Key Points for a Business Takeover with Continuation of Commercial Lease

In a business takeover, continuing the commercial lease agreement with the same conditions is crucial. If the lease contract does not prohibit transfer, you can simply pass the existing agreement to the successor or buyer. Any contractual prohibition is void if the ongoing lease, along with the business, is transferred as one indivisible whole.

The lease contract and rental price affect the business takeover value: a monthly rental amount that is lower than similar premises nearby and a relatively long remaining term has an upward effect on the price. A higher rent or relatively short remaining term will have a downward effect on the business takeover price.

Generally, it's assumed that when a business is transferred, the following elements are transferred:

• client base
• trade name, any brand names
• logo
• phone, website, domain name
• materials, equipment, and inventory
• continuation of the commercial lease

Even if the lease agreement has a clause prohibiting transfer, the lease can still be transferred as part of the complete takeover of the business or business assets. Exception: if the landlord or their family occupies part of the property, any contractual prohibition on transferring the lease remains valid.

The Procedure

The entrepreneur wanting to transfer the commercial lease (or sublet the premises) must notify the owner-landlord via registered letter. If the landlord doesn't object within 30 days, consent is assumed. In case of dispute, the justice of the peace decides.

After transferring the business, the buyer becomes the new tenant under the same terms, but the seller remains liable to the landlord for obligations until the next due date. The new business operator inherits all rights from the lease, including enjoyment rights, peaceful possession rights, and lease renewal.

The landlord cannot oppose the business transfer and doesn't need to give explicit permission. Such transfer without the landlord's explicit consent means the original tenant remains liable for the lease obligations. Only if the landlord explicitly releases the former tenant and accepts the new one as the tenant, can they not revert to the original tenant for obligations.

For transferring the lease, landlord permission isn't explicitly required. However, it's wise to involve the landlord in the transfer. To make it legally valid, preferably draft a written agreement among all parties (transferee, transferor, and landlord). If the landlord isn't involved in the written lease transfer agreement, you must notify them of the transfer via registered letter. The transfer is enforceable against the landlord once notified. With other parties, issues often arise regarding the transfer date (important, for instance, in bankruptcy proceedings). Therefore, register this (transfer) agreement with the Registration Office within 4 months post-transfer.

Additional Tips

Always seek explicit landlord consent for transfer/subletting or signing a new lease, or arrange an entirely new commercial lease to replace the current one.

Request confirmation of no rent arrears at the time of business transfer. The landlord has a lien on the premises' contents.

In addition to the lease status, confirm with the following 5 certificates that all amounts to public authorities have been paid:

1. Certificate of no tax debts (request from the tax collector - Article 442bis WIB92; federal tax)
2. Certificate of no VAT debts (from VAT collector - Article 93undecies WBTW)
3. Certificate of no RSZ debts regarding employed personnel (from RSZ - Article 41quinquies RSZ law of June 27, 1969)
4. Certificate of no outstanding social contributions as a self-employed person (from your social insurance fund - Article 16ter KB No. 38 of June 27, 1967, social statute for the self-employed)
5. Certificate of no outstanding tax debts with the Flemish Tax Administration. Article 3.12.1.0.14 Flemish Codex Fiscaliteit (NEW!). (Flanders Region tax)

Bankers with a lien “Business Pledge” will only consent to the business transfer once outstanding credits are repaid. It's wise to request proof of release of the “Business Pledge” registration.

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