A poor indoor climate can constitute a defect in the condition of the leased property. This follows from Article 7:204, paragraph 2 of the Dutch Civil Code. This is not illogical, as a properly functioning climate control system has a significant influence on the enjoyment of the leased property. Research has even shown that a poorly functioning climate control system can impair performance, resulting in a loss of revenue. Consequently, the tenant may request a reduction in the rent, demand the rectification of the defect, claim damages, or even seek the dissolution of the lease agreement.
To protect themselves, more and more landlords are including an exemption clause in lease agreements. This ensures they are not liable for the consequences of a defect. But is such an exemption valid with regard to a defective indoor climate? It is not a simple question. That is why it was recently discussed in the * Tijdschrift voor Huurrecht Bedrijfsruimte* (April 2019). Below, we discuss the key points.
A poor indoor climate as a defect
Nowhere in the Dutch Civil Code is it explicitly stated that a poor indoor climate effectively constitutes a defect within the meaning of the law. However, Article 7:204, paragraph 2 of the Civil Code refers to the pattern of expectations. Depending on the circumstances, a tenant may potentially expect a proper indoor climate. When assessing this pattern of expectations, practical circumstances such as the age of the leased business premises and the age of the climate control system must be taken into account. In the case of new rental properties with new climate control systems, it is logical that the tenant places higher demands regarding the indoor climate.
If a defect ultimately arises, the tenant has various options. For instance, the tenant can demand that the defect be remedied. The tenant can also request a rent reduction. And even compensation for damages is a possibility.
The defect, the pattern of expectations and the lease agreement
For office and business premises, it is possible to deviate from the above regulations. For instance, as a landlord, you can specify what the parties consider a “defect” or not. Incidentally, this is also what has been done in the ROZ model lease agreements.
In such a lease agreement for commercial premises, you can also make specific agreements regarding the requirements the leased space must meet. If you are aware of any defects in the indoor climate, you can specifically indicate this. In this way, you adjust the expectations that the tenant might rely on. Being open and honest also helps prevent all kinds of unfavorable disputes. You can also emphasize the duty of due diligence of the prospective tenant who wishes to make any modifications to the property.
Limiting the consequences of a poor indoor climate through an exemption clause
Lease agreements increasingly include exclusion clauses that limit the consequences of such defects. Often, such exclusion clauses are formulated in general terms. The question now remains to what extent they also protect the landlord against the consequences of a poor indoor climate.
That question is not unimportant. After all, the legal claim regarding defects in the completed work lapses after just two years, whereas the tenant can still bring his claim against the landlord.
In principle, such an exemption clause is permitted in the leasing of office and commercial spaces. Nevertheless, it can still result in problems. This is especially true in light of Article 7:209 of the Dutch Civil Code, which states that you cannot simply exempt yourself from liability for defects that you, as the landlord, knew or ought to have known about when entering into the lease agreement. It is noteworthy that case law is interpreting the phrase “ought to have known” increasingly strictly. After all, if you could have discovered the defect at the time of delivery by the contractor, you can no longer invoke the exemption clause later on. You ought to have known about the defect.
Conclusion
Including an exemption clause in the lease agreement can prevent all kinds of unpleasant situations. That is why it is always recommended. However, such an exemption clause is by no means always valid. At least not if you were aware of the defect beforehand, or if you could have been aware of it. This also results in a dismissive attitude regarding a defective indoor climate.
If you are aware of the defect, it is a better idea to be upfront about it immediately. This way, you address the expectations the tenant might potentially rely on. And that way, you won't have to fear sky-high damage claims later on.
Are you aware of a defect and do you want to protect yourself as much as possible through the lease agreement? Then discuss it with one of our legal experts. After all, there are various avenues you can pursue, but by no means are all equally suitable. They will investigate the most suitable solution for you.
