Defects in commercial premises: who repairs and when can you reduce rent?

If your commercial premises have a defect, the landlord must in principle repair it at your request, and you can claim a rent reduction for the period in which the defect limits your use of the premises. The main exception is your lease: most commercial leases shift a large part of the maintenance to the tenant, and that is largely allowed.

When is there a defect in the legal sense?

A defect (gebrek) is any condition or characteristic of the premises, or any other circumstance not attributable to the tenant, that prevents the premises from giving you the enjoyment you were entitled to expect when you entered into the lease (Article 7:204 of the Dutch Civil Code, BW).

The definition is broader than physical damage such as a leaking roof or a broken heating system. A circumstance outside the premises can also be a defect, for example serious nuisance from building works for which the landlord is responsible. What counts is whether the enjoyment you could reasonably expect is impaired.

Not every setback is a defect. Normal wear and tear from ordinary use is not, and neither is a problem you caused yourself. Disturbance by third parties who claim no right to the premises, such as burglars or noisy passers-by, is also not a defect under Article 7:204(3) BW; in that case you must act against those third parties yourself.

What you could expect also depends on what was agreed. If you rented a building knowing it was old and in need of renovation, you cannot later demand the standard of a new build.

Who must repair the defect: the landlord or you?

Under the main rule of Article 7:206 BW, the landlord must remedy defects at your request. This applies unless repair is impossible or requires expenditure that cannot reasonably be expected of the landlord in the circumstances.

The landlord cannot escape the obligation simply by pointing to the costs. The question is whether the costs are disproportionate to the rent and the value of the premises, not whether the repair is expensive.

Minor repairs are an exception. Under Article 7:217 BW, small repairs are for the tenant’s account. For housing, a government decree lists what counts as a minor repair; for commercial premises, custom and the lease determine this. Think of replacing a broken door handle, a light switch or a damaged skirting board. The boundary between a minor repair for you and major maintenance for the landlord is not always sharp and often leads to discussion.

How do standard lease terms change this?

Commercial leases are almost always based on the standard models of the Dutch Real Estate Council (Raad voor Onroerende Zaken, ROZ). The general provisions of these models shift many maintenance obligations from the landlord to the tenant, such as interior maintenance, the maintenance of installations and the replacement of parts that wear out.

This is largely permitted. The statutory rules on defects in Articles 7:206 to 7:208 BW are not mandatory for commercial premises, so the parties can agree otherwise. Two important limits apply. First, under Article 7:209 BW, the landlord cannot contract out of liability for defects that he knew or should have known when the lease was concluded. Second, a clause can be set aside if relying on it is unacceptable under the standards of reasonableness and fairness.

Whether your premises are regulated as retail space (Article 7:290 BW) or as other commercial space (Article 7:230a BW) does not change this. That distinction mainly matters for termination protection and rent review. Read more in our article on which regime applies to your commercial premises.

Read the general provisions carefully before you sign, and check which version of the ROZ model and which maintenance schedule apply. They often differ from contract to contract.

What can you do if the landlord does not repair a defect?

Report the defect in writing and, if the landlord does not act, send a formal notice of default (ingebrekestelling). That notice gives the landlord a reasonable period to carry out the repair and states what you will do if the period passes without result.

Describe the defect as concretely as possible, add photographs and, if relevant, an expert’s report. Keep copies of all correspondence. The notice of default is important for two of your remedies, compensation and self-repair, because they depend on the landlord being in default.

Rent reduction

If a defect reduces your enjoyment of the premises, you are entitled to a proportionate rent reduction for the period in which the defect exists (Article 7:207 BW). The reduction reflects the ratio between the enjoyment you actually have and the enjoyment you would have had without the defect.

The reduction does not require a notice of default, but it does require that the landlord knows of the defect. You are not entitled to a reduction for the period before you reported the defect to the landlord, unless the landlord already knew about it. That is why you should report every defect in writing and without delay.

Unlike residential tenants, commercial tenants cannot go to the Rent Tribunal (Huurcommissie). If you and the landlord cannot agree on the reduction, the subdistrict court (kantonrechter) decides. Many ROZ leases exclude or limit the right to a rent reduction; within the limits described above, such a clause can be valid.

Compensation

If the defect is attributable to the landlord, you can claim compensation under Article 7:208 BW. This applies, for example, if the defect arose after the lease was concluded and the landlord failed to carry out necessary maintenance, or if the defect already existed at the start and the landlord knew or should have known of it.

The damage can include lost turnover and costs you incurred to keep your business running, such as temporary storage or alternative space. You must prove the damage and the causal link with the defect.

Repairing the defect yourself and setting off the costs

If the landlord is in default, you may carry out the repair yourself and deduct the reasonable costs from the rent (Article 7:206(3) BW). This right has clear limits, and using it wrongly exposes you to a claim for rent arrears.

First, it must concern a defect that the landlord is obliged to repair. If the maintenance rests on you under the lease, you cannot pass on the costs. Second, the landlord must actually be in default: you must be able to show that you gave the landlord a reasonable period to carry out the repair and that the landlord failed to do so. Third, the costs must be reasonable and in proportion to the defect.

Check also whether your lease restricts set-off. The ROZ general provisions usually exclude it. A tenant who withholds rent without a sound legal basis may face termination of the lease for non-payment. Seek advice before you deduct anything from the rent.

Termination of the lease

If a defect makes the use of the premises entirely impossible, either party can terminate the lease by a written statement (Article 7:210 BW). If the defect makes use only partly impossible, you can ask the court to dissolve the lease in the event of a serious shortcoming. Termination is a far-reaching step for a business and is rarely the best first move.

Are exoneration clauses in commercial leases valid?

Often they are, but not always. An exoneration clause is a provision by which the landlord excludes or limits liability for certain damage, and the ROZ general provisions contain several.

A court can set an exoneration aside if the damage results from intent or deliberate recklessness on the part of the landlord or its management, or if relying on the clause is unacceptable under the standards of reasonableness and fairness. The limit of Article 7:209 BW, for defects the landlord knew or should have known at the start, also applies.

If the clause is part of general terms and conditions, it can be annulled as unreasonably onerous under Article 6:233 BW. For consumers this is readily assumed; between businesses the bar is much higher. Larger companies, such as companies that publish their annual accounts or employ 50 or more people, cannot invoke this protection at all (Article 6:235 BW).

Have your lease reviewed before signing, particularly for large premises or a long lease term. The division of maintenance and the exoneration clauses determine who bears risks that can easily run to considerable sums.

Can the rent be adjusted because of the condition of the premises?

For retail and hospitality premises under Article 7:290 BW, either party can ask the subdistrict court to set the rent at the level of comparable premises in the area. For other commercial space under Article 7:230a BW, that statutory right does not exist.

Under Article 7:303 BW, the request can be made after the agreed term has expired and, after that, each time five years after the rent was last set. The court bases the new rent on the average rents of comparable premises in the locality over the preceding five years, and must first obtain an expert’s report.

For other commercial space under Article 7:230a BW, the rent can only change by agreement, usually through an indexation clause. Rent review is not a remedy for a defect, but the condition of the premises can play a role in the valuation.

What should you check as a tenant?

Act quickly and in writing. Under Article 7:207(2) BW you lose rent reduction for the period before the landlord knew of the defect.

• Report the defect to the landlord in writing, with photographs and a date.
• Check in your lease and the ROZ general provisions who bears this type of maintenance and whether rent reduction or set-off is excluded.
• If the landlord does not respond, send a notice of default with a reasonable deadline.
• Record the consequences for your business, such as lost turnover and extra costs.
• Do not withhold rent or repair the defect yourself until the conditions of Article 7:206(3) BW are met.

If you are considering ending your lease altogether, read our article on terminating a commercial lease, which covers notice periods and grounds. The statutory rules on defects are in Book 7 of the Civil Code, available on wetten.overheid.nl.

What should you check as a landlord?

Respond to every defect report in writing and within a reasonable period. Once you are in default, the tenant can repair at your cost and claim damages under Article 7:208 BW.

• Check whether the reported problem is a defect under Article 7:204 BW or a minor repair for the tenant under Article 7:217 BW.
• Check what the lease and the maintenance schedule say about who bears this repair.
• Record known defects at the start of the lease, since Article 7:209 BW prevents you from relying on an exoneration for those.
• Plan the repair and inform the tenant of the date in writing.
• Keep a maintenance plan for the building, so defects do not persist and consequential loss does not build up.

What can we do for you with defects in commercial premises?

Our tenancy lawyers advise tenants and landlords of commercial premises on defects, maintenance and rent.

• We review your lease and the ROZ general provisions to establish who bears the repair.
• We draft the defect report and the notice of default with a reasonable deadline.
• We calculate a proportionate rent reduction and a claim for lost turnover.
• We assess whether an exoneration clause can be set aside under Article 7:209 or 6:248 BW.
• We conduct proceedings before the subdistrict court on rent reduction, damages or rent arrears.

Summary

• A defect is any circumstance not attributable to you that prevents the enjoyment you could expect (Article 7:204 BW).
• By law, the landlord must repair defects, except minor repairs, but commercial leases often shift maintenance to the tenant.
• You are entitled to a proportionate rent reduction from the moment the landlord knows of the defect, unless your lease validly excludes it.
• Self-repair with set-off and compensation require the landlord to be in default, so send a notice of default first.
• The landlord cannot exclude liability for defects he knew or should have known when the lease was concluded.

Frequently asked questions