Commercial property and investment
Tenancy law relation to commercial property
In real estate there are three types of rent: rent of a house, mid-market office space (think of a shop or catering industry) and other commercial property (such as office space). Different legal rules apply to each type of property. The tenancy law lawyers of LVH Advocaten assist both tenants and landlords in relation to commercial property.
Lease agreement mid-market office space
For most shops, catering and craft businesses, a lease agreement is concluded for medium-sized business premises. The rules that apply to this are based on a high degree of protection for the tenant. This is because it is important for the entrepreneur to be able to build up a business and generate income and goodwill. The protection is expressed in particular in the fixed lease terms, the limited termination options for the lessor, the system of rent adjustment and the right of substitution.
Would you like to know whether your property qualifies as small business premises? Read the article “Medium-sized business premises or other business premises: what is the difference and how do you determine which is which?”.
Lease terms for mid-market office space
As a whole, a lease agreement for medium-sized business premises is entered into for a period of 5 + 5 years. After the first period of five years, the tenant and lessor can terminate the lease. If they do not do so, the tenancy agreement will continue for five years. The tenancy agreement often restricts the landlord’s ability to terminate the lease. This gives a tenant security. In addition, the lessor must comply with legal rules when he wants to terminate the lease of a medium-sized business premises. Would you like to know more about the termination possibilities of a lease of medium-sized business premises? Then click on “How does the termination of a tenancy agreement for medium-sized business premises work?”
Rental payments for mid-market office space
Tenant and landlord are allowed to determine the amount of the initial rent for mid-market office space. After the term of the initial lease has expired, the tenant and lessor can renegotiate the rental payment. If the tenant and lessor do not agree on the payment of the new rent, they can have a rent increase or rent reduction determined by the court. For this, the advice of one or more expert(s) must first be obtained. They will examine whether the rent corresponds to that of comparable business premises in the area. Neither can a procedure be started without this expert opinion. Nor can a procedure be started at any time. It is therefore useful to engage the services of a tenancy attorneys of LVH Advocaten.
Replacement of contracting party
A tenant of a mid-market office space has the right of substitution. This means that when the landlord sells its enterprise located in the mid-market office space, the new owner can also take over the lease. The new owner of the business will then take the place of the tenant in the lease agreement. This is important for a (new) tenant, because he can then continue the business in the same premises with the same flow of customers. If the landlord does not cooperate, the tenant can ask the court for permission. A landlord may have good reasons to refuse a substitution, for example because it is uncertain whether the new owner will be able to pay the rent (on time). It is therefore important to seek the advice of a rent lawyer in order to deal with disputes about substitution. Would you like to know more about substitution? Then click on: “How do I transfer a tenancy agreement by means of the right of substitution?”
Lease agreement of other industrial space (office space)
In principle commercial property lease agreement for other industrial space relate to office space, but in fact they include all business space that cannot be regarded as medium-sized business space (see above). These leases are characterised by a high degree of contractual freedom between the parties. The tenant and the landlord may agree on the duration of the lease and how the lease can be terminated. Termination of such a tenancy agreement does not, in principle, lead to any compensation. However, a tenant is entitled to eviction protection. If the landlord has terminated the tenancy agreement and the tenant has, for example, not yet found replacement business premises, the tenant may ask the court for an extension of the eviction period. This can be done a maximum of three times one year. It is also important to submit a petition to the court in good time. This always requires a tenancy law lawyer. You can read more information about eviction protection: “How does eviction protection work for a tenant when renting office space (and other business premises)?”
Subletting of business space
For the lessee of business space, it can make sense to sublet (part of) the leased business space. In principle, subletting of business space is allowed. The tenant then becomes a sublessee. Sublease is not allowed if the tenant should understand that the landlord has objections against it or if it is contractually excluded. More information about (the lack of) permission from the landlord for subletting and other points of interest can be found in: “What are the possibilities and points of attention when subletting business accommodation?”.
Lawyer tenancy law business premises
The commercial property tenancy law attorneys of LVH Advocaten frequently assist tenants and landlords of business premises. They advise on (entering into) a tenancy agreement. They also assist tenants and landlords of business premises in tenancy disputes. If necessary, we conduct proceedings in court.
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