12 December 2022
The market share of flexible office concepts will increase significantly in the coming years.
This is according to research commissioned by NVM Business. From a rental law perspective, flex concepts raise interesting questions. Such as whether ‘flex contracts’ are leases within the meaning of the law. In this blog, I consider flexible office concepts from a rental law perspective.
There is no set definition of the term flexible office concepts. In the literature, flexible office concepts are sometimes defined as: “a building with one or more spaces and possibly shared facilities and/ or services offered to more businesses”.[1] NVM defines it as follows: “a flexible office concept refers to the leasing of office space, where the end user has the choice of various forms of office space that can be used for a shorter or longer period and where a wide range of services can often be purchased, depending on need”.[2]
There is also little practical guidance for a clear definition. For example, both fixed workstations and flexible workstations in a larger space (with or without communal facilities) are offered as a flex concept.
There are different names for flex concepts. For example, people can use the terms ‘co-working spaces’, ‘flex offices’ or ‘flex workspaces’. There are also different types of flex contracts: from leasing to membership.
As a result, it is difficult to give one definition of flex concepts. From a rental law perspective, it is especially interesting when a flex concept does not qualify as a lease.
Article 7:201(1) of the Dutch Civil Code (Burgerlijk Wetboek) defines a lease as an agreement whereby the lessor undertakes to give the lessee the use of all or part of a property and the lessee undertakes to provide a counter-performance. In principle, any agreement that meets that definition is a lease. Regardless of the name given to the agreement by the parties. What is decisive is the factual nature and content of the legal relationship between the parties when the agreement was entered into.[3]
In other words, if a property or part thereof is given to the user for use in a flex contract and the user has to pay a fee for it, then in principle the flex contract is a lease regardless of whether it is called a membership or otherwise. This seems to answer the qualification question, but appearances can be deceptive.
This is because the property to which the use relates must be sufficiently determinable under Article 6:227 of the Dutch Civil Code and that where the rub is with flex concepts.
If the flex contract involves the use for a fee of a clearly designated office space, then this is property that is sufficiently determinable. The agreement therefore qualifies as a lease. A lease also exists when the user has the right to use one specifically designated and therefore ‘fixed’ workstation in a shared space. The property is therefore sufficiently determinable. The fact that the user does not have exclusive use of the entire space does not alter this.[4]
It becomes more complicated with regard to a ‘real’ flex space, where the user may use a workstation in a shared space, but the workplace can vary. The provider then guarantees ‘one’ workplace, but not a fixed one or always the same one. Is there then still ‘property’ within the meaning of Article 7:201(1) of the Dutch Civil Code and thus a lease? In case law and literature, there are different views on this.
For example, the Amsterdam Court ruled that when using flexible workplaces that are designated from day to day, there is no doubt as to what is rented, so the leased property can be sufficiently determined and a lease exists.[5] The Rotterdam Court also ruled that a lease exists in a case where non-specifically designated parking spaces in a car park were made available for a fee.[6] In a nutshell, case law rules that there is a lease relatively quickly.
However, the literature takes a critical view of case law, for example, in the annotation of mr. I.C.K. Mol with regard to the Rotterdam ruling.[7] This explains why the ruling of both Courts is incorrect. Mol points to the requirement that commitments must be sufficiently determinable and she believes that non-specifically designated parking spaces or workplaces are not sufficiently determinable, making rental law inapplicable.
Together with Mol, I take the view that a right to use a non-specifically designated workplace is insufficiently determinable within the meaning of Article 6:227 of the Dutch Civil Code and therefore does not constitute a right to use a part of ‘property’, as referred to in Article 7:201(1) of the Dutch Civil Code. For that reason, I therefore consider that there is no lease.[8]
Given the expectation that the market share of flexible office concepts will increase significantly, I am curious to see how the case law develops. I am happy to keep you updated in this respect.
Do you have any questions about flexible office concepts from a rental law perspective? If so, please feel free to contact me or one of the other specialists at GMW advocaten to discuss your options.
[1] i.a. Weijs-Perrée, M., Appel-Meulenbroek, H.A.J.A., De Vries, B., & Romme, A.G.L. (2016), ‘Differences between business center concepts in The Netherlands’, Property Management, 34(2), p. 100-119.
[2] NVM Business, 2018. De opkomst van flexibele kantoorconcepten [The emergence of flexible office concepts].
[3] i.a. Supreme Court 24 December 1993, EcLI:NL:Hr:1993:ZC1198.
[4] See De jonge, De Wijkerslooth-Vinke & Gelink (ed.), Parliamentary History bW Book 7, Title 4 2009, p.155.
[5] Court of Amsterdam 15 July 2010, cV 09-45426
[6] Court of Rotterdam 6 June 2019, EcLI:NL:rbrOT:2019:4908
[7] I.C.K. Mol, TvHB 2019/19.
[8] Cf. Van Dalsum, ‘Flexibele kantoorconcepten en het huurrecht’ [Flexible office concepts and rental law], TvH 2020/7, p. 11 et seq.
