Belgium and COVID-19: Rent support scheme for commercial tenants in the Flemish Region

May 29, 2020 | Publication

Pursuant to a series of federal ministerial orders regarding COVID-19, retailers were ordered to close their non-essential shops on the Belgian territory (encompassing the Flemish Region, the Walloon Region and the Brussels-Capital Region) at noon on 18 March 2020. Although those shops were allowed to re-open as of 11 May 2020 (subject to certain conditions) and many of them have effectively re-opened, there is no return yet to “business as usual”.

On 8 May 2020, taking into account financial concerns and needs expressed by both tenants and landlords, the Flemish Government approved a limited and non-mandatory support scheme of “rent payment by loan”.

The scheme is only available, subject to conditions, to retailers-applicants (i) that closed their shops pursuant to the abovementioned governmental closure obligation, (ii) that did not have any rent arrears on 15 March 2020, and (iii) that obtained landlord’s waiver of one or two months’ rent (i.e. the rent covering April and/or May 2020). 

Under the scheme:

  • Such retailers will receive from the “Participatie Maatschappij Vlaanderen (PMV)”, which is the investment vehicle of the Flemish Government, a loan equalling a maximum of two months’ rent (covering the month(s) subsequent to the months that have been “waived” by the landlord), it being understood that the effective total loan is limited to EUR 25,000;
  • The loan will be paid by PMV to the landlord (and not to the tenant), and
  • The loan is to be paid back by the tenant to PMV within two years, it being understood that repayment of the loan only starts after six months. The loan interest rate, including bank charges, amounts to 2% per year.

While the above summarises the main conditions and features of the scheme as currently known, the official scheme and its exact conditions are still be to be determined and published by PMV (which will formally act as lender) and the banks (which will handle the retailers’ loan applications). We would expect that the official scheme will include a “territorial connecting factor”, that is to say, a clarification that the scheme’s scope is limited to commercial leases regarding premises that are physically located in the Flemish Region.

It remains to be seen whether a similar support scheme will be considered and/or adopted by Belgium’s two other Regions, being the Walloon Region and the Brussels-Capital Region.


Disclaimer: This newsletter is intended to provide information of general interest to the public and is not intended to offer legal advice about specific situations or issues. This newsletter is based on legislation, website publications and announcements as publicly available on 27 May 2020.

AKD does not intend to create an attorney-client relationship by offering this newsletter.

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