In an update of 7 January 2021, we reported that, slowly but surely, the first judgments in proceedings on the merits were being published and that it was becoming clear what consequences the corona crisis could have on rental agreements. Recently, another judgment was published. Although two catering businesses (a restaurant and a café) had contractually ruled out the possibility of a rent reduction, the District Court of The Hague ruled on 21 January 2021 (ECLI:NL:RBDHA:2021:461) that these two catering businesses were nevertheless entitled to a rent reduction.
Claim in the main action
The landlord claimed dissolution of the lease contract, eviction from the leased property and payment of rent arrears. The basis of the claim was that the months of April to June 2020 had been left unpaid. The tenants had tried to reach different agreements with the lessor through proper consultation, but the parties could not reach agreement. The landlord wanted to (continue to) receive the full rent.
The tenants counterclaimed for an amendment to the lease. They based their claim on the fact that the landlord had not made the leased object available in accordance with the lease, that the inability to operate was a defect, that the corona crisis was an unforeseen circumstance and that full payment of the rent was unacceptable in view of the closure measure in the light of reasonableness and fairness.
The Subdistrict Court ruled that the total rent arrears were no more than two months and were therefore insufficient (serious) to allow the landlord’s claim for dissolution of the lease. On the other hand, the Subdistrict Court ruled that there was a defect. The tenants did not have the rental enjoyment that they were entitled to expect at the start of the lease. The take-away and delivery services present did not make any difference, since the leased property could still only be used partially. Finally, the court ruled that there were unforeseen circumstances, because “an unaltered continuation of the lease contract” was deemed unacceptable according to the standards of reasonableness and fairness. Contrary to the contractual provision, an appeal to reduce the rent could therefore succeed. The resulting financial loss had to be divided between the parties. To determine the percentage/amount of the rent reduction, the court compared the figures for 2018 and 2019 with those for 2020. The outcome: a rent reduction of 50% for the period from 15 March 2020 to 31 May 2020 and from 15 October 2020 until the end of the closure measure and a rent reduction of 25% for the period from 29 September – 14 October 2020.
Meanwhile, several conclusions can be drawn from the first “corona” rulings. For example, it is important for lessees to provide access to the financial data, as the court seems only to grant rent reductions when it is clear that turnover has also been lost. It is also important whether the case concerns a “hard” closure (closure by order of the government, such as the catering industry, contact professions and, recently, other shops) or a “soft” closure (closure based on the urgent advice to work from home as much as possible).
If you have any questions regarding this article, please contact Dominique Fransen.
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February 10, 2021