Many entrepreneurs who rent a shop, office, or catering establishment will sooner or later face renovation plans by the landlord. Think about major maintenance, reconstruction or sustainability. Often the landlord wants to partly pass on the cost in the form of a rent increase. But is that allowed?

The rental rights lawyers of Arslan Advocaten explain the rights and responsibilities of the tenant and landlord in the renovation of a business space.

What is renovation?

The law understands renovation to encompass:

• Maintenance work (such as repair of overdue maintenance, painting, new piping systems).

• Improvements (such as insulation, new kitchen, expansion of the business space).

This can be major in business premises: a shopping center being renovated or a dinning establishment that has to temporarily close.

Can the landlord enforce renovation?

Yes, the landlord has in principle the right to renovate. But:

• The renovation should not be unreasonable for the tenant.

• The landlord should hold discussions with the tenant.

• For major renovations, the landlord can initiate a legal procedure if the tenant refuses.

Rent increase after renovation

The landlord can ask for a rent increase after renovation, but only under certain conditions:

1. Agreement with the tenant

   • In many cases, the tenant must agree to the proposed rent increase.

2. Reasonableness

   • The rent increase should be proportional to the value of the improvements.

3. Procedure via the court

   • If the tenant and landlord disagree, the judge can decide whether the renovation and rent increase are reasonable.

Temporary eviction during renovation

Sometimes temporary eviction is necessary to make renovation possible.

• This is only allowed if the landlord can demonstrate that the work cannot be carried out without eviction.

• The tenant should be able to return to the business space after the renovation, unless otherwise agreed.

• Damage or loss of turnover could be at the expense of the landlord, depending on the situation.

Examples from practice

• Shop in Utrecht: the landlord renovated the shopping center and wanted to pass on a 30% rent increase. The judge ruled that this was too high and moderated it to 10%.

• Restaurant in The Hague: had to temporarily close due to renovation. The landlord was required to pay compensation for lost turnover.

• Office space in Amsterdam: the tenant resisted renovation because of high costs. The judge ruled in favor of the landlord because the improvements were necessary and the rent increase was reasonable.

Checklist for entrepreneurs during renovation

• 📑 Check if the renovation is really necessary.

• 🧾 Request a cost overview and substantiation of the rent increase.

• ⚖️ Object if the renovation or increase is unreasonable.

• 💶 Negotiate a temporary rent reduction in case of inconvenience or loss of turnover.

• 👨‍⚖️ Engage a lawyer in case of dispute or impending procedure.

Frequently asked questions (FAQ)

1. Can my landlord just increase the rent after renovation?
No, only if this is reasonable and proportional to the improvements.

2. Can I refuse to cooperate in the renovation?
Only if the renovation is unreasonable or unnecessary. Often, the judge will decide in that case.

3. Should I temporarily leave my business space during renovation?
Only if it really can’t be helped. You should be able to return afterwards.

4. Do I get compensation if lost revenue due to renovation?
In some cases, yes. This depends on the circumstances and any agreements.

Conclusion

Renovation of business space can lead to increase in rent and temporary inconvenience. Landlords are allowed to carry out renovation, but tenants have rights to protection against unreasonable costs or consequences.

The rental rights lawyers of Arslan Advocaten assist entrepreneurs in negotiations and procedures about renovation and rent increase.