Leasing 230a or 290 business premises? What do these terms mean anyway? And, most importantly, what are the consequences of this difference for lessors and lessees of business premises?
Whether it concerns 290 business premises or 230a business premises does have significant consequences for the lease agreement. For example, the lease of 290 business premises is subject to fixed terms, has different rules for determining the rent and is more difficult to terminate than the lease of 290 business premises. We will discuss this in more detail in three subsequent blogs.
Let’s talk about the origin of the terms first. Article 7:290 of the Dutch Civil Code defines the lease agreements to which the regulations for leasing business premises in Articles 7:290-310 of the Dutch Civil Code apply. In practice, this mainly concerns premises of medium-sized businesses (retail) and other location-based businesses, which require additional protection of the lessor.
Article 7:230a of the Dutch Civil Code determines the termination of leases of real estate that is not subject to the special regulations for leases of residential or business premises. To be on the safe side, the legislator added “within the meaning of this Title”. Rightly so, because many business premises are not covered by the legal regime for leasing business premises. For which businesses does the stricter regime of 290 business premises apply?
Whether the statutory regime for the lease of business premises applies, is determined by what the parties have agreed upon and the uses of the leased property as envisioned when the agreement was concluded. This concerns use only as:
The condition is that the premises in questions is accessible to the public and that movable goods or services are provided directly. Thus, the warehouse of a flash delivery company, a company restaurant or a mail-order bookstore in which no customers are allowed are not covered by this regulation. Hotels and campgrounds, however, may restrict public access to those who have booked the accommodation. If the business premises include a residence, this residence also falls under the rental protection for business premises.
The answer to the question whether it concerns 230a business premises is easy. All business premises that do not fall under 290 business premises and do not include a residence are covered by 230a business premises. In principle, this applies to all offices, factories, institutions, etc. If a business is exploited in a residence, where the entrepreneur also lives themselves, in principle, the rental protection of residential property will apply.
So the question always is: Does the lease agreement fall under the protection of 290 business premises or not? This is not always clear as can be seen from the following examples.
Although the name suggests otherwise, this also includes large department stores such as the Bijenkorf. It also includes artisans using retail space to sell their own products. Where the supply of products is concerned, this does not only include sales, but also rentals. A shop-in-shop-formula carried out on the basis of a lease agreement also constitutes 290 business premises. The same can apply to a shop located in a building with a different purpose, such as a flower shop in a hospital or a museum store.
This depends on whether the income from food and drinks is sufficient to pay the rent. Therefore, a Moroccan meeting place and a conference room at a church, the operation of which had been outsourced, were considered as 290 business premises. This did not apply to a gym with a bar since only a limited portion of revenue was derived from the bar.
This is limited to old-fashioned pickup and delivery services where customers can offer or pickup parcels. Modern flash delivery companies with dark stores, where only delivery drivers have access and no customers are allowed, are not covered by this regulation.
Whether something is a craft or not is not always clear. This may involve both 1) the skills required and 2) the size of the business. After all, factory production does not count as a craft. Regarding the products or services provided, the Rotterdam District Court recently ruled that a car polishing company was not a craft and therefore the company did not lease 290 business premises.
A beautician did not exercise a craft either, according to a court, as she did not make or repair products. And such a free profession apparently includes a freer rental regime for 230a business premises. However, the lease of a barber’s chair in a barber shop, to which mainly the same considerations apply, was considered by another court to be 290 business premises.
If the premises are not accessible to the public, they do not fall under 290 business premises. This applies, for example, to online shops where orders cannot be picked up. Company restaurants only accessible to employees of the company and club houses of sports clubs or golf courses where only members are allowed access are excluded from the regulation for 290 business premises. In contrast, a gallery and an art studio were considered open to the public, even though the visitors had to ring the bell before being admitted. The deciding factor was that any interested party could ring the bell.
For craft businesses, the ability to receive the public is essential to fall under 290 business premises. For example, the studio of a potter who only sells products elsewhere does not fall under this regulation, whereas it does if people can also visit the studio for buying products. This can be a close call. For example, a furniture showroom where customers can come and order is covered by the 290 regulation, but a furniture showroom designed only to give furniture dealers an idea of what products they might sell is not.
It happens regularly that the use of retail or hospitality space is part of another agreement, such as a franchise, lease or operating agreement. The question is then how these agreements relate to each other. For example, can the lease of a shop in which the formula is operated be terminated at the same time as the franchise agreement. It will then depend on the circumstances which part of the agreement has more weight. For example, a catering business could not invoke rent protection even though it used the premises of a public restaurant in addition to providing catering services.
In addition, the same lease may include multiple spaces with different uses. Think of a warehouse, which includes a store or a gym with a bar. The question is then which purpose is decisive. For example, attempts to present dark stores as stores failed because the warehouse function was dominant. On the other hand, the lease of a warehouse used primarily as a sales outlet can change from 230a business premises to 290 business premises.
Do you have any questions about the which law is applicable to your lease agreement? Do you have a dispute with a lessee or lessor of business premises? Russell Advocaten will be happy to help you. Please contact:
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