5 June 2024

Can the lessor suspend quiet enjoyment under the lease following late payment?

By Glenn Kerver

Two interesting conclusions by Advocate General Valk were published some time ago.

In it, he shed light on the generally accepted view that a lessor cannot suspend its obligation to provide quiet enjoyment under a lease. The A-G concludes that neither case law, nor any specific rent legislation, provides grounds for such an assumption.[1] In other words, a lessor may deny a lessee access to the leased property in response to rent arrears, provided that this does not constitute a form of taking the law into one’s own hands.

This issue is relevant to practice, as lessor often ask whether they can’t simply replace the locks to the leased property when lessee’s are in arrears, rather than going through costly and time-consuming litigation.

Background

Both case law from the lower courts and the literature have repeatedly argued that a lessor cannot suspend its obligation to make a leased residential or commercial property available because of late payment by the lessee. For example, in this regard see the leading Asser series:

“A lessor cannot suspend its obligation to make leased property available in connection with late payment by the lessee. In fact, there is a continuing obligation that cannot be fulfilled for the past if the lessee settles its arrears” (Asser/Rossel & Heisterkamp 7-II 2021/27).

The basis behind this view is that a lessor cannot subsequently fulfill its obligation if the lessee still pays the rent due.

Another argument is that, due to the special position of lessees and the rent protection to which they are entitled, Article 7:231 of the Dutch Civil Code (Burgerlijk Wetboek) stipulates that, in principle, a lease can only be terminated by the courts (leaving aside termination due to the closure of the leased property by order of the municipality). Other agreements can also be terminated without judicial intervention by a written declaration of one of the contracting parties. Suspending quiet enjoyment under a lease would prejudice the protection of Article 7:231 of the Dutch Civil Code.

Finally, it should be noted that the provision of quiet enjoyment under a lease is a core continuing obligation of the lessor, which cannot be suspended without a court judgment.[2]

Conclusions of Advocate General Valk

Valk stresses that Dutch law has no rule prohibiting the suspension of continuing obligations or core obligations. As an example, he refers to case law regarding the suspension of rehabilitation obligations in the event of a failure to continue payment of wages. According to Valk, it cannot be concluded from the fact that a lessee subsequently still pays the rent arrears that the lessor was not permitted to suspend its obligations at the time of denial of access; this should be the responsibility of the defaulting lessee. Therefore, according to Valk, it is generally incorrect that a landlord cannot deny access to the lessee.

What is relevant in this respect is how this takes place. In the present case, the lessor had insisted that the lessee vacate and leave the leased property. After the lessee left, the lessor replaced the locks and refused to grant access until the arrears were settled. According to Advocate General Valk, exerting such pressure is understandable under the circumstances and not unlawful.

This would differ, according to Valk, if the lessor denied access to the leased property through “force, threats or trickery” as this would be a form of taking the law into one’s own hands that does circumvent the rent protection mentioned above.

Conclusion

The conclusions are worth reading and shed an interesting light on a commonly held view. To the disappointment of some lessors, this does not mean that the locks on the leased property can be replaced without consultation in order to force the termination of the lease relationship. In this sense, court proceedings still adhere to the customary route.

Under circumstances, however, a lessor may refuse to give the lessee access to the leased property until the lessee fulfills its lease obligations. Indeed, it is hard to understand why a lessor would be obliged to continue to perform, while the lessee fails to pay the agreed amount for this performance.

[1] ECLI:NL:PHR:2023:1196 and ECLI:NL:PHR:2023:1204.

[2] See for example Arnhem-Leeuwarden Court of Appeal 7 August 2018, ECLI:NL:GHARL:2018:7133, paragraph 5.8.

More information

Do you have a legal question about tenancy law? Please do not hesitate to contact me or one of our other specialised lawyers.

Glenn Kerver

Glenn Kerver

Lawyer

Glenn works in real estate & tenancy law and liability law.

Related blogs

5 June 2024

Can the lessor suspend quiet enjoyment under the lease following late payment?

Two interesting conclusions by Advocate General Valk were published some time ago.

Read more

29 May 2024

Rent price review of business premises

One of the most important parts of a lease is the rent price. Over time, the rent price may no longer be in line with market rates.

Read more

20 May 2024

To what extent is the requirement that residential accommodation is the primary place of residence mandatory for contractual joint tenancy?

Most tenancy agreements for residential accommodation include the requirement that the accommodation is the primary residence.

Read more