When a company goes bankrupt, this has major consequences for ongoing contracts, including the lease of the business premises. But what exactly happens to the rent if the tenant goes bankrupt? And what rights and obligations do the landlord, bankruptcy trustee, and any subtenants have?

The rental law lawyers at Arslan Advocates explain what the rules are and how you can protect yourself in the event of bankruptcy.

Bankruptcy of the tenant

When a tenant goes bankrupt, a bankruptcy trustee is appointed who takes over the management of the company.

Rights and obligations of the bankruptcy trustee

• The bankruptcy trustee is allowed to terminate the lease with a notice period of up to 3 months, regardless of what is stipulated in the rental contract (art. 39 Bankruptcy Act).

• Rent must be paid until the moment of termination.

• Overdue rent from before the bankruptcy declaration is regarded as a concurrent claim – the landlord is at the back of the line with the creditors.

Consequences for the landlord

• The landlord cannot simply terminate the lease due to bankruptcy, unless this is properly regulated contractually and accepted by the court.

• Often, the landlord only receives a portion of the overdue back-rent.

Bankruptcy of the landlord

The bankruptcy of the landlord also has consequences:

• The bankruptcy trustee can try to sell the building.

• Current rental agreements remain in effect: the tenant maintains rental protection.

• The buyer of the building must respect the existing rental agreement.

Sublet and bankruptcy

In case of bankruptcy of the main tenant:

• The subtenant depends on the main tenant.

• If the bankruptcy trustee terminates the main lease, the sublease usually also ends.

• Subtenants may sometimes claim compensation, but they often have a weak position.

Examples from practice

• Restaurant in Amsterdam: the tenant went bankrupt. The bankruptcy trustee terminated the rent within 3 months, allowing the landlord to quickly rent the property to another party.

• Shopping mall in Utrecht: the landlord went bankrupt. The retailer was allowed to stay, as the lease was taken over by the buyer of the property.

• Subtenant in Rotterdam: lost his business premises when the main tenant went bankrupt. The subtenant had no independent right to stay.

Checklist for bankruptcy and rent

• 📑 Check whether your rental contract contains provisions about bankruptcy.

• 📅 Be aware of the notice period of up to 3 months by the bankruptcy trustee.

• 💶 Realize that overdue rent is usually only partially repaid.

• 🏠 As a landlord: be alert in case of tenant bankruptcy and claim your rights directly from the bankruptcy trustee.

• ⚖️ Consult a lawyer for strategy in case of a restart or new rent.

Frequently asked questions (FAQ)

1. Can a bankruptcy trustee simply terminate the rent?
Yes, the bankruptcy trustee may always terminate the lease with a maximum notice period of 3 months.

2. As a landlord, will I get my overdue rent back?
Often only partially, as this is a concurrent claim in bankruptcy.

3. Can I, as a tenant, remain if my landlord goes bankrupt?
Yes, current lease agreements remain valid. The new owner must respect these.

4. What happens with sublease if the main tenant goes bankrupt?
The sublease usually ends automatically, unless special arrangements have been made.

Conclusion

Bankruptcy has major consequences for lease agreements. In the event of tenant bankruptcy, the bankruptcy trustee can always terminate the rent within 3 months. However, in case of landlord bankruptcy, the tenant retains rental protection. Subtenants often face additional risk.

The rental law lawyers at Arslan Advocates advise and litigate disputes around bankruptcy and lease agreements, for both landlords and tenants.