Hospitality, an uninvited or invited guest for condominium communities?

The Netherlands is increasingly building upward. By 2040, the number of high-rise towers is expected to double compared to 2020.[1] These towers often include hotels, making the buildings multifunctional spaces for work, living, and entertainment. This trend is known as hybridization—the multi-purpose use of a building that combines residential, hospitality, and retail functions. It creates a dynamic environment that enhances the experience for residents, guests, and neighbors.

But how do the interests of different owners within a building align? What if a hotel needs to undergo renovations or wishes to expand? Can a hotelier proceed at their own discretion, or must they consider the wishes and interests of the other property owners? In this article, we explore how hoteliers—whether as owners or tenants of an apartment right (appartementsrecht)—must relate to other owners in the same building. First, we explain how shared property ownership works in the Netherlands, followed by some practical challenges and their solutions.

Apartment Rights

In real estate, the principle is that everything attached to a property forms one legal entity. To enable multiple parties to co-own a building, Dutch civil law includes the concept of appartementsrechten (apartment rights). These rights do not just refer to residential apartments but allow several (legal) persons to own parts of the same building. Along with partial ownership, each party is granted exclusive usage rights to a specific section of the building (e.g., a certain floor or unit). Additionally, they share the use of common areas (like the entrance, roof, or lobby) and shared infrastructure (such as ventilation systems, wiring, and plumbing). With so much shared space, it’s unsurprising that conflicts can arise from differing intentions and expectations.

To manage this shared ownership in an orderly and democratic way, Dutch law requires that any building divided into apartment rights must have a Vereniging van Eigenaren (VvE), or homeowners’ association.

The VvE supervises the rights of all apartment rights holders and manages the communal parts of the building—not the individually owned sections. This means each owner is free to organize and use their own space, such as a hotel occupying the first five floors, according to their preferences. However, this freedom is not unlimited: owners must ensure that their usage or modifications don’t conflict with the rights of others. In such cases, a hotelier must seek approval from the VvE before carrying out plans. This is often where things go wrong in practice.

Conflicting Rights and Real-World Examples

It’s not uncommon for hotel owners or tenants to face obstacles from the VvE when their plans don’t align with the association’s wishes. Here are two illustrative cases:

1. Renovation of shared property
A hotel operator owns several floors of a building. To improve ventilation for the rooms and the restaurant kitchen, they plan to install a new ventilation system. Detailed architectural and contractor plans are drawn up, and the necessary municipal permits are secured.

Despite these efforts, the hotel operator cannot proceed without the VvE’s consent, as the installation impacts the entire building and other owners’ rights.

2. Purchasing and operating additional units
Even if a hotel is already operating within a building, expanding operations by purchasing additional apartment rights requires VvE approval. Many deed-of-division (splitsingsakte) agreements include clauses that prohibit commercial rental of units.

Each unit in a building has a designated function (residential, hotel, office, etc.). If the hotel owner buys more units with a residential designation, they may not be allowed to use them for hotel purposes, depending on the stipulations in the splitsingsakte.

Court Authorization as a last resort

A hotel operator should thoroughly review the splitsingsakte and (if applicable) the building's internal rules. A VvE cannot arbitrarily block hotel plans—they must have reasonable grounds. For instance, if they can show that the building or their specific units will decrease in value. A common argument is that the hotel’s operation (or expansion) will cause nuisance.

If the operator can demonstrate that the value will not decrease or that sufficient steps will be taken to prevent nuisance, then the VvE cannot justifiably block the plans. In such cases, the hotelier can apply to a judge for substitute authorization.

The Role of the Splitsingsakte and Rental Contracts

It's crucial to carefully examine the deed of division (splitsingsakte) for clauses about the use of common property. These agreements are interpreted literally—if a specific use isn't clearly permitted, it may not be allowed. This includes whether specific units can be used for commercial or hotel purposes.

Even when leasing space for hotel use, it must be clear whether the landlord is legally allowed to permit such use. If not, the lease might be valid, but the hotel operator could be denied usage rights—and may have to claim damages from the landlord.

Conclusion

Sharing a building means hotel owners must cooperate with other apartment rights holders. For hotel expansions, alterations, or renovations, it may be necessary to obtain approval from the VvE first.

[1] Stichting Hoogbouw, Hoogbouw in Nederland 2020, December 2020.