Flexible leasing of catering and retail premises: this determines whether deviating clauses are valid

When leasing catering and retail premises, the need for flexibility is becoming increasingly apparent. Landlords want to be able to respond to market developments, while tenants sometimes seek premises to test a new formula without long-term commitments. However, as soon as the parties deviate from the mandatory provisions that apply to catering and retail premises, an uncompromising rule applies: without the approval of the subdistrict court, the deviating clause can be annulled.

Examples of deviating clauses that the subdistrict court must consider often include shorter terms than the statutory 5+5-year term, termination options for the landlord outside the statutory grounds for termination, or termination of the lease by operation of law. The additional grounds for termination often occur in the case of planned renovation or redevelopment. Furthermore, attempts are regularly made to exclude the right to rent review. All these examples require approval by definition because they directly interfere with the protection system provided by the law.

Case law shows that the subdistrict court is becoming increasingly reluctant to approve deviating clauses. Whereas in the past it was sometimes sufficient for the landlord to submit a request together with the tenant and not appear at the hearing, this is no longer the case. For example, the Amsterdam District Court recently rejected a request submitted jointly by Unibail Rodamco (a large international listed real estate company) and tenant Food Bar (a company with one branch and four employees). These parties requested approval for an automatic termination of the lease agreement without notice and exclusion of any claim by the tenant to any form of rent, term or eviction protection, and to any form of compensation for damage or costs, including relocation and refurbishment costs. Quite far-reaching, in other words. According to the petition, Unibail Rodamco's social position compared to that of Food Bar was such that Food Bar did not reasonably need the legal protection. This was not further substantiated and, unsurprisingly, the subdistrict court did not agree: the request was rejected.

When requesting approval for a deviating clause, it is therefore important to take the following points into consideration.

Point of attention one: the position of the tenant

The court will first assess whether the deviating clause does not substantially affect the tenant's rights, or whether the tenant does not in fact need the legal protection. In practice, the latter arises, for example, in the case of professional, financially strong parties with negotiating power, such as larger supermarket chains or large real estate companies. In all other cases, the focus automatically shifts to the question of whether the clause “substantially” affects the statutory rent protection.

This substantial impairment is not an abstract criterion: it concerns the meaning of the provision from which the deviation is made and the extent to which the clause specifically weakens the tenant's position. Deviations from core provisions, such as protection against termination or the right to rent review, are almost invariably considered substantial by the courts.

Point of attention two: compensation for the tenant

However, “substantial” does not automatically mean “impossible”. What is becoming increasingly apparent in practice is the importance of convincing reasoning and appropriate compensation. When parties demonstrate that a deviation is part of a balanced negotiated package, there is scope for the court to rule that the disadvantage to the tenant is acceptable under the circumstances. Examples include a lower initial rent, a rent-free period or a substantial investment contribution. Compensation can mitigate an aggravation, but does not always completely remove its essential nature. This is assessed on a case-by-case basis.

Point of attention three: the clause must be eligible for approval

In addition, not every clause is eligible for approval. Only deviations from the regulations for commercial premises themselves can be submitted for approval. Clauses that benefit the tenant, or provisions that fall outside Section 7.4.6 of the Civil Code, do not require approval. A request for approval of such provisions is therefore not only superfluous, but in some cases may even lead to rejection on the grounds of lack of interest.

An example of a clause from which no deviation is possible is subrogation. This is the right of a tenant of commercial premises used for catering or retail purposes to appoint a third party as the new tenant in his place in the event of a proposed transfer of the business. This can be done by means of a court order if the landlord does not give his consent. This right cannot therefore be contractually excluded, even with the approval of the subdistrict court.

Point of attention three: procedural tips

The request for approval of a deviating clause can be submitted jointly by both parties or separately by one party. A joint request generally increases the chance of approval, but the case of Unibail Rodamco and Food Bar discussed above shows that this is no guarantee of success. Even if the request is submitted jointly, it is always wise to ensure that the tenant has obtained independent legal advice on the deviation(s) and to clearly state this in the request.

There is no statutory deadline for submitting the request; this can also be done after the lease has been entered into and even after the clause has been annulled by the tenant. It is therefore advisable to make agreements about the consequences of obtaining or not obtaining approval when entering into the lease agreement, for example by including a suspensive condition. For example, it can be agreed that if the clause is not approved, a lease agreement of up to two years will be concluded. In that case, the tenant will have much less protection. If the parties fail to do so and the clause is rejected, while the commercial premises have already been made available to the tenant and rent is being paid for them, a regular lease agreement with all the associated rent protection has already been concluded.

Conclusion

What all these developments show is that deviating clauses are perfectly possible, but only if the parties approach them with care. Approval is not a formality, but a balancing test. It comes down to clear reasoning, fair compensation and careful consideration of the interests of both parties.