Vacancy in shopping center: rent reduction?

Is vacancy in a shopping center grounds for a lower rent? Under the law, when a tenant enjoys less rental enjoyment as a result of a defect in the leased property, he is in principle entitled to a rent reduction (regardless of the cause of the defect), unless the parties have contractually excluded this right. To do so, however, the tenant must go to court and is only entitled to a reduction in rent proportional to the reduction in the tenant's enjoyment. A case where such a claim was raised is the following.

The facts

Carpetright has been renting business premises forming part of a shopping center in Alkmaar since 1992. At the time the agreement was concluded, there were two entrances to the leased premises for shoppers. Access one was located on the center side of the complex, where shoppers could walk in through the adjacent store. The second access was adjacent to a secluded corner of a parking lot at the rear of the complex. The adjacent store became vacant at some point and the access on the center side of Carpetright was closed by the landlord.

Interlocutory appeal: reduction in rent

Carpetright claimed rent reduction in summary proceedings. It argued that various defects in the leased property resulted in the loss of its rental income. There was vacancy in the complex and the landlord did not address this vacancy. In addition, landlord would not make efforts to present the complex attractively and did not maintain the complex and the parking lot. The closure of the entrance on the center side of Carpetright would also constitute a defect.

Vacant complex no shortage

The court ruled that the vacancy in the complex was not a defect justifying a rent reduction. The landlord cannot be blamed for business premises in a complex becoming vacant. Indeed, vacancy is largely caused by bankruptcies and lease terminations due to economic downturns. In addition, Carpetright could not expect the occupancy of the complex to remain unchanged: this is part of the entrepreneurial risk of any business owner. The fact that the landlord did not rent the vacant premises in the complex to other tenants is also not his fault, according to the court.

Yet defects assumed

The closing of the access on the center side of the leased property and the poor state of repair of the complex and parking lot did qualify the court as a defect justifying a proportionate reduction in the rent. The access on the center side was essential for the influx of shoppers. The overdue state of maintenance was evidenced by the fact that graffiti was not removed, litter remained and the paving of the parking lot was in poor condition making it unrepresentative. The judge therefore reduced the rent by 10%.