What possibilities are there for (interim) adjustment of the rent of medium-sized business premises
Leases for shops, catering establishments, takeaway or delivery services and crafts businesses are called medium business premises leases. Specific legal provisions apply to these types of leases, the basic principle being a high degree of protection for the tenant. One of these rules concerns the legal system of rent adjustment. This article explains which possibilities there are to adjust the rent of medium-sized business premises outside the statutory system.
Rent adjustment in medium-sized business premises
The basic principle in medium-sized business premises is that the lessor and lessee are free to agree on the initial rent and its increase. Once a rent has been agreed and the way it will be increased, it cannot simply be adjusted. In principle, this can only be done after the agreed rent period has expired and in other cases only after five years. This means that if an (initial) tenancy period of 10 years has been agreed, the rent can only be adjusted after 10 years have elapsed. If the landlord and tenant then fail to agree on a new rent, the rent will have to be determined by the court. This will require following the laborious rent review scheme. The rent review scheme will not be discussed in this article.
However, it also happens that the tenant and landlord of medium-sized business premises agree on a new rent before the agreed term has expired or within five years of the previous rent review. There can be various reasons for this. One example is that the lease does not provide that the initial rent can be increased and the initial lease period is long, while after some time the tenant is quite willing to pay more rent.
Deviation from statutory regulation of rent review for medium-sized business premises possible
It is possible to deviate from the statutory regulation of rent review for medium-sized business premises. This means that a new rent can be validly agreed even before the agreed rent period has expired or within five years of the previous rent review. There are at least three options for this.
Interim rent adjustment of medium-sized business premises with permission of the subdistrict court
If the landlord and the tenant of medium-sized business premises want to make sure that their agreement on the adjusted rent will stand, the subdistrict court can be asked for its prior consent. The subdistrict court should then be asked to declare the statutory regulation on rent review wholly or partly inapplicable.
Interim rent adjustment without permission of the subdistrict court
In practice, however, it is quite conceivable that tenant and landlord do not like this route. If there is sufficient trust between the parties, the price agreement made can also simply be laid down in an allonge to the lease. However, it should be borne in mind that such an agreement is voidable. Only the lessee of the medium-sized business premises can invoke such voidability. A limitation period of three years applies to invoke the voidability of the agreement on the adjusted, often higher rent made in deviation of the statutory regulation. The limitation period starts to run as soon as the landlord invokes the clause, but may also start to run at an earlier point in time if the tenant can actually exercise that power of annulment at an earlier point in time. This is usually from the moment the agreement on the higher rent is made or recorded or from the moment the landlord claims the higher rent.
Including an agreement on a new, often higher rent for medium-sized business premises in an allonge is therefore not entirely without risk for a landlord if the agreement is not in line with the legal regulation on rent review. For about three years, the landlord of medium-sized business premises has to reckon with the risk of the tenant appealing for annulment of that agreement.
Interim rent adjustment through a new lease agreement
If the parties want more certainty about the validity of the agreement made on the adjusted rent, but do not want to go to the subdistrict court for prior permission to do so, there is another option. The tenant and landlord of the medium-sized business premises can terminate the existing lease by mutual consent and then conclude a new lease. As mentioned, at the start of the lease, the parties are free to determine the amount of the rent. The new lease will then state the new rent. A point of attention is that in such a case, the terms that play a role in the termination of the lease also start running again.
Rotterdam tenancy law lawyer
Are you a landlord or tenant of medium-sized business premises and would you like to know how to deal with a (proposed) rent adjustment? Please contact Yvonne Jansen at jansen@lvh-advocaten.nl. She will help you find the best solution in your case.
