Introduction

THE NETHERLANDS: The scope for successor landlords to realize the new destination has been increased. Based on Dutch law, a successive landlord may dissolve the lease if he wants to bring the leased property in line with the destination. In a landmark ruling, the district court North-Holland dissolved the leases (conditionally) so that the property developer could undertake new construction. The case involved the transformation of business premises into housing. For this, a so-called off-plan exemption from the zoning plan based is sufficient. Moreover, the successor landlord may apply for the environmental permit for this.

Below you will read in short what is important, what was at play in this case and what the legal options are for project development.

In short

1. An environmental permit with an off-plan exemption based on current Dutch law is equivalent to a zoning plan;
2. It is irrelevant whether the environmental permit had already been granted at the time the successor landlord acquired ownership of the leased property; and
3. For “valid” it is sufficient that it is plausible that the environmental permit will become “irrevocable” in the future.

What was at play in this case?

The landlord leases commercial premises to two companies. A property developer wants to build new housing there, which does not fit within the “office” destination in the zoning plan. The landlord applies to the municipality of Haarlemmermeer for an environmental permit with an off-plan exemption for dwellings. The landlord dissolves the leases by letter, but the tenants do not accept this.

Therefore, the landlord claims conditional dissolution of the leases before the district court. In particular, the tenants defend themselves by arguing that the leases cannot be dissolved, because the new construction does not fall within the zoning in force. Does the environmental permit to be granted with an off-plan exemption make the leases dissolvable?

The district court ruled that the leases were indeed conditionally dissolved. First, an off-plan exemption is equivalent to a zoning permit. A deviation from the zoning plan under Dutch environmental law involves the same legal figure as under old law. Second, it does not matter whether the destination is placed on the leased property before or after the acquisition of ownership. The landlord may apply for the environmental permit after acquisition. Third, “valid” means that the zoning plan has been irrevocably adopted (in other words, has become untouchable). In this case, the environmental permit had not yet been granted. However, the application had been submitted. It was sufficient for the conditional claim that it was plausible that the environmental permit will be granted.

Practical possibilities

In practice, the effect of this ruling is that the successive landlord can dissolve the lease if he wants to bring the land and structures into conformity with the destination under the (to be granted) environmental permit. A lease agreement and zoning plan need not stand in the way of transforming real estate. As a developer, this gives you more flexibility to respond to market needs. In other words, this development offers opportunities for property developers to enable transformation if there are still tenants.

Contact

Do you have questions about the dissolution of the lease due to the realization of the destination? Or obtaining an environmental permit with an off-plan exemption for a new destination? Feel free to contact us. For those who want progress.

Rogier Visser

Attorney-at-law partner rental law, liability and real estate law (practice group real estate)

Werner Altenaar

Attorney-at-law administrative law and environmental law (practice group real estate)