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Russell Advocaten B.V.
Amsterdam, Netherlands

The lessor of a store has been granted more rights in the situation that his tenant goes bankrupt. The bankruptcy trustee may not rent the building to a third party without the lessor's permission. This is not permitted in most leases for retail space. However, this makes a restart of a bankrupt store or retail space more difficult.

Bankruptcy tenant

Earlier we reported about the position of the landlord if the tenant goes bankrupt :

  • The rent is an estate debt, the lessor is a preferred creditor.
  • The landlord and the bankruptcy trustee can prematurely terminate the rent with a short notice period.
  • If the bankruptcy trustee realizes a restart, he can, by substitution - if necessary with the help of the court - prevent the lessor from getting the leased property at his free disposal again.

Strengthening the position of the lessor

The Supreme Court recently strengthened the position of the lessor in the tenant's bankruptcy. The bankruptcy trustee who, in anticipation of a substitution or relaunch, wants to give the rented property to a third party in advance, requires the consent of the lessor.

If the bankruptcy trustee knows that the estate will fail to pay the debt to the lessor and if he nevertheless ignores contractual prohibitions and / or objections from the lessor, the bankruptcy trustee can be personally liable for the damage suffered by the lessor (missed rent) .

Sub-letting ban, adjustments to the leased property, etc.

The judgment of the Supreme Court applies to all obligations of the tenant / receiver to not do something that is actively violated by the receiver , such as, for example, the prohibitions included in the ROZ model agreements for shop rental:

  • of subletting;
  • to have environmentally hazardous substances in or near the rented property; and
  • to make changes to the outside of the rented property.

Consequences for starting entrepreneur

This ruling means that it will be more difficult to restart a store after bankruptcy. If the potential succeeding tenant wants to start with activities in the shop before the restart is fully realized, he will need the consent of the lessor for this. The shop will remain closed without the landlord's permission until the restart and substitution have been settled with all the risks of losing the accumulated goodwill, etc.

If the restart concerns a retail chain, the restarter will have to make separate agreements with all landlords. This also increases the risk that the restart will fail because the lessors of the most attractive locations will use this opportunity to replace the bankrupt tenant with a better tenant.