Penrose Lawyers tenancy law

Penrose Lawyers tenancy law

Penrose is a law firm specializing in tenancy law. Below, we describe a number of common topics within tenancy law that we deal with on a daily basis. We then briefly describe the different types of rental contracts distinguished in the law and some of the associated legal requirements.

Tenancy law topics

We are involved in all possible tenancy law topics relating to various types of real estate, such as:

• terminations, rent increases, defects, maintenance, and renovation;
• new and existing commercial leases, sale and lease back, triple/double net and turn key constructions;
• lease guarantees;
• residential leases (student housing, residential care);
• (re)developments;
• real estate transactions (existing and new real estate, advising, due diligence (DD), lease agreements for new real estate, lease law input into transaction documentation), including restructuring real estate portfolios and real estate financing.

We are also involved in all possible tenancy law issues in other sectors, such as healthcare, retail, and energy. In healthcare, in addition to the general issues mentioned above, Penrose Advocaten is involved in tenancy law issues such as:

• residential care, tenancy law issues surrounding Separate Living Care (Scheiden Wonen Zorg); mixed (care/lease) agreements, sublease, rents, and service charges; and
• lease agreements in hospitals and residential care centers (commercial space leases);
• lease contracts for new and existing healthcare real estate; and
• real estate transactions.

In the retail sector, we are involved in matters such as:

• mixed (franchise/lease) agreements;
• retail and hotel leases;
• turnover-related rent;
• rental price determinations;
• renovations of stores and shopping centers;
• lease terminations;
• substitutions; and
• requests for approval of deviating clauses.

In the energy sector, for example, this includes roof lease agreements, the rental/lease of solar panels, lease-supplementary and/or lease-dependent building rights, the energy label obligation, and thermal energy storage (WKO) issues in connection with lease law synergy with the Heat Act (Warmtewet).

Types of lease agreements

The law distinguishes between lease agreements for retail space (as well as hotels, restaurants, etc.), offices (as well as factories, warehouses, distribution centers, roofs for solar panels, etc.) and residential space. The legal rules for the different categories differ significantly. For example, with regard to the possibilities for termination, lease protection and rent prices. Which rental regime applies depends on what the parties had in mind with regard to the use of the rented property at the start of the lease, taking into account the layout of the leased property. It is not the qualification of the parties to an agreement that is decisive, but the intended and actual use of the leased property.

Lease agreement for residential space

With regard to residential property, a distinction is made between independent and non-independent residential property. An independent residence is a residence with its own entrance, toilet, and kitchen. Examples include apartments and houses. Non-independent residences do not have their own entrance and have a toilet or kitchen that is shared with other residents. Examples include (student) rooms.

Security of tenure

Most residential lease agreements are entered into for a fixed term, for example one or two years. A common misconception is that a fixed-term lease agreement automatically ends for both the tenant and the landlord after the term has expired. This is not the case. Even with a fixed-term lease agreement, a tenant has lease protection. This means that the landlord can only terminate the lease on limited grounds and after the fixed term has expired. The same applies if the parties have agreed on a lease for an indefinite period. In that case, too, the tenant has security of tenure and the landlord can only terminate the lease on (the same) limited grounds. This means that the tenant cannot be easily evicted.

As a tenant, you can terminate the lease after the fixed term has expired, subject to the notice period specified in the lease. In the case of a lease for an indefinite period, the tenant can terminate it at any time, subject to the notice period. The notice period for the tenant can never be longer than the payment term. Is the payment term one month? Then the notice period is also one month, even if the lease agreement states otherwise. Finally, the notice period for the tenant can only be a maximum of three months.

The landlord may also terminate the lease agreement at any time after the specified period has expired or in the case of a lease agreement for an indefinite period. However, this works differently than termination by the tenant. The landlord must observe a notice period of no less than three months, extended by one month for each year that the lease has lasted, up to a maximum of six months. In addition, the landlord must state one or more of the grounds for termination specified in the law in the notice of termination. Furthermore, in the notice of termination the tenant must be requested to inform the landlord within six weeks whether he agrees to the termination of the lease.

Unlike after termination of the lease by the tenant, only a court can terminate the lease at the landlord’s request, unless the tenant expressly agrees. A court must grant the landlord’s request for termination if one of the legal grounds for termination is met:

• if the tenant has not behaved as a good tenant;
• if there is a diplomatic clause within the meaning of the law;
• if the landlord urgently needs the property for his own use (including renovation);
• if the tenant refuses a reasonable offer for an amended lease;
• if the landlord wants to construct a building with a function other than a residence on the basis of the environmental plan;
• if, in the case of a room rental, the interests of the landlord outweigh the interests of the tenant in continuing the lease upon termination of the lease agreement;
• if, in the case of flexible housing, a temporary environmental permit has expired;
• if the landlord, who is a natural person and rents out no more than one residence and who has lived in the residence for at least two years prior to the lease agreement, wishes to sell the residence; and
• if the landlord is a housing association and an orphan who continued the lease after the death of the tenant has reached the age of 28 and it appears that they can obtain suitable housing.

Rental price protection

When determining the amount of the rent, the landlord is bound by rental price protection legislation. Rental price legislation distinguishes between three categories of payment obligations for the tenant, namely the basic rent, the costs for utilities with an individual meter, and the service costs. Since the Affordable Rent Act (Wet betaalbare huur) came into force on July 1, 2024, the rent is either regulated or unregulated. An unregulated rent is defined as a rent for independent residential space that, at the time of entering into the lease agreement, pursuant to the Housing Valuation System (Woning Waardering Stelsel (WWS), also known as the points system) is higher than €1,184.82 (price level July 1, 2025), the so-called free sector rent. In the free sector rent, the landlord is free to determine the amount of the initial rent.

Regulated rent is understood to mean rent in the low or middle segment. The low segment is social rent, i.e., the rent for independent residential space with an initial rent based on the WWS of up to €900.07 (price level July 1, 2025) or for non-independent residential space (mobile home or site). The middle segment concerns so-called mid-range rents, i.e. the rent for independent residential space with an initial rent based on the WWS between €900.07 and €1,184.82 (price level July 1, 2025). In the case of regulated rent, the landlord is not free to determine the amount of the rent. In fact, the WWS is mandatory: the landlord must determine the rent on the basis of the WWS, failing which the municipality can take enforcement action.

The points scores based on the WWS can be found at LINK www.huurcommissie.nl.

The tenant can challenge the rent in two ways: the initial rent within six months of the start of the lease (with retroactive effect) and the rent after six months (without retroactive effect). The annual rent increase is capped for both regulated and unregulated rents.

For an example of a residential lease agreement that is widely used in practice, see the model provided by the Real Estate Council (ROZ).

Lease agreement for retail space

Retail space is defined as commercial space intended for use as a shop, restaurant, café, hotel, camping business, or craft business. Often described as “290 commercial space”. The availability of a space accessible to the public (such as a point of sale) is a condition for qualification as retail space. In practice, it is not always clear which lease contracts meet these criteria. There is a lot of case law on this subject. Built areas, such as storage rooms, parking spaces in a parking garage, and other spaces rented by the tenant for the purpose of retail space also qualify as retail space.

Specific provisions apply to retail space lease agreements, particularly with regard to the term, rent and termination of the lease agreement. These provisions are intended to protect the tenant. The reason for this is that the location of retail space is of great importance and tenants therefore need extra protection against, among other things, termination by the landlord. The tenant cannot simply move their business to another location.

Term of the lease agreement

In general, a mandatory lease term of five plus five years applies to retail space. This rule is (semi-)mandatory law. This means that it cannot be deviated from to the detriment of the tenant without the permission of a judge. After ten years, the tenant and landlord are free to agree on whatever they want with regard to the term of the lease agreement. The parties are also free to agree on a term longer than ten years.

Trial period

There is one exception to the above. The parties may enter into a lease agreement for two years or less. This option was created to allow the tenant to investigate whether his business is profitable. If the landlord notifies the tenant in writing before the end of the two-year period that they must vacate the premises, the tenant cannot invoke his security of tenure and the business must therefore leave. If the two-year term is extended (even if only by one day), a five-year lease agreement is automatically established. From that moment on, the tenant also has security of tenure.

Termination

Termination can be affected by either party at the end of a lease period or, in the case of an indefinite lease period, at any time subject to a notice period of at least one year.

A termination by the landlord must include the (mandatory and limited) grounds for termination, failing which the termination is null and void.

A (valid) termination by the landlord does not automatically terminate the lease agreement. If the tenant does not agree to the termination of the lease agreement, the landlord must submit a request to the court to terminate the lease agreement and determine the date on which the tenant must vacate the leased property.

At the end of the original lease term (usually a 5-year lease term), termination of the lease agreement is permitted on the basis of the statutory grounds for termination (i) improper management by the tenant (“poor management”), or (ii) urgent need for own use (“urgent required for own use”). In addition to these statutory grounds for termination, the following statutory grounds for termination apply at the end of the second lease term (usually a 10-year lease term): (iii) refusal by the tenant of a reasonable offer and (iv) implementation of a zoning plan. If none of these statutory grounds for termination apply towards the end of the second lease term, the court may also grant the landlord’s request to terminate the lease agreement on the basis of a (general) weighing of interests.

The tenant is not obliged to give reasons for the termination. The landlord cannot refuse a termination made by the tenant.

For an example of a lease agreement for retail space that is widely used in practice, see the model provided by the Real Estate Council (ROZ).

Rent adjustment

The (semi-)mandatory provisions provide for the possibility of a rent adjustment (other than the annual rent indexation). The tenant and/or landlord have the right to request the court to adjust the rent and to compare it with the average rent for comparable local retail space over the last five years. The parties may request such a rent adjustment at the end of the agreed lease term and, in other cases, five years after the last rent adjustment. The new rent takes effect on the date on which the court is requested to review the rent, unless the court decides to apply a different date on the basis of special circumstances put forward by one of the parties.

Lease agreement for other commercial space

‘Other commercial premises’, also referred to as office space or “230a-commercial space”, means all buildings that are not classified as residential and/or retail premises. Examples include offices, warehouses, distribution centers, factories, storage facilities, travel agencies, and banks. For example, the roof of a building that is leased for the purpose of installing solar panels also qualifies as 230a-commercial space.

In the case of 230a-commercial space, the tenant and landlord have a great deal of (contractual) freedom, for example, regarding the term and termination of the lease agreement and the rent and rent adjustments.

Term and termination of the lease agreement

If a lease for 230a-commercial space is entered into for a fixed term, the lease agreement automatically (by operation of law) terminates after the agreed period has expired. If the lease agreement is entered into for an indefinite period, it can be terminated by the tenant and landlord at any time. However, this does not mean that the tenant must leave immediately.

The tenant has protection against eviction. This mandatory protection means that the tenant’s obligation to vacate the leased property is suspended by operation of law for a period of two months from the date on which the eviction was announced. The landlord must therefore give notice of eviction. The tenant is not entitled to eviction protection if he has given notice themselves, if he has expressly agreed to the termination of the lease, or if he has been ordered to vacate by a court.

Within this two-month period, the tenant may submit a request to the court to extend the eviction protection period to a maximum of one year. This can then be done twice more. The eviction obligation can therefore – theoretically – be suspended for a maximum of three years. When assessing the tenant’s request, the court weighs the tenant’s interest in continuing to use the leased property against the landlord’s interest in evicting the tenant.

For an example of a lease agreement for office space and other commercial space other than retail space that is widely used in practice, see the model provided by the Real Estate Council (ROZ).