Commercial tenancy law

Leases for ‘retail space’ / 290-business premises

Commercial tenancy law is divided into two categories, i.e. retail space and office space. Different lease regulations apply to these categories. Shops, restaurants, and hotels, among others, fall under the regime of retail space. This space must be accessible for the delivery of goods or services to the public. Special rules apply to protect the lessee, including the duration and termination of the lease, the trial period (a lease with a short duration), business succession, and the rent, as well as disputes related to these aspects.

Leases for ‘office space’ / other business premises

This category of tenancy law concerns, for example, office space or a factory space. The law only includes limited regulations for these types of business premises. The rules of security of tenure for this category of business premises are very different from those for retail spaces. There is actually no security of tenure, but only protection against eviction. This means that a lessee can only be forced to vacate the leased property two months after the end of the lease. This period can be extended upon the lessee’s request and with the court’s approval.

General provisions / ROZ models

In general, the main provisions are stipulated in the lease, and other relevant matters are included in the general provisions. Many articles and provisions in a lease refer to the general terms and conditions. The ROZ Real Estate Council of the Netherlands has developed standard leases for both types of business premises, accompanied by corresponding general provisions. The use of these models enables both lessors and lessees of property to achieve transparency and clarity about their rights and obligations at the beginning of their lease relationship. These models are widely used in the property practice. Our tenancy lawyer will address all of your questions about leases and general terms and conditions.

Defects

A defect is a certain condition or characteristic of the rented property that diminishes the tenant’s enjoyment of it. This condition must not be attributable to the tenant and should fall outside of what one may expect from a well-maintained property. A de facto disturbance by third parties does not count as a defect. For example, if a business located next to a residence causes bad smells or vibrations, this is generally not the responsibility of the landlord. Minor repairs, such as replacing light bulbs or installing draft strips, also do not count as defects.

Furthermore, the term ‘defect’ has a broad meaning: the tenant of a neglected building may demand that the landlord remedy the defects, even if the defects were visible to the tenant at the start of the tenancy agreement. Material damage, construction errors, pests, fire safety or unsafety, and asbestos can also be considered defects. In case of a defect, the landlord must remedy it, and if they fail to do so, the tenant has several options. The tenant can demand repairs, as well as a reduction in rent and/or compensation. Our tenancy lawyer is ready to advise you in such cases and, if necessary, represent you in legal proceedings.

Mandatory lease term

The lessee of a retail space is entitled to a mandatory lease term. The lease automatically lasts for five years. After the expiry of this initial five-year period, the lease is automatically extended for a second five-year period. This rule cannot be deviated from to the detriment of the lessee. However, tenancy law gives the lessee and the lessor the option to agree on a trial period. This trial period can last a maximum of two years, during which the lessee is not entitled to the statutory mandatory lease term. Caution is advised here. Once the two-year period is over, the lease automatically turns into a five-year lease.

Substitution

Substitution means that in case of a business takeover, the new owner is allowed to take the place of the previous owner in the lease. The lease continues with the same terms and arrangements, for example about the rent and lease term. Substitution is a legal right for lessees of retail space.

Further rent determination

If the lessor or lessee of a retail space believes that the current rent does not correspond to that of comparable business premises in the same location, they can request that the court determine the rent more precisely. The legal provisions regulate the formalities of this procedure for further rent determination. This claim can only be submitted after a certain period, and there must always be an expert opinion on the amount of the rent. Our tenancy lawyer Frederike Werts is available to give advice on rent determination. She can also assist you in legal proceedings related to this matter.

Termination of lease

After the start of the agreement, the parties may agree that the lease ends on a specific date. However, different rules apply if one of the parties unilaterally wants to terminate a lease. These rules vary depending on which party wants to terminate, the type of agreement (retail space or office space), the duration of the agreement, and the reason for termination (notice of termination or termination for breach). It is advisable to seek proper assistance in these situations, as leases are often not easily terminated. Frederike Werts is here to assist you.

Delivery

The general rule for delivery upon the end of a lease is simple: the lessee must return the leased property at the end of the lease in its original condition and free from defects for which the lessee is responsible. However, the condition on delivery often leads to disputes. This is usually because it is not clear enough what is and is not being leased. Furthermore, it is not always clear what the ‘original condition’ of the leased property was. That is why it is important to create a comprehensive delivery report upon the start of the lease, attached to the lease. If a dispute arises, we are happy to provide advice.