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Rental agreements: costs

Rent is agreed between the landlord and tenant at the start of a contract, and can only be changed under certain circumstances. This post explains more, plus gives some info on what the landlord can charge you for, and what happens if tenants don’t pay up.

Who sets the rental price?

The rental price of a property can only be set and agreed to by the landlord and the tenant. I.e. no other party (estate agent, Belgian government) has a say in how much a tenant should pay.

There is a small ‘but’: rental prices can go up or down due to indexation. See below for more information on this.

Can the landlord put my rent up?

The rental price which is agreed upon at the start of the contract is fixed for the duration of the contract. So the short answer is ‘no’, the landlord cannot suddenly increase your rental price.

Here there are some more ‘buts’:

  1. Indexation can cause your rent to go up.
  2. The landlord can increase your rent when they issue you a new contract. They cannot if they’re extending a previous contract.
  3. The landlord can change the rental price at the end of each 3 year period. But if they choose to do this there are some conditions:
    1. They need to communicate the change between the 9th and 6th month prior to the end of the 3 years.
    2. Then either the tenant agrees to the change, or they don’t and the landlord can seek legal help. But they can only do this between the 6th and the 3rd month before the end of the 3 year period.
    3. A judge will only support the rental increase if the landlord can prove that – due to new circumstances – the property is worth at least 20% more than the current rental price. If the new circumstances are that the landlord has paid to have renovation work carried out, then the landlord needs to instead prove that those works have increased the rental value by at least 10%.
    4. If the judge supports the change, then the new rental price applies from the first month of the next 3 year period.

NB the path described under number 3 above can apply in the other direction too. E.g. if as a tenant you think you are paying too much now because the property has devalued, you can apply the same approach to try and get your rent reduced. But be prepared to have some hard evidence.

What is indexation?

In Belgium rental contracts are subject to indexation. This means an adjustment (up or down) once per year to the rental price based on a price index. Rental contracts aren’t the only thing to be subject to indexation – salaries are too.

All rental contracts are subject to indexation, unless there’s a clause in the contract to say that it’s not. However it’s up to the landlord to apply the indexation, and in reality some find it not worth the effort involved.

Here’s how the process works:

  1. A rental price can be indexed at the earliest on the anniversary of the contract start date.
  2. The landlord has to communicate the change in writing to all the rental parties.
  3. If the landlord waits or forgets to do this they can still claim retrospectively, but only up to 3 months e.g. if a contract started on the 1st of January 2018 and on the 1st of May 2019 the landlord communicates the change, he can only ask for indexation as far back as February 2019, not January 2019.
  4. If the tenant refuses to pay the increase, the landlord has one year from the request date to organise a court order, after which the tenant is no longer legally bound to pay the indexation.

How much is indexation?

The increase in rent is worked out using this formula:

New rental price = (old rental price X new indexation figure, for the month before the 1 year anniversary month of the contract starting) ÷ old indexation figure, from the month before the contract was signed, even if this is months before the contract starting

The indexation figures (actually known as the ‘health indexation’ figures) are here: https://statbel.fgov.be/nl/themas/consumptieprijsindex/gezondheidsindex

Example:

A contract was signed in October 2017 and came into effect immediately. The rental price at the start was 800 euros. The new rental price as of October 2018 is 815.24 euros.

Here’s the working out:

(800 – old rental price) X 107.52 – the new indexation figure for September 2018, the month before the anniversary of the contract starting) ÷ 105.51 – the old indexation figure for September 2017, the month before the contract was signed

What other costs are there?

  • A landlord cannot legally ask the tenant to pay for either property tax or the cost of an estate agent, even if it’s included in the contract.
  • Costs need to be itemised to the tenant, so a landlord cannot ask for 900 euros to cover rent, communal space maintenance (syndicus), water etc. They need to say what portion of the 900 is the rent and what portion are for other costs.
  • If the landlord has decided at the contract stage to charge a lump sum for e.g. gas, electricity, water (rather than charging the tenant based on usage), they cannot later ask the tenant to pay extra to cover their actual usage. Likewise, if you used less than what you were charged, you as the tenant cannot recover any costs.

What if the tenant doesn’t pay?

  • The only way a landlord can handle a tenant who has not paid rent or additional costs is as follows:
    • The first step for a late payment would be a written request for payment within a given period.
    • If that period is not met then the landlord can seek legal representation to get back the money they are owed by the tenant.
    • But on top of that they can also try and get compensation and interest paid, as well as force the termination of the contract to the disadvantage of the tenant, e.g. if it’s the first year of a 3 year contract the tenant would need to pay the 3 month rent penalty as if they had chosen to break the contract themselves.
  • A landlord cannot force a late-paying tenant out of the property in any other way (e.g. by changing the locks), even if there is a clause saying that they can.
Heather
Heather is a language and travel geek at heart, having gotten the bug for it while studying German and Italian in her home country, England. After managing hotel content for a start-up in Berlin, being an Erasmus student in Bologna and writing for Frommer's travel guides while in London, she moved to Gent in 2015 for a year. Still here, Gent must have been doing something right! She's now determined to help other newbie expats settle in and build a great life here in this beautiful city. If you'd like to get in touch, send an email to heather@thesquare.gent

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