Termination of lease agreement business premises

Termination of lease agreement business premises 

Book 7 of the Civil Code contains provisions on the lease of business premises. It distinguishes between two types of leases. Namely, the so-called 230a-business premises and the 290-company space. The numbers refer to the articles of law in which this is regulated. In short, the rules of 290-company space apply to stores, restaurants and other spaces accessible to the public. The rules of 230a business premises apply to other business premises, such as office space, warehouses, and so on. In principle, that lease can simply be terminated by the end date, but in that case the tenant can invoke evacuation protection.

Here's how that works with the 290-business space lease. 

Lease agreement medium business premises or retail space

A 290-company space is also known as a mid-level business space or retail space. Medium business premises are, for example, stores and catering establishments. Such business premises are visited by customers or guests and it is therefore important for the tenant to have certainty about the continuation of the lease. This is because they often have to make large investments in the leased premises and are also highly dependent on their location.  

Rent protection tenant retail space

The law protects the interests of the tenant middle class business. These laws may not be departed from to the detriment of the tenant unless authorized by the court. By law, leases for medium-sized business premises are in principle entered into for five years, with an automatic five-year extension if the lease is not terminated. Parties may also agree on a longer initial term. In that case, the first renewal will in any case ensure that the total lease term is ten years. However, it has recently become possible to enter into a two-year or shorter lease for medium-sized business premises. 

Termination of retail space lease by landlord

Notice of termination of a lease of medium-sized business premises by the landlord must be given at least one year before the end of the term. Notice of termination must also be given by writ or registered letter. But, the lease may not simply be terminated after the expiration of the initial period, even though the end of the agreed term is approaching. A lease may be terminated by the landlord after the expiration of the initial period of five years or longer only if there is poor management by the tenant or urgent own use by the landlord.  

Termination of retail space lease after 10 years

Additional rules also apply after the second term. A lease may be terminated after the expiration of the second five-year period or a total of 10 years from inception only if the landlord has reasonable grounds for doing so. Reasonable grounds may include: 

• poor management of the tenant;  
• intended urgent personal use on the part of the landlord;  
• the tenant does not agree to a reasonable offer to enter into a new agreement regarding the leased property (to the extent that such offer does not include a change in the rent); 
• the landlord wants to fulfill a zoning purpose on the leased property under a valid zoning plan. 

Terminate lease through court

so it depends on the above circumstances whether the landlord can terminate the agreement after the first or second term. If a tenant does not agree to terminate, the landlord can ask the court to determine the time of termination of the lease. The court will then have to assess whether the landlord has one or more reasonable grounds to terminate the lease. If none of the above situations exist, then a balancing of interests between the tenant and the landlord must take place. 

Lawyer to terminate lease of retail space

As long as the court has not set a time for termination of the lease, the lease remains in effect as usual. Are you a tenant or landlord of a mid-sized business space and have questions or termination or any other issue surrounding rent? Then please contact up with the tenancy law lawyer From Lexys Lawyers.