Leases
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What are the usual forms of leases?

Leases are subject to various statutory provisions and administrative regulations. The three most important lease regimes are housing, retail space and other business space, including office space, (hereinafter referred to as office space). To determine which lease regime is applicable, consideration is given to the agreed use of the property and its designated use according to the layout of the premises at the time of entering into the lease.

For all three types of leases, the Dutch Real Estate Council provides a standard contract (Raad voor Onroerende Zaken (ROZ)), which also includes a set of general conditions that form an integral part of the contract. An ROZ contract contains certain approved deviations from mandatory law and is generally landlord friendly.

Are lease provisions regulated or freely negotiable?

Lease provisions are subject to relatively strict regulation in the Netherlands.

With respect to office space, a limited semi-mandatory system applies, which allows parties — to a great extent — to freely negotiate the rent and other terms of their agreement based on prevailing market conditions. The rental price is often based on a price index figure (generally, the Consumer Price Index (CPI) as published by the Statistics Netherlands (Centraal Bureau voor de Statistiek (CBS)). Upon termination of a lease, the tenant is granted two months’ protection from eviction by operation of law and the courts can grant protection from eviction to a tenant for a maximum of three years.

For retail space, a more regulated and semi-mandatory system applies. Unless authorized by the court, parties may not contractually deviate from statutory law in a lease agreement to the detriment of the tenant. For example, there are protections that prevent tenants from being evicted and from being subject to mandatory renewals of the term. The system also allows the court to control the rental price. Leases for retail space have a statutory five-year term (unless special circumstances apply) with an option allowing the tenant to renew the contract for another five years. After five years, the landlord is permitted to terminate the lease agreement on exceptional legal grounds. These retail lease provisions aim to protect the tenant’s business interests.

Housing leases are even more regulated under Dutch law. There is a considerable amount of mandatory law that protects the tenant. The most significant of these protections are the rules which relate to the termination of the lease and the rental price.

Is there a maximum term for leases? Can these be extended?

There is no maximum term for leases.

What are the usual lease terms?

The extent to which the lease term of lease agreements is regulated by statutory law depends on the lease regime of relevant lease. The leases of a retail space and housing are subject to a statutory minimum lease period that tenant and landlord must adhere to. In contrast, based on the freedom of contract of parties no statutory minimum lease period applies to the lease of an office space.

The terms with regard to retail space leases are regulated by means of semi-mandatory provisions and are generally promulgated to provide certain protections to the tenant.

As a general rule, a retail space lease has a term of at least five years with an option of renewal by operation of law (van rechtswege) for a second period. The length of the renewal period after expiration of the initial lease term depends on the length of the first lease term agreed upon by the parties. If the parties agree on an initial lease term longer than 5 years but less than 10 years, the lease term is automatically extended by a second lease period up to a total lease period of 10 years.

Notwithstanding above, the parties may agree on a lease period of more than ten years if such period is in favor of the tenant.

There are two exceptions to the semi-mandatory provisions. The first exception is that the parties — without court permission — can agree that the lease will be in effect for less than two years. If the short-term lease is renewed, this first exception will no longer apply, and the semi-mandatory lease provisions will apply. The second exception is that the parties can deviate from the semi-mandatory lease provisions with the court’s permission.

This system has the following implications:

  • A lease entered into for a period of more than two years, but less than five years will be converted by operation of law into a lease running for at least five years, which is extended by operation of law into a lease for a total of 10 years.
  • A lease entered into for a period of more than five years, but less than 10 years will be extended by operation of law into a lease for a total of 10 years.
  • The parties may agree that the lease will run for a period of more than 10 years.

The lease term for office space is governed by the principle of freedom of contract. However, the tenant of office space premises is entitled to eviction protection. This eviction protection enables the tenant to ask the court to extend the period within which the tenant must vacate the space as requested by the landlord by an additional year. The tenant may request this a total of three times. This eviction protection cannot be contracted away.

Regulations that relate to leases for housing are generally promulgated to provide protection for tenants. Tenant and landlord can enter into a lease for an indefinite or definite period. There is a maximum rental period of 2 years for non-self-contained housing and a maximum rental period of 5 years for self-contained housing.

A lease for housing entered into for a fixed term ends on the expiration date of the term, without the requirement for a written termination. The landlord must, however, notify the tenant not earlier than three months but no later than one month prior to the date of expiration. If the landlord fails to provide such written notice or in the case a new lease agreement is entered into with the same tenant after the initial period, the lease agreement renews by operation of law for an indefinite lease period. Conversely, a housing lease entered into for an indefinite period is terminated by a written agreement.

Are there instances where tenants may demand an extension of the lease?

Yes, but this depends on the kind of premises that are leased (please refer to the sections under the heading “Leases” for more details).

On what grounds may a lease be terminated?

The parties to a lease agreement for office space can generally terminate the lease agreement upon the expiration of the term. Since the principle of freedom of contract applies to office space leases, the parties may agree on different arrangements. Parties can agree on a notice period of at least 1 month before the date of termination of the lease. Tenants are only entitled to eviction protection (please refer to the sections under the heading “Leases” for more details).

In the case of a lease agreement for retail space, the landlord may only terminate a lease at the end of the first period of at least five, if the termination is based on one of the below two limited grounds:

  • The tenant has not acted with due care.
  • There is an urgent need for the landlord or members of the landlord’s direct family to use the space.

In addition to the grounds listed above, if the landlord desires to terminate the lease before the expiration of the period by which the lease has been extended by operation of law, the termination must be based on any of the aforementioned or following additional three grounds:

  • There is reasonable weighing of interests.
  • The tenant did not accept a reasonable offer to enter into a new lease, which offer did not include an increase in the rent.
  • Pursuant to an applicable zoning plan, the landlord wishes to effectuate the designated use for the leased space.

Please note that a lease agreement relating to retail space cannot be terminated by the landlord without court approval. Additionally, the landlord has to give the tenant a prior written notice within a minimum notice period of one year. The aim of these requirements is to protect the tenant’s business interests.

The early termination of a lease agreement for office space, retail space or housing may only occur with the approval of the court (e.g., in case of breach of contract) or upon mutual consent of the parties, subject to specific arrangements agreed between the parties. In the case of housing, the landlord may only terminate the lease agreement by registered letter or bailiff’s writ to the tenant, which must include the legal grounds for termination and with the tenant’s consent. The landlord has to consider the statutory notice period of three to six months depending on the duration of the lease. If the tenant does not consent within six weeks, the landlord must seek court approval.

The court will only grant termination on one of the following legal grounds:

  • The tenant has not behaved as befits a good tenant.
  • The parties explicitly agreed on an eviction period.
  • The space is urgently needed for Landlord’s use.
  • The tenant has refused a reasonable offer of a new lease agreement.
  • Pursuant to an applicable zoning plan, the landlord wishes to effectuate the designated use for the leased space.
  • Weighing of interests in the case of a non-self-contained residence in which the landlord had their main residence.

A lease agreement entered into for a period of two years for self-contained housing and five years for non-self-contained housing may be terminated by the tenant prior to the date of the expiration of the lease agreement by registered letter or bailiff’s writ, without a reason, with due observance of the legal notice period of one to three months.

Must rents be paid in local currency?

No, parties are free to decide on the currency to be used for rent payments.

Is rent paid on a monthly basis? Is it required to be paid in advance?

Rent is not required to be paid on a monthly basis and the parties are free to decide on the frequency of payments. However, monthly or quarterly payments are common since rent is paid in advance.

How is rent reviewed? Are there limits to the increase in rent?

Under the commonly used ROZ template, rent is reviewed based upon the CPI published by the CBS. Parties may agree upon a cap on the aforementioned indexation.

For a lease agreement for retail space, after the expiration of the agreed initial period, the tenant may apply to the court for rent review in accordance with the rent of comparable retail space on site during the previous five years. An expert opinion is required to proceed with rent adjustment. The court will only consider the request for rent modification if it is accompanied by an expert opinion appointed by the parties.

In extreme cases of unforeseen circumstances, the court can require the landlord to proceed with a reduction of the rent following the tenant’s request.

For housing leases, tenants can request the rent commission (huurcommissie) to assess the reasonableness of the rent within six months of the commencement of the lease.

What are the basic obligations of landlords and tenants?

The following is usually required of landlords:

  • Provide a well-maintained property (unless agreed otherwise)
  • Carry out certain maintenance of the leased property (parts like the roof, façade, etc.)
  • Repair any defects to the leased property

As of 1 January 2023, the landlord of office space has an additional obligation to provide the tenant with an energy performance certificate of at least an energy label of C.

The following is usually required of tenants:

  • Pay rent
  • Carry out maintenance of the property, such as installations and other internal/minor maintenance work
  • Provide a guarantee (concern guarantee/bank guarantee) or pay a cash deposit (usually equal to three month’s rent including service charges and VAT)
What provisions or restrictions typically apply to the transfer of the lease by the tenant? May a tenant sublet the leased premises?

A transfer of the rights and obligations under the lease agreement is accomplished by a contract takeover agreement (contractsovememing). Under the commonly used ROZ template lease agreement, the tenant does not have the right to transfer its rights and obligations under the lease agreement without prior written consent from the landlord.

Pursuant to applicable provisions of the Dutch Civil Code, the tenant of an office or retail space has the right to sublet all or part of the leased property, unless the tenant had to assume the landlord will have reasonable objections to relevant sublease. However, under the commonly used ROZ template lease agreement, the tenant does not have the right to sublet without prior written consent from the landlord.

What happens in the event of destruction of the leased premises?

In case of destruction of the property, subject to certain circumstances (e.g., if the destruction is not caused by any action of the tenant), both parties have the right to terminate the lease agreement.

Who is usually responsible for insuring the leased premises?

The landlord is typically responsible for insurance relating to the building of which the leased space is a part (e.g., opstalverzekering). However, the parties may agree on different insurance arrangements depending on the type of lease (e.g., in the case of a triple net lease agreement the tenant insures the building).

Will the lease survive if the owner sells the leased premises?

Yes. In principle, a transfer by the landlord of the property which is subject to a lease agreement will result in the rights and obligations of the landlord under the lease agreement becoming binding on the acquiring party.

Since January 2022, the enactment of the Purchase Protection Act (Wet Opkoopbescherming) limits the possibility of renting out a recently purchased dwelling. This act prohibits the leasing of dwellings that are designated by the municipality, within a period of four years after the date of registration of delivery in the land registry. This provision only applies to unlet designated dwellings that have been transferred and are registered in the land registry after the entry into force of a relevant provision in the respective municipality.

An exception to the aforementioned prohibition can only be made if the purchaser has obtained a rental permit. This permit can be granted on various grounds, including:

  • A lease by close relatives
  • If the dwelling is part of office or retail premises
  • For a temporary rental, where the owner has lived in the dwelling for at least 12 months in the preceding period

In addition, respective municipalities may include additional exceptions to the provision aligned with the needs and circumstances of the municipality. If provisions regarding purchase protection are violated, an administrative fine can be imposed.

Will the lease survive if the leased premises are foreclosed?

The survival of the lease depends on the content of the mortgage deed and on whether the lease already existed when the mortgage deed was executed.

If the lease existed before the mortgage deed was executed, the lease will have to be respected in the event of foreclosure. If the effective date of the lease is after the execution of the mortgage, the lease will only have to be respected in case of foreclosure if the lease was expressly permitted under the mortgage deed or by the mortgage holder (huurbeding).