Reinier advises national and international companies
reinier.russell@russell.nl +31 20 301 55 55The landlord of a store has been given more rights in the event that his lessee goes bankrupt. The trustee is not allowed to lease the property to a third party without the landlord’s permission. This is not allowed in most leases for retail space. However, this does make it more difficult to relaunch a bankrupt shop or retail space.
Previously, we informed you about the position of the landlord when the lessee goes bankrupt:
The Supreme Court of the Netherlands has recently strengthened the position of the landlord in the event of the lessee’s bankruptcy. The trustee who, in anticipation of a substitution or relaunch, wishes to give the leased property into use by a third party, requires the landlord’s permission to do so.
If the trustee knows that the estate will be insufficient to pay the debt to the landlord and nevertheless ignores contractual prohibitions and/or the objections of the landlord, the trustee can be held personally liable for the damage the landlord is suffering (lost rent).
The judgement of the Supreme Court covers all the obligations of the lessee/trustee not to do anything that is actively violated by the trustee, such as, for instance, the prohibitions on store rentals included in the ROZ model agreements:
This judgement means that it will be more difficult to realize a relaunch of a store after bankruptcy. If the potential successor lessee intends to start activities in the retail building before the relaunch has been fully completed, he will need the landlord’s permission. Without the permission of the landlord, the shop will remain closed until the relaunch and substitution are completed with all risks of losing the accrued goodwill, etc.
If the relaunch concerns a retail chain, the relaunching party will have to make separate arrangements with all the landlords. It also increases the risk that the relaunch will fail, because the landlords of the most attractive locations will seize the opportunity to replace the bankrupt lessee with a better lessee.
Do you have any questions about renting or letting business premises or other questions concerning your real estate property? The specialists at Russell Advocaten are happy to give you advice. Please contact us:
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