For general information, see Government of the Netherlands information on rented housing.
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? In that case, tenant substitution can 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 transfers his tenancy rights 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 wishes to transfer the business operated in the premises to a third party (for example, by sale) and has a compelling interest (zwaarwichtig belang) in that transfer.
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The proposed new tenant offers sufficient guarantees for full performance of the lease and for proper business operation; if not, the court must refuse.
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The court weighs all circumstances of the case, including the landlord’s interests, and may attach conditions to its authorisation.
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 bring a claim before the subdistrict court (the law speaks of a claim, vordering).
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You must show that you are transferring the business.
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The judge assesses whether you have a compelling interest in the transfer and whether the proposed tenant offers sufficient guarantees, taking all circumstances into account.
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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 (illustrative)
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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?
The court must refuse substitution if the proposed tenant does not offer sufficient guarantees for full performance of the lease and for proper business operation (Article 7:307(2) DCC).
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 assist entrepreneurs with preparing and conducting proceedings.
More frequently asked questions
What is tenant substitution in commercial leasing?
Tenant substitution allows the current tenant of a commercial property to transfer their lease rights to another party, who then takes over the lease under the same conditions. This is used when the business operated in the premises is transferred to a third party, for example on a sale.
When can I request a court to approve tenant substitution?
You can request court approval if the landlord refuses to cooperate voluntarily, and you have a compelling interest in transferring the business and the proposed tenant offers sufficient guarantees for full performance of the lease and for proper business operation (Article 7:307 DCC).
Which types of commercial premises are eligible for tenant substitution?
Tenant substitution applies to commercial premises such as shops, cafes, restaurants, and craft businesses, but not to other types like offices or storage spaces.
Why is tenant substitution important for business owners?
Tenant substitution helps preserve the value of a business, ensures continuity for the buyer, and provides legal protection to enforce lease transfer even if the landlord resists.
