pandemic, in the spring of 2020 the Belgian authorities ordered the closure of numerous businesses. One of the questions that arose as a result was whether the lessee had the obligation to continue paying the rent during the compulsory closure.
The unprecedented nature of the situation gave rise to various and often diametrically opposed views. For some, it was the lessor’s obligations that were impacted by the force majeure situation, because he could no longer guarantee the lessee’s peaceful enjoyment of the premises. Consequently, the lessee did not have to pay. For others, the compulsory closure had nothing to do with the lessor’s obligations, but only with the question whether the government measures had made it impossible for the lessee to fulfil his payment obligation.
Where in practice most lessees and lessors were looking (and are looking) for an amicable out-of-court solution, the first judgments of the Justices of Peace (who are competent for lease disputes) were much anticipated. With the current second lockdown fully underway, the first judgements are now gradually being handed down. After analysis of these first judgments rendered, among others, in Brussels, but also in Ghent and Bruges, the clarity one hoped for is unfortunately not there (yet) at all.
Not surprisingly, the Justices of Peace are generally of the opinion that the compulsory closure of a business affects the lessee's payment obligation. This is, however, where the parallelism between the judgements ends.
For one judge, the lockdown renders the performance of the lessor's obligation to provide the rented property to the lessee impossible and (fully) releases the lessee from his obligation to pay the rent during the period of closure (18/03/2020 - 10/05/2020).
For another judge, however, the compulsory closure only has the effect of suspending the obligation to pay. The lessee is granted a postponement of payment because he is "unfortunate and in good faith", but eventually he must pay the rent for the period of the closure. The same solution can be found in the decision of yet another Justice of Peace, despite the fact that he points out that the lessee business consist of dozens of restaurants, that a takeaway service could have been organised and that it did not appear that the lessee was in financial difficulties.
While it turns out that the answer to the question of whether the lessee must continue to pay can be both “no” and - basically the opposite - “yes, but later”, there is also an intermediate solution: “yes, but not everything”. This was, for example, the final conclusion of the Justice of Peace of Bruges, who reduced the rent for a property in a busy shopping street, which, incidentally, had no obligation to close, to 25% for the months of April and May 2020, apparently to the same degree as the decrease of the shop’s turnover as a result of the epidemic.
It is clear that there is still a long way to go to the situation of legal certainty that the entrepreneurs require in these trying times. One will undoubtedly have to wait a while for the courts to adopt a more unambiguous position, all the more so that, unfortunately, the courts until now have not only come up with different final solutions, but also because the correct underlying legal analysis that is needed to come to the right solution appears to be lacking.
Nevertheless, it is clear that the Justices of Peace are looking for an equitable solution and that judgments rendered so far do in fact contain valuable elements and insights. We are closely following the developments in this area and will be happy to guide you through this.