Impact of corona crisis on rental relations

As of Sept. 30, there is an opinion from the Attorney General at the Supreme Court of the Netherlands (Mr. M.H. Wissink) on how to deal with the questions raised by the Roermond subdistrict court at the end of March 2021. Questions about how to deal with the consequences of the corona crisis on the rental relationship between a landlord and a tenant of a catering establishment. In particular, the question of whether a tenant is entitled to a rent reduction and, if so, how high that reduction should be.

Attorney general's opinion

The main conclusion of this opinion is that it is held that there is a defect and that there are contingencies. The manner in which a rent reduction is then granted to a tenant will best be judged across the bow of contingencies.

Fixed charge method

The Attorney General recommends using the so-called "fixed expense method", which the Amsterdam Court of Appeal used in a decision of September 14, 2021 (ECLI:NL:GHAMS:2021:2728 (Dam Square/Swissôtel)), namely:

(total actual fixed expenses - TVL amount) x (rent portion of actual fixed expenses) x percentage turnover reduction x 50%.

Why the fixed charge method?

The Attorney General recommends (see recitals 5.26 to 5.28) that the fixed charge method be adopted because it best reflects a number of key principles in the discussion at hand;

• Thus, it is believed that the corona crisis has affected rental enjoyment (the ability to operate), as reflected in decreased sales;
• That in return for this impairment of the enjoyment of rent, a certain reduction in rent is justified, however, to the extent that the rental costs are not already offset by a public subsidy;
• And in which, furthermore, the pain is basically shared 50/50 between tenant and landlord.

That fixed charge method works with the actual amounts of total fixed charges, rental charges and TVL allowance. Therefore, there is no need to deviate to a percentage of rental charges calculated by CBS as part of fixed charges, which of course may differ from the actual ratio applicable to a particular tenant.

Other concerns

Other subsidies, such as NOW, TOZO and TOGS, are (in principle) not taken into account. Ultimately, however, the specific circumstances of the case will have to be considered each time, which may influence the method to be used. So in specific cases a different approach may be chosen. Also, in some cases there may be a very specific lease. No account is taken of any subtenants. Each time a consideration must be made in the relationship between main landlord and main tenant and the same must take place in the relationship between tenant and subtenant.

Conclusion

There is a very comprehensive opinion to the Supreme Court. Only the most important conclusions have been named here. It is expected that the Supreme Court will follow the Attorney General's advice in answering the preliminary questions that have been raised. But it is now waiting for a final opinion on the matter from the Supreme Court. Hopefully that will soon follow and the discussions between tenants and landlords, as well as the corona crisis itself, can soon be put behind us.

Attached is a link to the opinion. https://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:PHR:2021:902