Taking over the lease (subrogation)
Are you selling your business, or taking over someone else's business? It may be possible for the new company owner to take over the existing lease or rental contract for the premises. This means the new owner rents at the same price, and under the same conditions. Read how subrogation works.
What is subrogation?
Subrogation means that the new owner of a company can take over the rental or lease contract. The contract remains valid with the same conditions and agreements. For example, agreements on the rental price and the term. In Dutch, subrogation it is called indeplaatsstelling.
When can you use subrogation?
To use subrogation you must meet 4 conditions:
1. The space is open to the public
For example, shops, garages, or hairdressers. This is known as small-form business accommodation (middenstandsbedrijfsruimte). You sell your product or service directly to the client. Special rental rules apply to small-form business accommodations.
Part of the value of a small-firm business accommodation is its location. The seller has invested in the space and in the reputation. Subrogation helps to preserve that value. And the buyer knows what they are dealing with from the start.
2. There must be a company takeover
The new business owner must continue a similar activity in the business accommodation. If the new owner wants to start a different type of company in the premises, they cannot use subrogation.
3. The new owner must be able to pay the rent
You must be able to prove this. For example, with a bank guarantee. You must also be able to prove that you are able to manage the business.
4. The previous owner must have a good reason for selling the business
In Dutch, this is called a zwaarwegend belang. For example, because the previous owner is retiring. Or because they can sell their business for a particularly high price.
Apply for subrogation in time
Do you want to use subrogation? Make the necessary arrangements during the company takeover process. The seller (the tenant) must apply to the landlord or lessor. Make sure you only buy or sell the company when this is settled. Applying for subrogation is often not possible afterwards.
What if the landlord does not cooperate?
If the landlord does not want to cooperate, the tenant can apply for subrogation at court. The court will assess whether you meet all the conditions. This way you will know during the sales process if subrogation is possible.