Termination of lease agreement

Termination of lease agreement

A tenant can often terminate a lease agreement in a relatively simple manner; however, the notice period must, of course, be observed. For a landlord, it is often less easy to terminate a lease agreement. This is because certain requirements often apply, which stem from the lease agreement or from the law. The applicable requirements differ per type of real estate. For instance, the lease may concern residential space (Article 7:232 of the Dutch Civil Code), commercial premises for small and medium-sized enterprises (Article 7:290 of the Dutch Civil Code), and other built real estate (Article 7:230a of the Dutch Civil Code). Regarding the latter, consider office space, for example.

When renting out these different types of real estate, a different regime also applies regarding the termination of the lease agreement. It is always advisable to seek legal advice when terminating a lease agreement. This way, a potential legal conflict can be prevented.

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.

Termination of 290 business premises: grounds and time limits

Extensive tenant protection applies to commercial premises for small and medium-sized enterprises – shops, hospitality establishments, and other spaces accessible to the public within the meaning of Article 7:290 of the Dutch Civil Code. Pursuant to Article 7:293 of the Dutch Civil Code, notice of termination by the landlord must be given by registered letter or by bailiff's writ, with a notice period of at least one year, and must state the grounds for termination. Pursuant to Article 7:294 of the Dutch Civil Code, the landlord may only terminate a lease agreement at the end of the first (usually five-year) term due to poor business operations by the tenant or urgent personal use. After the first term, additional grounds come into play pursuant to Article 7:296 of the Dutch Civil Code, such as the refusal of a reasonable offer for a new agreement, the implementation of a valid zoning plan, and a general balancing of interests in which the landlord's interest outweighs that of the tenant.

If the tenant does not agree to the termination in writing within six weeks, the lease does not end automatically: the landlord must then request the court, pursuant to Article 7:295 of the Dutch Civil Code, to determine the date on which the agreement ends. The lease continues until the court has ruled. Whether you are an international real estate fund or the entrepreneur who wishes to retain their shop on the main street: the formulation and substantiation of the grounds for termination require careful attention, as no new grounds can be added during the proceedings.

Termination of 230a business premises and eviction protection

For other business premises – offices, warehouses, factory and storage space within the meaning of Article 7:230a of the Dutch Civil Code – there is much greater contractual freedom and significantly less tenant protection. In principle, a fixed-term lease agreement ends automatically here; for an agreement for an indefinite period, a notice period of at least one month applies, and the landlord is not required to state grounds. However, the tenant does enjoy eviction protection: pursuant to Article 7:230a of the Dutch Civil Code, the lease does indeed terminate by notice, but the landlord must give separate notice of eviction.

The tenant may subsequently request the court to extend the eviction period within two months of the date on which notice of eviction was given. During that procedure – and as long as no final decision has been made – the tenant is not required to vacate the premises. The court weighs the interests involved and may extend the period by a maximum of one year at a time, up to a maximum of three years. For landlords who wish to obtain possession of their property quickly and for tenants who need time to move, this arrangement often determines their negotiating position.

Interim termination and dissolution due to breach of contract

Early termination of a fixed-term lease agreement is only possible if the parties have agreed to this; if such a clause is absent, the agreement generally continues until the end of the term. In addition to termination, tenancy law provides for the route of dissolution. If a party is in attributable default – in the case of the leasing of built immovable property, one primarily thinks of rent arrears – the other party may claim dissolution of the agreement pursuant to Article 6:265 of the Dutch Civil Code. For built immovable property, Article 7:231 of the Dutch Civil Code stipulates that dissolution due to a breach must, in principle, be pronounced by the court; the landlord can therefore not simply terminate the lease himself.

Whether rent arrears or other breaches justify termination depends on their nature and severity. For both tenants and landlords—from a listed retail chain to the baker on the corner—we assess whether termination or dissolution is the appropriate course of action and what risks, such as an obligation to pay damages, are associated with it. Should the matter result in legal proceedings or eviction proceedings against the tenant, our lawyers and in-house counsel will assist you throughout the entire process.

Termination by mutual consent

Not every termination needs to proceed via grounds for termination or through the courts. Parties can always terminate the lease agreement by mutual consent. This is typically done in a settlement agreement (termination agreement), in which the end date, handover and vacating, the settlement of the security deposit, and any financial arrangements—such as a buyout sum or a contribution towards moving expenses—are recorded. Such an amicable settlement offers both parties certainty and prevents a long-running conflict. We draft these agreements, review them, and negotiate the terms on your behalf, ensuring that no obligations or liabilities remain.

Tenancy law and related expertise

The termination of a lease agreement rarely stands alone. Questions regarding defects in the leased property, a rent adjustment , or a planned renovation. This page is part of our broader Tenancy Law, within which our mixed teams of lawyers and in-house counsel cover the entire spectrum from tenant to landlord – from international corporations to the entrepreneur around the corner. Contact us to discuss your situation without obligation.