There are two different rental regimes for commercial property: rental for medium-sized business premises, such as stores and catering establishments (7:290 business premises) and other business premises (7:230a business premises). The applicable rental regime is indicated by the section of the Dutch Civil Code that applies to that rental regime. Rent for medium-sized business premises is regulated in Section 7:290 of the Dutch Civil Code and is therefore also referred to as 7:290 business premises. Section 7:230a of the Dutch Civil Code regulates the rent for other business accommodation, the so-called 7:230a business accommodation. This article explains the difference between medium-sized business premises and other business premises and how to determine what type of business premises is involved in your case.
Difference between medium-sized business premises and other business premises
Different statutory regulations apply to both rental regimes. It is therefore important to make a distinction between medium-sized business premises and other business premises. The rules that apply to medium-sized business premises assume a high degree of protection for the tenant. This protection is mainly expressed in the fixed lease terms, the limited possibilities for the lessor to give notice, the system of adjusting the lease price and the right of substitution. Leases for other business premises, on the other hand, assume a large degree of contractual freedom between the parties.
Importance of type of business accommodation for termination of lease
The distinction between medium-sized business premises and other business premises plays a particularly important role in the event of termination or cancellation of the lease. A tenant of medium-sized business premises (7:290 business premises) enjoys rent protection. This means that a landlord cannot terminate the lease until he has met the legal requirements. In addition, under certain circumstances a tenant can claim compensation for moving and furnishing costs and/or goodwill compensation.
If you would like to know more about the termination options of a lease of medium-sized business premises? Then click on “How does the termination of a lease for medium business premises work?”
If a lease for other business premises (7:230a business premises) ends, the tenant can, in principle, claim eviction protection.
You can read more about eviction protection in: “How does eviction protection work for a tenant in the lease of office space (and other business space)?”
For a tenant of commercial space, it is important to know whether he is entitled to rent protection or eviction protection. For this reason it is important to know whether the rent regime of Section 7:290 of the Dutch Civil Code or Section 7:230a of the Dutch Civil Code applies. For the landlord, it is important to know which tenancy regime applies, so that he can terminate the lease in the right way.
When is there medium-sized business accommodation?
Medium-sized business premises or 7:290 business premises are defined as:
- a built-up immovable property or part thereof which, pursuant to a rental agreement, is intended to be used as a retail business, a restaurant or bar business, a collection or delivery service, or a craft business, however, only if
- in the rented space there is a room accessible to the public for the direct delivery of movable goods or for the provision of services.
Furthermore, 7:290 business premises also includes a hotel or camping business (camping site) and a house dependent on the 7:290 business premises (think of the pub owner who lives above his pub).
Almost all stores, bars and restaurants are 7:290 business premises.
When is there other business accommodation?
Other business accommodation or 7:230a business accommodation exists when there is a lease of immovable property (a building) or a part thereof that does not qualify as 7:290 business accommodation and also does not qualify as living accommodation. This is therefore a residual category.
In other words, if the requirements of 7:290 business premises are not met (and it is also not a residential property), it is a 7:230a business premises.
The best known example of 7:230a business accommodation is office space.
How do you determine whether it is medium-sized business premises or other business premises?
In practice, it may not be clear whether the property is medium-sized business space or other business space. Sometimes there is even a situation in which both rental regimes are combined. The main rule is then that both rental regimes apply next to each other to one rental object, if possible. However, we have already seen above that different protection rules apply to the different rental regimes. These protection rules for the tenant of business premises cannot be combined with each other (a tenant cannot have both rent protection and eviction protection). Therefore, it must be determined which rental regime applies. This is done as follows.
First of all, it must be examined whether actual splitting of the central business accommodation and the other business accommodation is possible. This is the case, for example, when the publicly accessible area (the store or the collection counter) can actually/constructively be separated from the other business space (for example, the storage area) as a separate area. In other words, can both spaces be used by different tenants? If splitting is possible, the publicly accessible area (the store) is governed by the rental regime of Article 7:290 of the Dutch Civil Code and the other business area by Article 7:230a of the Dutch Civil Code.
In assessing whether splitting the lease is possible, we look at:
– the circumstances of the case;
– the use that the parties had in mind when concluding the contract;
– the use that is currently made of the leased property;
– the layout of the leased property in relation to that use; and
– the consequences of any division for the tenant’s (agreed and actual) use.
All these circumstances carry equal weight. The decisive factor is therefore not whether or not there is such (structural and/or functional) cohesion and economic connection between the relevant premises that they cannot be used by different lessees without practical objections.
Secondly, if splitting is not possible, the rental regime must be determined on the basis of the predominant use. The rental regime of Section 7:290 of the Dutch Civil Code shall not apply if the leased property is used predominantly for a purpose other than to carry on a business as referred to in Section 7:290 of the Dutch Civil Code (store, catering establishment, collection or delivery service or craft business). The intention of the parties when entering into the lease is important in this respect.
If, for example, there is a store with a (large or small) storage space that fully serves the sale of the store, the lease regime of Section 7:290 of the Dutch Civil Code will apply. The storage space is then also a medium-sized business area (7:290 business area). The same applies the other way around. A showroom in which only small items are sold will fall entirely under the rent regime of Section 7:230a of the Dutch Civil Code.
Consequences of the applicable rent regime business premises and termination or cancellation of the lease
As mentioned above, the applicable rent regime for business premises determines which protection rules the tenant can invoke if the rental agreement is terminated or if the agreed rental period ends. If a tenant of other business premises wants to invoke eviction protection, he must timely file a petition with the court. The deadlines are short. If a petition is not filed in time, eviction protection can no longer be claimed.
It is also important for the lessor to know which rental regime applies to the lease of business premises. This way the lessor knows how he can terminate the lease. This is particularly important if the landlord has plans for the rental property. It must be clear to the landlord when he can again freely dispose of the leased property (without a tenant) and whether or not he is obliged to offer compensation for removal or furnishing costs or goodwill. Therefore, it does not always make sense to wait for a decision of the Subdistrict Court which rental regime applies to the lease of business premises.
Lawyer rental law business space
In short: it is important to know whether this is a matter of medium-sized business premises or other business premises. Often the decision will depend on the specific circumstances of the case. Naturally, we will be happy to help you further in this respect. Would you like to know which rental regime applies to your lease of business premises, or do you have any other questions? Please contact Yvonne Jansen. The lawyers at LVH assist both landlords and tenants of commercial property. If necessary, we conduct proceedings in court.
