Anyone who wishes to terminate the lease of their commercial premises, or who faces termination by the landlord, must first know which regime the lease falls under. As set out in the first part of this series, fundamentally different rules apply to 7:290 commercial space (shops, hospitality, craft businesses) and to 7:230a commercial space (offices, storage, practice rooms). That difference is nowhere as decisive as in termination.
For 7:290 commercial space, the landlord can only terminate the lease on an exhaustive number of statutory grounds, and strict formal requirements apply. For 7:230a commercial space the threshold for the landlord is much lower: termination is in principle free of formal grounds and requires no reason. This article works out both situations.
Termination of 7:290 commercial space
Formal requirements
Termination of 7:290 commercial space is subject to strict formal requirements. The termination must be made in writing, either by registered letter or by a bailiff’s writ. The minimum notice period is one year. A termination that does not meet these requirements is null and void and has no legal effect. The lease then simply continues.
The termination must be addressed to the tenant before the end of the current rental period. Anyone who terminates too late will see the lease automatically extended by the next term.
Grounds for termination for the landlord
The landlord of 7:290 commercial space may only terminate on grounds the law lists exhaustively. For termination at the end of the first term (the first five years) only two grounds apply: the tenant does not behave as a good tenant (persistently poor tenancy), or the landlord urgently needs the leased property for personal use. After the first term a third ground is added: the weighing of the landlord’s interests in termination against the tenant’s interests in continuation, in which the landlord must demonstrate a compelling interest.
For a detailed discussion of the individual grounds for termination and the case law on them, we refer to the article ‘Commercial Tenancy (7:290 DCC): Protection & Grounds for Termination of Retail Space’ elsewhere on this website.
The tenant who wishes to extend
The tenant of 7:290 commercial space who receives the termination but wishes to stay must object in writing within six weeks of receiving the termination. If they do not, the lease ends on the notified date. If they do object, the landlord must submit the termination to the subdistrict court. Only if the court grants the termination does the lease end. Until then the agreement continues.
Termination of 7:230a commercial space
The main rule: termination without grounds
For 7:230a commercial space the law is much more lenient towards the landlord. The lease ends after termination, observing the notice period agreed in the contract, or in its absence the statutory term. A ground for termination is not required. The landlord need not explain why they wish to terminate. The tenant has in principle no right to continuation.
Protection against eviction: postponement via the court
Although the tenant of 7:230a commercial space has no right to extension of the lease, they do have a right to protection against eviction. This means the following: after the lease has been terminated and the landlord has given notice of eviction, the tenant can ask the subdistrict court within two months of the eviction date to extend the eviction period. The court weighs the interests of both parties. The maximum extension is one year per request, with a total maximum of three years.
Protection against eviction is therefore not a right to continued enjoyment of the lease, but merely postponement. After the maximum term has expired, the premises must be vacated.
Early termination and the role of break options
For both 7:290 and 7:230a commercial space, the contract may contain a break clause: a contractual provision giving the parties the right to terminate the lease prematurely. For 7:290 commercial space such a clause must be proportionate to the protection the law affords the tenant; a provision effectively giving the landlord the right to terminate at any time may conflict with the mandatory character of the regime.
Anyone using a break clause must comply with the exact procedural requirements: the correct term, the correct form (registered or by writ), and the correct date on which termination is given. One day too late means the termination has no effect and the lease continues for the next period.
Tacit renewal is likewise a point of attention. If the lease expires and neither party terminates, the agreement is in most cases tacitly renewed for the duration of the original period or for an indefinite term, depending on the contract wording. Check in good time whether renewal is desired.
Common mistakes in termination
In practice we see recurring mistakes in the termination of commercial premises:
- Terminating too late, so that the one-year notice period is exceeded and the lease automatically continues for the next term.
- Terminating without the legally required form (by ordinary email or telephone instead of by registered letter or writ), making the termination null and void.
- As a landlord, terminating without a recognised ground for 7:290 commercial space, after which the tenant calls in the subdistrict court and the termination is annulled.
- As a tenant, failing to object in good time to a termination of 7:290 commercial space, so that the right to continuation lapses.
- Forgetting the delivery obligation: even if the termination is valid, the tenant may be liable for damage caused by the premises not being returned in the contractually agreed condition.
- For 7:230a commercial space, missing the two-month period for filing a request for protection against eviction, after which that right definitively lapses.
Conclusion
Termination of commercial premises seems simple, but on closer inspection it has countless formal and substantive pitfalls. Whether you are a tenant or a landlord: a mistake in the procedure can lead to a continuing rental relationship you do not want, or to the loss of protective rights you could have used. Always check the deadlines, the required form and the applicable regime in good time before you send or receive a termination.
The tenancy lawyers of Law & More assist you in all phases of a termination procedure, from the first letter to any proceedings before the subdistrict court. Contact us for a no-obligation conversation.
Frequently asked questions
How long is the notice period for commercial premises?
For 7:290 commercial space the statutory minimum notice period is one year. The termination must be made in writing by registered letter or bailiff’s writ. For 7:230a commercial space the term agreed in the contract applies; there is no statutory minimum.
Can a landlord simply terminate the lease of a shop?
No. For 7:290 commercial space the landlord may only terminate on grounds exhaustively listed in the law, such as urgent personal need or persistently poor tenancy. A termination without a recognised ground has no legal effect.
What is protection against eviction under 7:230a?
After termination of the lease, the tenant of 7:230a commercial space can ask the subdistrict court to extend the eviction period. This request must be filed within two months of the notified eviction date. The maximum extension is three years in total.
What is a break clause in a lease?
A break clause is a contractual provision giving one or both parties the right to terminate the lease prematurely. For 7:290 commercial space such clauses must be consistent with the mandatory statutory protection of the tenant.
More from this series on commercial tenancy law
This article is part of our three-part series on commercial tenancy law. Read the other parts as well:
