Court issues groundbreaking verdict: Rent reduction in substantive proceedings for catering operators as a result of the lockdown – mr. C. Damen – dated February 1, 2021

Last Wednesday, a controversial ruling was made and published for the first time (ECLI:NL:RBDHA:2021:461), in which the court believes that there is reason to reduce the rent of two The Hague catering operators by half as a result of the lockdown . This is the first ruling in so-called proceedings on the merits in which the court rules that, given the nature and scope of the corona crisis, there is an unforeseen circumstance within the meaning of art. 6:258 BW, so that the two café operators in The Hague only have to pay half of the rent during the lockdown.

In recent months, the judge has often examined in preliminary relief proceedings whether rent reductions for catering operators would be permitted as a result of the corona measures. Nevertheless, the first allocation of rent reduction in proceedings on the merits has a heavier legal weight. The ruling is special because of the possible positive influence on the negotiation process between catering operators and their landlords and is probably a stick behind the door in any negotiations regarding rent reduction in connection with the corona measures.

The present case concerned two bar operators in The Hague who were summoned by the landlord for overdue rent. The landlord was a private investor and demanded, among other things, the eviction of the two catering establishments. The café operators in The Hague defended themselves with the statement that they could no longer pay the rent due to a loss of turnover due to the drastic government measures. The court determined that, in view of its nature and scope and the consequences for the economy and society, the corona crisis can therefore be regarded as an unforeseen circumstance within the meaning of art. 6:258 DCC can be considered. It is considered that the parties have not been able to take this pandemic and its consequences into account in the rental agreement concluded between them or that they should expect this from each other. The fact that, according to the lessor, the pub operators in The Hague had a restaurant in the past and therefore knew the tricks of the trade, does not mean that they should have taken into account a situation such as the present one, according to the opinion of the Court. court.

With this groundbreaking ruling in hand, it does not seem inconceivable that the negotiating position of catering operators will be provided in possible lease negotiations. Especially in the weeks in which catering operators are forced to close their doors, the catering entrepreneurs have been hit hard financially and massive loss of turnover was suffered in the catering industry. Other industries, such as the retail industry, have also been hit hard by the lockdown. It is assumed that these entrepreneurs could also appeal to a possible rent reduction in comparable situations. The ruling appears to be a clear signal from the court to tenants in industries affected by the lockdown, demanding a more balanced distribution of financial pain between tenants and landlords.

With this legal development, it seems wise for catering and retail operators to talk to landlords about any agreements about rent reduction as a result of the lockdown. It is paramount that the parties could reasonably distribute any financial pain more evenly in order to avoid unnecessary friction in the future. However, if the parties have already made an arrangement regarding a possible rent reduction as a result of the lockdown, the chances for the tenants may be different.

If you are confronted with no longer being able to pay rent due to the lockdown, you should be alert.