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Legal advice

Penrose has a team of lawyers that specialise in Real Estate in the Netherlands. To contact our Dutch legal team, click here.

Expertise

Tenancy law

Under Dutch law, a rental agreement is an agreement in which one party makes something available (for example, a business premises or a car) to another in return for a consideration. This is referred to as the rental payment. A rental agreement is often drawn up in respect of immovable real estate such as a commercial real estate or a residence. Tenancy law sets out many relevant issues in respect of which the tenant of a residence or a retail outlet is provided with a range of important safeguards. Provision is made in the rental agreement for many issues that deviate from or are supplementary to the law, covering: the rent, rental period, provisions, notice of termination, bankruptcy, giving possession, vacating and subletting.

Board of the Association of Owners

When a building is divided into apartments to be acquired by different owners, it is obligatory under Dutch Real Estate law to establish a Building Association, also called an Association of Owners (in Dutch: VVE). Purchasers of apartments automatically become members of the VVE. One cannot renounce one’s membership of an VVE as long as the apartment is in legal possession.

 

Those with an apartment have a right to the exclusive use of that apartment. Thus, under Dutch law the apartment is not owned but this apartment right. This right is transferable and may be secured by a mortgage. The VVE is the legal entity which owns the building. It represents the interests of the owners and manages the common areas of the building, such as the stairways and the elevator. The VVE is run by a board of directors, similarly to an ordinary association. In the case of large VVEs, the board might be assisted by a professional external building association manager. With smaller VVEs, it is often the apartment owners themselves who make up the board of the VVE. The board of directors represent the VVE and is mainly responsible for the finances and maintenance. An VVE should also be aware that its board members may be subject to directors’ and officers’ liability. The committee is appointed and fired by the VVE meeting. For more information on this click here.

Purchase and sale of Real Estate in the Netherlands

In practice, the purchase or sale of a business premises, shop or residence (or a portfolio) often follows the same pattern. Once the choice is made, there follows an offer, which at first may be indicative. An offer is generally made subject to a number of preconditions. These are also called resolutive conditions, such as a building survey clause or a financing arrangement clause. The agreement in principle is often set down in a Letter of Intent or a Term Sheet. After that follows the technical, financial, legal due diligence and tax due diligence. The sale and purchase agreement is then drawn up and has to be evaluated. Simultaneously, as a rule, the bank financing and securities tend to be arranged. Once the purchase agreement has been evaluated, agreed and signed, it is time for the transfer of the building(s), payment and establishment of the securities, all to be executed by the Dutch civil-law notary.

Real Estate contracts

The purchase and sale of Dutch real estate, the financing of real estate, mortgage rights and the letting of real estate. Every link in this chain has its own Netherlands law contract. But the rental or letting of office space is also legally regulated by law different from the rental or letting of living space or a retail space. The rental agreements therefore differ greatly on subjects such as the options for temporary rental, rent increases, the termination of the agreement and the possibility of eviction.

Dutch Real Estate specialists

Penrose employs lawyers specialised in Real Estate who are pleased to assist you and answer your questions. To contact our Dutch Real Estate specialist, click here.

Specialists
Frederik Feenstra portret

Frederik Feenstra

Attorney at law
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