Defects in leased property – commercial premises

Article 7:204 et seq. Dutch Civil Code

A defect is a condition or characteristic of the rented property that results in the tenant having reduced enjoyment of the property. It must not be attributable to the tenant and must fall outside what may reasonably be expected of a properly maintained property. A factual disturbance caused by third parties does not qualify as a defect. For example, if a business located next to the property causes odour or vibrations, this will in principle not be at the landlord’s risk. Minor repairs, such as replacing light bulbs or installing draught strips, are also not considered defects.

The concept of a defect has a broad meaning. A tenant of a neglected building may require the landlord to remedy defects, even if those defects were already visible to the tenant at the commencement of the tenancy agreement.

Derogation from statutory rules

For residential property, it is not permitted to deviate from the statutory provisions regarding defects. For other types of premises, such as retail or office space, deviation is allowed. Parties may, for example, agree that certain circumstances do not constitute a defect. In the case of the lease of a dilapidated shed at a very low rent, it may be assumed that the parties intended that the landlord would not remedy the defects.

The statutory rules oblige the landlord to remedy defects. If the landlord fails to do so, even after being given formal notice of default, the tenant may remedy the defects themselves (or have them remedied) and deduct the costs from the rent.

Rent reduction

If a defect reduces the tenant’s enjoyment of the property, the tenant may apply to the court for a proportionate reduction of the rent. The reduced rent will apply from the moment the landlord was sufficiently aware of the defect until the day it is remedied. For residential property, it is not possible to derogate from this rule. For other premises, deviation is permitted, unless the landlord knew or ought to have known of the defect at the start of the tenancy.

Consequential loss

In some cases, there may also be consequential loss. For example, where household contents are damaged by a leak, or where a business cannot operate due to a defect. The landlord is only liable for consequential loss if the defect arose after the commencement of the tenancy and is attributable to the landlord, or if the landlord knew or ought to have known of the defect at the start of the tenancy, or guaranteed that the property was free of the defect.

Liability for consequential loss may be excluded in the case of retail and office space, except where the landlord knew or ought to have known of the defect at the commencement of the tenancy.

Do you have a question about defects in rented property? Or do you have another legal question? Please feel free to contact us. We will be happy to assist you.