As an entrepreneur, you can rent commercial premises in the Netherlands. But what happens if you want to transfer your business, for example by selling it or closing it? In that case, tenant substitution be a solution.
The tenancy law lawyers at Arslan Advocaten explain what tenant substitution entails, how it works legally, and when a court can grant it.
What is tenant substitution?
Tenant substitution means that the tenant of commercial premises his tenancy rights transfers to another. The new tenant (for example, the purchaser of your business) then takes your place and continues the lease agreement under the same conditions.
This arrangement applies only to commercial premises within the meaning of Article 7:290 BW, such as:
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shops
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hospitality (cafés, restaurants)
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craft businesses
Not for other types of commercial premises (such as offices or storage spaces).
When is substitution possible?
The law allows substitution if:
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The tenant transfers their business (for example, by sale).
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The new tenant is willing and able to assume the obligations under the lease agreement.
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The landlord has no serious objections to the new tenant.
If the landlord does not cooperate voluntarily, the tenant can ask the court for permission.
Procedure before the court
The procedure for substitution proceeds via the subdistrict court judge:
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You submit a petition.
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You must show that you are transferring the business.
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The judge evaluates whether the new tenant is suitable and whether the landlord has any compelling grounds to refuse.
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If granted, the new tenant is substituted for you.
Why is lease substitution important?
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Value of your business
The value of a business often lies in the location (for example, a café or shop in a prime location). Without lease substitution, the sale may be more difficult or less lucrative. -
Continuity for the buyer
The buyer of your business can immediately continue with the same premises and customer base. -
Tenant protection
The law provides the tenant with a means to compel a lease assignment, even if the landlord resists.
Examples from practice
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Restaurant in Amsterdam: the owner wanted to sell his business, but the landlord did not want to accept a new tenant. The court nevertheless granted the lease assignment to the buyer.
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Clothing store in Utrecht: the landlord refused the lease assignment because the new tenant had insufficient financial means. The court sided with the landlord.
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Café in The Hague: upon transfer to a family member, the court granted the lease assignment, because continuity was guaranteed.
Checklist for entrepreneurs for lease assignment
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📑 Ensure a clear purchase agreement for your business.
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💶 Verify that the new tenant is financially reliable.
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📝 Put agreements with the landlord in writing.
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⚖️ Initiate legal proceedings in a timely manner if the landlord refuses.
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👨⚖️ Seek assistance from a tenancy law attorney.
Frequently Asked Questions (FAQ)
1. Does tenant substitution also apply to offices?
No, only for commercial premises such as shops and hospitality (7:290 BW).
2. Does the landlord have to agree to tenant substitution?
Not always. If they refuse, you can go to court.
3. What if the new tenant is financially weak?
Then the landlord can raise this as a compelling objection, and the court may refuse substitution.
4. How long do court proceedings take?
On average a few months, depending on how busy the court is.
Conclusion
Substitution is a powerful tool to preserve the value of your business upon sale or transfer. If the landlord is obstructive, you can still have the court order that the new tenant takes your place.
The tenancy law attorneys of Arslan Advocaten have extensive experience with substitution and assist entrepreneurs with preparing and conducting proceedings.
