Substitution of Tenant

The definition of substitution of tenant is as follows: “The situation in which a person to whom a business is transferred also becomes the tenant of the commercial premises. The (former) tenant may petition the subdistrict court to authorise the substitution, enabling the new tenant to take over the lease.”

When a business is transferred, the tenant of the premises in which the business is operated, often the entrepreneur themselves, has a clear interest in ensuring that the lease agreement can be transferred to the new owner. This process is known as substitution of tenant (indeplaatsstelling). It is regulated by law and can be enforced through the courts in cases where the landlord does not voluntarily cooperate.

The court may authorise the tenant of a commercial property governed by Section 290 of the Dutch Civil Code to substitute the new tenant in their place. For such substitution to be granted, the current tenant must demonstrate a compelling interest in the transfer of the business, while the prospective tenant must provide sufficient (financial) guarantees to fulfil the obligations under the lease.

Specialist in Substitution of Tenant

Helma Sengers specialises in advising on and drafting substitution of tenant agreements. She is a real estate lawyer with extensive expertise in the purchase and sale of real estate, apartment rights and easements. Helma has focused her practice on advising and litigating in matters relating to lease and purchase agreements, including termination of lease agreements due to renovation, rent disputes and non-conformity.

Differences between Substitution of Tenant and Contract Assignment

Substitution of Tenant

• Cooperation of the landlord is not required.

• No deed is required between transferor and transferee.

• Only possible in the event of a transfer of the business operated in the leased premises.

• Only permitted if the tenant has a compelling interest in the transfer.

• Court authorisation may replace the landlord’s consent.

Contract Assignment

• Cooperation of all contracting parties is required;

• A deed between transferor and transferee is required;
• Possible without a transfer of the business operated in the leased premises;
• No compelling interest is necessary;
• No court authorisation is required.