Renovation

Renovation

The law distinguishes between urgent work on the leased property and renovation. Urgent work concerns work that cannot be postponed until the end of the lease agreement without detriment. Examples include foundation repair. Urgent work can cause nuisance to the tenant. In many cases, however, the landlord is required to tolerate the urgent work.

Renovation occurs when something is (partially) changed in the rented property. Examples include installing double glazing or replacing an old bathroom. The tenant is only required to tolerate renovation if the landlord makes a reasonable proposal. The renovation proposal must be in writing. After renovation, the landlord may increase the rent in certain situations. In the case of a renovation of a complex, such as an apartment building, the proposal is presumed to be reasonable if 70% or more of the tenants agree to it. It is advisable to seek expert legal advice when there are renovation plans or when conflicts arise from a renovation (plan).

We have the knowledge and expertise to assume diverse roles: from advice to dispute resolution. We have an experienced team of lawyers and legal experts in the field of tenancy law. Contact us to discuss the possibilities.

Legal framework: Article 7:220 of the Dutch Civil Code

The tenant's duty to tolerate works and renovations is regulated in Article 7:220 of the Dutch Civil Code. Article 7:220 paragraph 1 of the Civil Code obliges the tenant to tolerate urgent works on the leased property. Article 7:220 paragraph 2 of the Civil Code stipulates that the tenant must additionally provide the opportunity for renovation, provided that the landlord makes a reasonable proposal. Pursuant to Article 7:220 paragraph 2 of the Civil Code, renovation is understood to mean both demolition with replacement new construction and partial renewal through alteration or addition. In the case of a built complex of ten or more dwellings or business premises forming a structural unit, the renovation proposal is presumed to be reasonable pursuant to Article 7:220 paragraph 3 of the Civil Code if 70% or more of the tenants have consented to it. A tenant who has not consented to that proposal may, within eight weeks after written notification of the presumption, request the court to rule that the proposal is not reasonable. Whether we are assisting an international corporation, a housing association, or the baker on the corner: our lawyers and in-house counsel assess every proposal against these standards.

When is a renovation proposal reasonable?

A renovation proposal must be in writing, concrete, complete, and well-substantiated, so that the tenant can assess the consequences for the use of the leased property and for the rent. The judge weighs the interests of landlord and tenant against each other: the nature and scope of the work, the nuisance and duration, the financial consequences, any temporary alternative accommodation, and the compensation offered all play a role. Landlords sometimes wrongly present renovation as “urgent work” to circumvent the test of reasonableness; that distinction is legally sharp. We assess for landlords whether a proposal stands up to scrutiny and for tenants whether a proposal can justifiably be refused or challenged.

Moving expense allowance for renovation

If the renovation necessitates a (temporary) relocation of the tenant from residential premises, the landlord contributes to the moving and redecoration costs pursuant to Article 7:220 paragraph 5 of the Dutch Civil Code. Article 7:220 paragraph 6 of the Dutch Civil Code establishes a statutory minimum amount for this purpose, which is indexed annually by the Minister. In its judgment of 22 April 2016 (ECLI:NL:HR:2016:726), the Supreme Court ruled that only the relocation connected with the renovation itself entitles the tenant to this compensation; relocation required solely for urgent work or maintenance falls outside this scope. A comparable statutory minimum is lacking for commercial premises, but in the event of extensive renovation, the landlord is often obliged to compensate for the actual moving and redecoration costs. We calculate, claim, or dispute these compensations on behalf of our clients.

Residential space versus commercial space

The difference between residential and commercial premises is significant during renovations. For residential premises, the regulations regarding the reasonable proposal and the relocation cost allowance are largely mandatory, ensuring the tenant cannot be restricted to their disadvantage. For commercial premises, Article 7:220 of the Dutch Civil Code is, in principle, regulatory law: tenant and landlord can make deviating agreements in the lease agreement (for example, via the ROZ provisions) regarding the duty to tolerate, nuisance, and compensation. Moreover, in the case of retail business premises (Article 7:290 of the Dutch Civil Code), renovation often coincides with a rent adjustment or the question of whether the lease agreement can be terminated. A careful reading of the contract is therefore indispensable; that is why we always review the specific agreements before providing advice.

Renovation, termination and rent

Sometimes, renovation is so extensive that continuation of the lease is not possible. In the case of commercial premises for small and medium-sized enterprises, the landlord may then terminate the lease agreement on the grounds of urgent personal use, which, according to Article 7:296, paragraph 1, sub b of the Dutch Civil Code, also includes renovation that is not possible without termination of the lease. If the lease is continued, a quality improvement resulting from renovation may lead to a higher rent; for commercial premises, this proceeds via the procedure for the subsequent determination of the rent (Article 7:303 of the Dutch Civil Code). A renovation thus affects the termination of the lease agreement and any defects that arise during or after the work. Our lawyers and in-house counsel guide both landlords and tenants through this interplay of regulations.

Frequently asked questions about renovation

As a tenant, am I required to tolerate every renovation?

No. You must tolerate urgent work, but pursuant to Article 7:220 paragraph 2 of the Dutch Civil Code, you are only required to tolerate a renovation if the landlord makes a reasonable written proposal. If the proposal is unreasonable, you may refuse it or submit it to the court.

When am I entitled to a relocation allowance?

In the case of residential accommodation, there is a right to the statutory relocation allowance (Article 7:220, paragraphs 5 and 6 of the Dutch Civil Code) when the renovation itself necessitates a (temporary) relocation. A relocation required solely for maintenance or urgent work does not confer this right.

What does the 70% rule mean?

If it concerns a complex of ten or more dwellings or business premises forming a structural unit, the renovation proposal is presumed to be reasonable if at least 70% of the tenants have consented (Article 7:220 paragraph 3 of the Dutch Civil Code). An individual tenant may challenge this presumption before the court within eight weeks.

Renovation under our tenancy law

Renovation is part of our broader Tenancy Law. Whether you are a landlord or a tenant, from an international corporation to the baker on the corner: our mixed teams of lawyers and in-house counsel advise on renovation proposals, conduct negotiations, and litigate where necessary. Please feel free to contact us to discuss your situation without obligation.