Is the rent price review of catering and retail premises comparable?

How does this apply to rent price reviews for catering and retail premises? In practice, the question of which commercial premises are comparable regularly arises, for example, in the case of a rent price review of catering premises. Can retail premises be listed as comparable commercial premises?

‘Comparable’ and ‘in the area’

In a rent price review, the current rent is compared with the rent for comparable commercial premises in the area. And that is where the problem lies, because what exactly is meant by ‘comparable’ and ‘in the area’? And can we compare (the rent for) retail premises with (the rent for) catering premises?

In practice, it is impossible to find truly comparable commercial premises in the immediate vicinity. After all, all commercial premises have their own unique location, size, appearance and accessibility. The term ‘comparable’ therefore often causes the most discussion when determining the reference list of commercial premises. But what about the contractual permitted use (retail vs. catering)?

What do politicians think of the rent price review of catering and retail premises?

It can be seen from the parliamentary history of the provision for rent price review (formerly Article 7A:1632a of the old Dutch Civil Code) that the Minister briefly discussed the concept of ‘comparable commercial premises in the area’:

“(…) we are of the opinion that highly casuistic issues such as these, by their very nature, should not be regulated by law but should be left to the factual judgement of the courts and experts. (…) We note, however, that taking into account the nature of the business of the establishment does not fit into the system of the law, which only takes into account the rents of comparable premises.” [1]

It is assumed that, according to the legislator, the contractually permitted use of the commercial premises is not a criterion for determining whether premises are comparable or not.

What does case law say?

The Supreme Court also ruled that the contractually permitted use of commercial premises is, in principle, irrelevant to answering the question of whether commercial premises can be considered comparable. All that is relevant is that there are commercial premises within the meaning of Article 7:290 of the Dutch Civil Code.[2] This means that office space (Article 7:230a of the Dutch Civil Code) is not included. According to the Supreme Court, the size of the space, the width of the façade, the location (busy shopping street or market square, etc.) are among the factors that must be considered. The lower courts follow the line of the Supreme Court.[3]

What do the experts say?

It seems that even experts do not seem to want to get involved with the issue of comparison. The Lease of Commercial Premises Manual (Handboek Huurecht Bedrijfsruimte) simply refers to the discussed legislative history for the comparability of commercial premises. It only says that the contractual permitted use should not play a role according to legislative history and case law. Experts such as Kepestein, Kinderman and Asser/Rossel & Heisterkamp also refer to the prevailing doctrine and opinion.[4]

Evers, however, is of a different opinion; in summary, she thinks that we should compare catering premises with other catering premises as far as is possible. Evers argues that it is preferable to compare catering premises with other catering premises and retail premises with other retail premises.[5] Although this is perhaps ‘out of the box’ thinking, I wholeheartedly endorse this argument.

What do those in the field think?

In practice, lessees are often surprised by the comparison of their catering premises with nearby retail premises during a rent price review. The main reason is obvious: rents for retail premises are usually considerably higher.

Following Evers and Nijsten, among others, I am of the opinion that in the rent price review of catering premises, wherever possible, comparisons should be made with other nearby catering premises and –   only in very exceptional cases – with retail premises.[6]

Do you have any questions about rent price reviews for catering and retail premises? Or would you like more information? Please do not hesitate to contact us.

[1] Parliamentary Papers II 1979/80, 15 666, no. 5, p. 6 (MOR).

[2] i.a. Supreme Court 25 October 1985, ECLI:NL:HR:1985:AC9063 (Heineken/Dela).

[3] i.a. Amsterdam Court of Appeal 24 May 2016, ECLI:NL: GHAMS:2016:2009, Court of North Holland (Subdistrict Court) 3 October 2018, ECLI:NL: RBNHO:2018:8072, Court of Overijssel 5 February 2019, ECLI:NL:RBOVE:2019:703; and Court of Rotterdam 25 July 2019, ECLI:NL: RBROT:2019:6005.

[4] N. Amiel and others, Handboek Huurrecht Bedrijfsruimte, Deventer: Den Hollander 2018, p. 228 and 229; G.M. Kerpestein, Huurrecht bedrijfsruimte, The Hague: Sdu Uitgevers 2012, p. 708; J.A. Kinderman, Huur van bedrijfsruimten, Zutphen: Uitgeverij Paris 2014, p. 333-336; Asser/Rossel & Heisterkamp 7-II 2017/700, p. 515.

[5] M.F.A. Evers, Huurrecht bedrijfsruimten Recht en PraktijkVastgoedrecht VG3, Deventer: Wolters Kluwer 2011, p. 181.

[6] G.J.J. Nijsten