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Termination of a rental agreement under Dutch law
When it comes to the termination of a rental agreement under Dutch law, specific rules apply that differ in some respects from the termination of other agreements. It is important to keep in mind that under Dutch law a distinction is made between the lease of movable property, residential property, business property, and other immovable property. For all types of tenancy agreements, it is always possible to reach a termination by mutual consent. Outside of this scenario there are, depending on the type of property, some differences when it comes to termination which our Dutch attorneys will explore in this blog.
Terminating a rental agreement in the Netherlands
In the opinion of the legislator, protection of the parties is less important in the case of movable property. As a result, there are almost no special provisions applicable to the termination of the lease for movable property. To assess whether this type of rental agreement can be terminated or has been validly terminated, the agreement itself will have to be assessed. If there is no agreement or clear arrangement on the duration and termination, terminating a rental agreement is possible at any time and no reason for termination needs to be given. In special situations, for example due to the tenant’s dependence on the property, a notice period or reason may be necessary. If a clear rental period has been agreed, the rental agreement will automatically end on the expiry date and termination before this date will only be possible if this has been mutually agreed.
The rental agreement for residential property is strictly regulated in the Netherlands to protect the tenant. As a result, in most cases, a rental agreement for residential property does not end merely by the expiry of the agreed duration or term. In addition, termination by the landlord is only possible with provision of a notice period and with reference to a specific ground mentioned in the law. However, the rental agreement will only end if the tenant agrees to this termination in writing. If consent is not forthcoming, the landlord will have to start legal proceedings to convince the court of the presence of valid grounds for termination of a rental agreement under Dutch law. During these proceedings, the rental agreement will continue to exist.
The rental agreement for retail space is also strictly regulated, especially with regard to the duration and termination of the lease. The starting point is that the lease is provided for two periods of five years. If the first term is longer than five years, the second term is automatically as long as required to achieve a total of ten years. However, the rental agreement does not automatically end upon expiry of this period.
Both tenant and landlord have the option to terminate the agreement after the first term by giving a written notice with a notice period of one year. However, the landlord can only do so on the grounds of poor operational management by the tenant or because the landlord urgently needs the rented property himself. After expiry of the second term, the landlord may also give notice of termination on the grounds that the tenant does not agree to a reasonable proposal to renew the agreement.
Again, like residential property, the tenancy agreement does not automatically end after the notice period as the consent of the tenant is required. If consent is not forthcoming, the landlord will have to start legal proceedings. Please note that in these proceedings, the landlord may only claim the reasons stated in the issued notice of termination. Therefore, it is very important that a notice of termination letter is carefully drafted and comply with all legal requirements.
The legal regime for leases in respect of other property is more or less the same as that of movable property. The most important addition concerns legal protection from eviction for up to one year. This usually enables the business tenant to find new space once notified. As a result of this more limited protection, there is a big difference between the rental agreement for retail space and, for example, offices.
Dissolution of a rental contract
Most contracts under Dutch law can be dissolved due to a breach of contract. This also applies to rental agreements, but with the difference that dissolution due to a breach of contract can (except for movable property) only be declared by the court and not by the landlord. Such a procedure obviously causes delays for obtaining possession of the property.
Legal proceedings about rental agreements
It follows from the above that if the landlord wants to terminate the rental agreement, and the tenant cannot agree, legal proceedings are often necessary. It is therefore important to seek legal advice at an early stage when seeking termination so that all steps are properly taken. In some situations, it is also possible to accelerate the termination through summary proceedings. If the judge is convinced that the dissolution will be declared in proceedings on the merits, he or she will often be willing to grant the eviction in advance. As this concerns dissolution, this only applies in the event of a breach of contract.
DUTCH LAWYER SPECIALIZED IN RENTAL AGREEMENTs
Do you have any questions regarding a termination of a rental agreement under Dutch law or do you need specific legal advice regarding a rental agreement in Holland? Our experienced specialist lawyer Jacco Bruinsma or his colleagues will be happy to help you.
Sander van Someren Gréve
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