Judge finds COA the same as a hotel, right or wrong?

In the middle of last year, the District Court of The Hague (ECLI:NL:RBDHA:2024:12605) ruled that the reception of refugees is equivalent to operating a hotel. The tenant who first operated a hotel in the building, but then gave it in use to the COA (the Central Agency for the Reception of Asylum Seekers), thus did not act in violation of the zoning from the rental agreement. Is that judgment of the subdistrict court judge justified, or is this possibly a (to some extent) politically colored judgment? Rental law attorney Robert van Ewijk discusses the verdict.

Destination in lease agreement with Fletcher: hotel / café / restaurant

The dispute was between the owner of the building (Stichting Vastgoed Beheer Nederland, SVBN) and Fletcher, a major Dutch hotel operator. Fletcher rents from SVBN the building at 108 Laan van Meerdervoort in The Hague. The building, also known as the Fletcher Stadshotel Den Haag, houses 47 bedrooms, a bar and a restaurant. The lease states that the building is intended to be used as a “hotel / cafe / restaurant”. Furthermore, the lease agreement states that without SVBN's permission, Fletcher may not put the building to any other use. In addition, the lease agreement states that Fletcher will ‘keep the lot open for the purpose of hotel operation.

Reception of asylum seekers at Fletcher hotel

In May 2023, the municipality of The Hague gave permission to COA to accommodate about 100 status holders in the Fletcher Stadshotel. Only so-called after emigrants will be accommodated. The AZCs are full, so it is not possible for after emigrants to stay with their partner or family in the AZC. The Fletcher Stadshotel is therefore used as an emergency shelter. Fletcher then rented all the rooms to COA at the usual rates.

Property insurance coverage cancelled

The building owner does not see that. It believes the use as an emergency shelter location violates the zoning contained in the lease. That means Fletcher is in breach of it. Moreover, the building's insurer has informed SVBN that the use as an emergency shelter location, constitutes a change in risk and therefore the policy will be terminated immediately. Admittedly, SVBN managed to insure the building elsewhere at a higher premium and Fletcher paid the premium difference, but since Fletcher, according to SVBN default delivers, it wants payment of contractual penalties. In addition, SVBN wants compensation seeing Fletcher.

Not a regular hotel situation, but still no conflict with zoning

The district judge did not go along with this. It ruled that there was no question of a regular hotel situation, but nevertheless found that there was no violation of the contractual destination. The subdistrict court considered that the reception “has crucial similarities to the operation of a hotel”. For example, the Subdistrict Court stated that COA booked all the rooms for the stay of guests and paid for them. Based mainly on this argument, the district judge concluded that the use did not violate the destination ‘hotel.

SVBN's counterarguments dismissed

The arguments that:

• this type of rental required permission from the municipality (read: it is therefore not within the public law zoning ‘hotel’);
• that COA provides guidance and shelter at the hotel, including education, daycare and care;
• That the booking is for a year and a half (rather than a few nights, as is common at a hotel);
• the hotel is not available to other guests during that period;

all do not make that there are “no normal hotel operation”. In other words, despite all these arguments, the subdistrict court finds that the use is still equivalent to operating a hotel. In itself, this is remarkable. On the basis of exactly the same arguments, it could just as easily have been ruled that there is a conflict with the zoning. Quantitatively at least, there are more arguments against the judgment of the Subdistrict Court.

Violation of obligation to keep plot open as hotel?

Especially since the lease also contains the obligation to keep the plot open for hotel operation. By leasing the hotel to one user for the duration of one and a half years, preventing other guests from staying at the hotel, in my opinion, this obligation is not met. The subdistrict court, however, dismisses this by stating that “It has since been ruled that the current hotel situation falls within the operation of a hotel”, and that for that reason Fletcher did not breach the aforementioned obligation.

That reasoning is not correct in my opinion. The obligation to operate the building as a hotel is slightly different from the explicit obligation to keep the lot open for the purpose of that operation. It's just a bit broader. Even if the rental to COA would still fall within the destination hotel (which I would venture to discuss), this does not mean that Fletcher has fulfilled its obligation to keep the plot open for the operation of a hotel. After all, other guests are no longer welcome.

Other statements on emergency shelter in hotels

The latter also more or less played a role in a decision of the Arnhem-Leeuwarden Court of Appeal of September 12, 2023 (ECLI:NL:GHARL:2023:7642). The fact that the hotel's terrace remained open to passers-by in that case was part of the reason that it was ruled that by using the hotel as an emergency shelter for asylum seekers and status holders, it did not violate the lease-law zoning ‘restaurant with lodge/hotel function’. According to the Overijssel District Court (ECLI:NL:RBOVE:2023:1874) asylum seekers do not stay for short periods of time, which cannot be equated with a hotel stay. Also the court of Utrecht (ECLI:NL:RBMNE:2023:758) previously ruled that the refugee reception use violates the agreed-upon hotel zoning.

Based on one core argument, however, the Hague subdistrict court argues that there are crucial similarities to operating a hotel. However, there are several arguments that show that there are, on the contrary, fundamental differences. So is the judgment legally tenable?

Is the judgment legally tenable?

Above, I comment on how the district judge applied the law and the agreement has explained. The judgment does not tell us what the thoughts of the district judge were. In her note under this judgment mr. J.K. Six-Hummel wrote justified that “Given the issues surrounding the reception and housing of asylum seekers and status holders”, a decision like this for the judge is not an easy task. She added: “Quite apart from deciding what is still ‘hotel operation’ and what is no longer ”hotel operation.'" The fact remains that if this district judge had ruled otherwise, potentially 100 status holders would have ended up on the street. There was no alternative for them. This is clear from the verdict, and that is where I think politics falls short.

So while I disagree with the verdict on substantive legal grounds, I understand the judgment.