From the commencement date of the rent agreement, the parties are obliged to fulfill their obligations. As a result, the landlord must make the rented property available to the tenant, among other things; the tenant must, among other things, pay the rent on time and in full.
Termination of the rental agreement
If the tenant does not pay the rent owed by him, he fails to fulfill this obligation. In principle, he entitles the landlord with that to dissolve (ontbinden) the lease. Article 6:265 of the Dutch Civil Code stipulates namely that every breach of contract the other party the entitlement gives to dissolve the agreement, unless the breach of contract, given its special nature or minor significance, does not justify this termination with its consequences.
Unlike most agreements, however, a rental agreement cannot be dissolved out of court. The dissolution can only be pronounced by a judge. If the lessor wishes to terminate the lease agreement due to payment arrears on the part of the lessee, he must therefore apply to the subdistrict court.
Termination in case of three months rent arrears
The subdistrict court judges (cantonal judges, in Dutch: kantonrechters) have mutually agreed that the breach of contract of the tenant of a house in principle only justifies the dissolution if the rent arrears equals an amount of at least three times the monthly rent. If the rent arrears are less than three months, the court will in principle reject the request for dissolution, arguing that the breach of contract does not justify the dissolution with its consequences, given its special nature or minor significance.
Subdistrict courts have not made such agreements for the lease of business premises (retail space, business space within the meaning of Section 7:290 of the Dutch Civil Code and other business space, including office space, sheds and warehouses). However, case law shows that subdistrict court judges often seek a connection with this three-month term, even in those cases.
Some people think that in the event of rent arrears, the landlord can never dissolve the rental agreement for that reason, as long as the tenant ensures that the rent arrears remain less than three months. However, this is a big misconception. If there are structural payment arrears, this can at any time justify dissolution, regardless of the exact height thereof.
No guarantee on eviction in case of rent arrears of three months
Although the subdistrict court judge in principle dissolves the tenancy agreement if the rent arrears are three months or more, this is not a done deal. Even if there are rent arrears of more than three months, the court may come to the conclusion that the breach of contract, given its special nature or minor significance, does not justify the dissolution with its consequences.
You can think of situations in which:
• the rent arrears arose due to special circumstances, for example as a result of temporary absence due to illness; and/or
• rent arrears can be payed off in short term, for example because the tenant’s financial situation has improved.
A second chance: terme de grâce or conditional dissolution
If the subdistrict court judge wants to accommodate the tenant, but also wants to take into account the interests of the landlord, the subdistrict court has two options.
In the first place, the subdistrict court can offer the tenant a last chance to pay off (largely) the rent arrears within a short term, often one or two months. This is also known as a terme de grâce.
Alternatively, the subdistrict court may conditionally dissolve the lease. The lease will then be terminated, unless the tenant adheres to certain conditions (generally payment obligations).
Eviction in summary proceedings
As mentioned, the lease can only be dissolved through the subdistrict court. This is to protect the tenant. However, this makes it extremely difficult (read: impossible) for the landlord to terminate the lease in the short term. A procedure in the subdistrict court, if the tenant approaches it a bit tactically, can quickly take 9 to 12 months (or even longer).
Such a claim cannot be assessed in summary proceedings (kort geding). In summary proceedings, however, the lessor can claim eviction of the leased property. Such a request will in principle be granted by the preliminary relief judge (voorzieningenrechter) if he expects that a judge will dissolve the agreement in any proceeding on the merits. In this way, a landlord can still achieve in a (relatively) short term (often 3 to 4 months) that the tenant has to leave the rented property.
It is fair to report that this process is not entirely risk-free for the landlord. If the latter evicts the leased property with the permission of the subdistrict court, he is liable to pay compensation to the tenant if the judge on the merits rules in subsequent proceedings on the merits that there is no ground for dissolution of the lease. In practice, such risks are generally surmountable, because few tenants make such a claim after the leased property has been vacated.
Do you have a tenant who does not pay the rent? Or does your landlord want you to leave the rented property? Our lawyers have a lot of experience with such matters and are happy to discuss with you what they could do for you.