Taking over the lease (subrogation)

Published by:
Netherlands Chamber of Commerce, KVK
Netherlands Chamber of Commerce, KVK

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 the place of the previous owner in the rental or lease contract, when there is a company takeover. The contract will remain valid, and the same conditions and agreements apply. For example, agreements on the rental price and the term.

Subrogation is a legally established practice, laid down in the rules and regulations on renting company premises. In Dutch, it is called indeplaatsstelling.

Only for small-firm businesses accommodation

Subrogation can only be used if you buy or sell a company with a small-form business accommodation (middenstandsbedrijfsruimte). Or, in other words, a retail space, which is open to the public. You sell your product or service directly to the customer. Examples are shops, garages, or hairdressers. 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.

When can you use subrogation?

To use subrogation, you must meet three conditions:

  • There must be a company takeover. The new business owner has to 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.
  • The new owner must be able to prove that they can honour the rental contract. For example, with a bank guarantee. They must also be able to prove they are able to manage the business.
  • The previous owner must have a good reason for selling the business: a zwaarwegend belang. For example, because they are retiring, or because the sales price is exceptionally high.

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. For one thing, it will give you clarity on your leasing or rental arrangements during the sale. If you buy or sell the company before you have settled this, you may not be able to apply for subrogation anymore.

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.

Questions relating to this article?

Please contact the Netherlands Chamber of Commerce, KVK