Reviewing rent of business premises: here's how it works

When leasing 290 business space, the rent can be increased periodically. This can be done by applying the annual indexation, but also by revision. Revision is regulated by law. Indexation may be regulated in the lease. If one of the ROZ model rental agreements has been used, it usually is. Rental law attorney Robert van Ewijk explains below when you can have the rent of business premises reviewed by the court. In another article, he discusses the indexation rent business premises.

Review of rent of business premises

At article 7:303 BW states that the court can change the rent if it does not correspond to the rent of comparable business premises locally. If the lease is for a fixed term, then the rent can be reviewed after the expiration of the agreed term. If the lease is indefinite, then the rent can be reviewed 5 years after the rent was last determined. This does not mean the time when the rent was last indexed. The action to change the rent can be brought by either the tenant or the landlord.

What does the court look at when reviewing lease business premises?

The judge then looks at:

• The average of rents for comparable commercial space on site;
• in effect during a five-year period preceding the time when the claim is filed;
• In interpreting the results that come out of that, the court takes into account the development of the price level (i.e., inflation) from the time the rent in question was in effect until the time the claim was brought.

Note: in fact, judge does not set market rent

The intention is to then determine the market rent. In my opinion, however, the result of this comparison is not so much the market rent. This is because it does not look at what price in the market the leases are currently at. It looks at the rents of pre-existing leases. And not only that: it looks at their average. So in between are (too) low rents, rents that have not been indexed for years, unrevised rents, and so on. Perhaps under circumstances this can come close to the market price, but in practice the calculation method prescribed by law has a strong corrective effect.

How to file a claim for rent modification?

If you want to bring an action to have the rent of business premises changed, certain conditions must be met. Those conditions can be found in article 7:304 BW. The premise is that at the subpoena sits an opinion of one or more experts (para. 1). These must (or must) be appointed jointly by the landlord and tenant. If the parties cannot agree on this, then the court can be asked to appoint an expert (paragraph 2). Only then can the action be brought to change the rent. The party that loses the proceedings must pay the expert's costs to the other party (paragraph 3).

Semi-coercive law: there can be no deviation to the detriment of the tenant

The provisions in the law that regulate that rent can be adjusted by the court are of semi-enforceable law. This means that they cannot be deviated from to the detriment of the tenant. This is stated in Article 7:291 paragraph 1 of the Civil Code. If that does happen, the deviation is voidable.

Revision of rent is somewhat different from indexing

Review of the rent of business premises by the court, is somewhat different from the periodic indexation of rent. This article is about indexing rent of business premises. Do you want to know how and how far you can increase the rent of your business space? Or do you want to know whether the increase by your landlord is legally valid? Then contact contact with the rental law specialist at Lexys Lawyers.