Substitution

Substitution

Transfer Dutch lease contract

Lessors of business premises where a shop is located, and who are confronted with a lessee who wishes to terminate the lease contract because he has sold his business, and therefore introduces a new lessee, do not have to accept this as such. However, if the lessor refuses to cooperate on unreasonable grounds, the lessee can request the court to intervene. Each lessee of retail space has the so-called right of substitution. That right of substitution is mandatory in commercial tenancy law: it can therefore not be ‘contracted out’ of the lease contract. When substitution occurs, there is not a new lease agreement for business premises, but continuation of the existing lease agreement. This means that the rent remains the same.

Conditions of substitution

The lessor does not have to agree if there is insufficient guarantee that the new lessee can pay (continue paying) the rent. Therefore, there is often an investigation into the creditworthiness of such a new (potential) lessee. In such cases it can be a good idea to offer, for example, to pay three months’ rent in advance or to arrange for a bank guarantee. The lessor also has to rely on the new lessee actually continuing the business and not starting a new business in the leased property. The best proposal depends on each individual case and we therefore recommend that you consult a commercial tenancy lawyer in advance.

Tenancy lawyers in The Netherlands

Our law firm in Amsterdam has years of experience in handling disputes in the area of commercial tenancy, including substitution. Please contact one of our Dutch tenancy lawyers for a free meeting without obligation.