Leasing agreement under Dutch law

LEASING CONTRACTS IN THE NETHERLANDS

In the Netherlands, many areas of leasing law fall under the rules of the lease agreement (‘Leaseovereenkomst’). In this blog we will inform you about a lease agreement under Dutch law of movable property, but also on the subject of leases of immovable property, such as real estate. MAAK’s English-speaking lawyers use their experience to provide you with the best possible support.

WHAT IS A LEASING CONTRACT UNDER DUTCH LAW?

Dutch law defines a leasing contract under Dutch law as a contract by which one party, the lessor, undertakes to allow the other party, the lessee, to use an item or part thereof. In return, the lessee undertakes to fulfil the leasing instalments. Although a leasing agreement under Dutch law does not require any particular form, it is nevertheless advisable to draw up a written agreement, as is the case with other types of agreement. The lawyers at MAAK Advocaten specialise in contract law and are happy to advise you on drawing up or amending a (rental or leasing) contract in the Netherlands.

OBLIGATIONS OF THE LESSOR UNDER DUTCH LAW

First of all, the lessor is obliged to make the leased asset, for example a leased car, available to the lessee. In addition, during the leasing period, the lessor must keep the leased asset in such a condition that it can continue to be used for the purpose for which it was leased. Accordingly, the lessor must allow the lessee undisturbed access to the leased asset. This means that he must refrain from interfering with the lessee’s use and that he is liable for any defects that impede use of the object.

OBLIGATIONS OF THE LESSEE UNDER DUTCH LAW

In return, the lessee must pay rent or a leasing instalment. Whether he has to pay this amount in advance and at what intervals it has to be paid depends on the provisions in the leasing contract under Dutch law and can be determined by the parties themselves in advance.

The lessee is obliged to use the object properly and in accordance with its purpose. In principle, he may not sublet the object unless the lessor has given him permission to do so. If the contract concerns part of a house, subletting of the living space is permitted, unless the leasing contract under Dutch law provides otherwise. In addition, the lessee is liable for all damage caused to the property during the term of the lease, unless the damage is not attributable to him.

LETTING PROPERTIES – LETTING LAW IN THE NETHERLANDS

Contracts can relate to movable goods (e.g.: the operational leasing of a car), immovable goods (e.g.: the rent of a house) or even property rights.

Tenancy law in the Netherlands regulates: (1) the letting of movable property (2) the letting of residential property (3) the letting of business premises, and (4) the letting of other property (i.e. all types of (immovable) property that cannot be classified as residential or business premises, office space, warehouses and industrial buildings).

Therefore, Dutch tenancy law has three separate legal regimes for the lease of commercial space, retail space and residential space. All three types of lease can be concluded for a fixed

period or for an indefinite period. Due to the complexities of tenancy law in the Netherlands, it is advisable to seek advice from a specialist lawyer in the Netherlands when drafting or amending such a contract. Our English-speaking lawyers can provide you with the best advice and support, especially in cross-border matters relating to the Netherlands.

The Dutch Council for Real Estate (Raad voor Onroerende Zaken) has compiled model contracts for each type of lease. These model leases tend to be more favourable than the standard positions under Dutch law. While there is a high degree of contractual freedom when renting office and other commercial premises, rental agreements for residential and retail premises are more strictly regulated.

The primary use of the property is crucial in determining the type of lease. When entering into a lease agreement under Dutch law, it is important to be aware of the mandatory rules that apply to that type of lease agreement. Our lawyers in Holland will be happy to help you with this and answer your questions about leasing and tenancy law in the Netherlands.

COMMERCIAL LEASES IN THE NETHERLANDS

Commercial leases are the least strictly regulated type of lease under Dutch law. A commercial lease is usually suitable for factories, offices, warehouses, etc. The parties are free to negotiate the period for the lease and the amount of rent and include it in the contract. The termination of commercial leases is also less strictly regulated under Dutch law. However, there are formal requirements as to how the notice of termination must be served on the tenant: by registered letter with requested acknowledgement of receipt. In addition, the tenant enjoys a two-month protection against termination. The tenant can also apply to the court for an extension of this protection for up to three years.

Given the freedom of contract that parties to a commercial lease have, it is advisable to engage the services of a English-speaking specialist lawyer in the Netherlands to assist in drafting the lease.

LEASING RETAIL SPACE IN THE NETHERLANDS

The definition of a retail lease is well defined under Dutch law and means leases for commercial premises, cafés, restaurants, hotels and campsites with the basic requirement that the premises contain an area accessible to the public.

Retail leases must have a maximum term of two years or a minimum term of at least five years, with a right to renew for a second period of 5 years (or a sufficient number of years to reach a total term of 10 years).

TERMINATION OF RENTAL AGREEMENTS UNDER DUTCH LAW

Parties to a rental agreement can mutually agree to terminate the lease at any time.The possibilities of unilateral termination by the landlord are much more limited in order to protect the tenant, who often finds his livelihood in retail. The law therefore stipulates that the landlord cannot terminate the lease without giving reasons. Furthermore, if the lease has been concluded for a certain period, it can only be terminated at the end of that certain period with a minimum notice period of one year. If the tenant objects to the termination of the lease, the landlord must seek the court’s approval of the termination contract. In addition, the landlord must prove that there are certain reasons that justify termination, e.g. that the landlord has an urgent need to use the property for his own purposes.

LETTING OF RESIDENTIAL PROPERTY IN THE NETHERLANDS

Another important area of tenancy law is the letting of residential property. In the Netherlands, residential tenancy law contains a large number of regulations that protect tenants. In principle, the parties are free to agree on the rent. However, residential tenancy agreements are subject to rent control under the Rent Act (Huurprijzenwet). The rent must therefore correspond to the quality and status of the premises.

Furthermore, a fixed-term lease does not automatically end after the fixed term has expired. Rather, the landlord must give reasons for terminating the lease. Valid reasons include that the tenant has not occupied the premises in the spirit of a good tenant, the landlord has an urgent need to use the premises himself or if the tenant does not agree to a reasonable offer to conclude a new lease.

SPECIALISED LAWYERS FOR A LEASING CONTRACT UNDER DUTCH LAW

The specialist lawyers in the Netherlands at MAAK Advocaten have acquired expertise in the field of tenancy law over the years and are happy to assist you with regard to both residential and commercial tenancy agreements.

If you have any questions about rental and leasing agreements in the Netherlands, please contact our English-speaking lawyers in Amsterdam. MAAK Advocaten will be happy to help you. Phone: +31 (0)20 – 210 31 38 E-mail: mail@maakadvocaten.nl Contact: Martin Krüger | English-speaking lawyer in the Netherlands.