When leasing office space, you must comply with several legal rules. The most important rules are found in the Civil Code, specifically in the provisions on business premises (Article 7:290 BW and 7:230a BW). Municipal regulations, tax laws and insurance obligations also play a role. The big difference with residential leasing is that commercial leasing offers less legal protection to tenants, but it does entail other obligations for landlords.
What are the basic rules for leasing office space?
The leasing of office space is regulated by the Civil Code, with Article 7:290 BW specifically dealing with business premises such as offices and stores. This legislation is fundamentally different from the rules for residential premises, as business tenants have less protection but different rights.
The Rent Act for business premises states that, as a landlord, you must provide a written contract, a clear description of the leased space, and agreements on maintenance and use. Municipal regulations may impose additional requirements, such as zoning laws that determine what business activities are allowed on the premises.
An important difference with residential leasing is that with office leasing you have more contractual freedom. For example, you can agree shorter lease terms and the notice period is more flexible. However, you must take into account the legal minimum term of two years for smaller office spaces (up to 230 m²), unless both parties explicitly choose a shorter period.
What are the legal requirements for an office space lease?
A lease for office space must include at least the following: the names of tenant and landlord, an accurate description of the leased property, the rent, the effective date and the lease term. Also, agreements about indexing, service charges and notice periods belong in the contract.
Although oral leases are legally valid, written records are always wise. Many landlords use the ROZ (Raad voor Onroerende Zaken) models, which are standard contracts for different types of business space. These models contain all legally required sections and are drafted by lawyers.
For smaller office spaces up to 230 square meters, a statutory minimum term of two years has applied since 2017. This protects small business owners from rental periods that are too short. If you as a landlord want a shorter period, the tenant must explicitly agree to this and this must be clearly stated in the contract. For larger office spaces, you are free to agree on any rental period you want.
The notice period must also be in the contract. For office space, the legal term of notice is at least one year, but you can mutually agree on a different term. Note that the notice must always be in writing, preferably by registered mail.
What is the difference between 290- and 230a-business space?
Section 7:290 BW business premises includes offices, stores and catering premises where a business has direct contact with the public. This category offers tenants more protection, such as the right to continue the lease after the agreed period has expired. Section 7:230a of the Civil Code deals with other operating space such as warehouses, workshops without a public function and production halls.
The main difference is in rent protection. With 290 business premises, the tenant is entitled to an extension after the expiration of the first lease term, unless you as the landlord have compelling reasons to refuse it. These reasons are established by law and include, for example, default by the tenant or self-use by the landlord.
With 230a business premises, this renewal right does not exist automatically. The lease simply ends on the agreed date, without the landlord having to give a reason. This gives you more flexibility, but also means that tenants have less security.
For you as a landlord, it is important to determine in advance which category your office space falls under. A customer-facing office usually falls under 290 space, while a back office without a public function is often considered 230a space. When in doubt, it is best to explicitly state this in the lease.
What about tax liability in office leasing?
Office rentals are in principle exempt from VAT, but you can opt for VAT-taxed rentals under certain conditions. This is particularly interesting if your tenant is a VAT-registered entrepreneur, as they can then reclaim the VAT. For VAT-taxed rental you and the tenant must file a request with the Internal Revenue Service.
The conditions for VAT-taxed rentals are strict. The tenant must use the space for at least 90% for VAT-taxed activities. Think of regular business activities, not, for example, medical or educational activities that are often VAT exempt. Also, as a landlord, you must be a VAT entrepreneur yourself.
In addition to VAT, you must declare rental income for income tax purposes (as an individual) or corporate income tax purposes (as a business). Rental income is taxed, but you may deduct expenses such as maintenance, insurance and depreciation. It is wise to keep good records of all income and expenses.
Note that if you opt for VAT-exempt rentals, you also cannot reclaim VAT on costs you incur for the property, such as renovations or major maintenance. This can be financially detrimental, especially for large investments in the property.
Can you just sublet office space?
Subletting of office space is only allowed if it is explicitly stated in the lease or if the main landlord gives written permission. Without this consent, subletting is a form of breach of contract that can lead to termination of the lease.
There is an important difference between subletting and subletting. With subletting, you as the main tenant remain responsible for complying with the lease. You yourself collect the rent from the subletting tenant and pay it to the landlord. With subletting, you transfer the entire rental contract to a new tenant.
As a landlord, you can impose conditions on subletting. Common conditions are that the subtenant use the premises for the same purpose, that you give prior approval on the identity of the subtenant, and that the main tenant remains liable for all obligations under the main lease.
For tenants looking for flexible office solutions, such as when sharing workspaces, it is wise to get this right up front. Make clear agreements about how much space can be sublet and under what conditions. This prevents discussions afterwards.
What insurances are mandatory as an office space landlord?
As a landlord of office space, you are not required by law to purchase insurance, but it is highly recommended. A building insurance covers damage to the building itself from fire, storms, water and burglary. This insurance is especially important because, as the owner, you bear the risk for the building.
Landlord liability insurance protects you against claims from tenants or visitors who suffer damage due to defects in the property. Think of a visitor slipping due to a broken floor tile, or water damage in the office space due to a leaking roof.
In the lease, you lay out who should take out what insurance. Usually the landlord insures the building (buildings) and the tenant insures the contents and business damage. You can require the tenant to take out contents insurance and business liability insurance. This protects both parties in the event of damage.
| Type of insurance | Responsible party | What does it cover? |
|---|---|---|
| Building insurance | Landlord | Building damage |
| Landlord liability | Landlord | Claims due to building defects |
| Contents insurance | Tenant | Damage to inventory |
| Corporate Liability | Tenant | Damage to third parties |
What are your rights and obligations as a landlord of an office building?
Your main duty as a landlord is the duty to deliver: you must make the office space available in good condition on the agreed date. This means that the space must be suitable for the agreed upon use, with working facilities such as heating, electricity and plumbing. You must also rental enjoyment respect of the tenant, which means that you cannot just enter the premises.
The maintenance obligation is divided between landlord and tenant. As the landlord, you are responsible for major maintenance and structural repairs, such as the roof, foundation and exterior of the building. Minor daily maintenance, such as changing light bulbs or maintaining the central heating boiler, is usually for the tenant.
Your rights as a landlord include receiving timely rent payments and terminating the lease according to the agreed terms. You can terminate the lease in case of non-payment, but you must follow the proper procedure. First, you must give the tenant written notice of default with a reasonable time to still pay.
You also have the right to inspect the premises, but only by arrangement with the tenant and at reasonable times. At the end of the lease, you may demand that the tenant return the space to its original condition, minus normal wear and tear. It is wise to make a recording report at the start of the lease to avoid discussions about this.
Conclusion: this is how to lease office space according to the rules
Leasing office space requires knowledge of various laws and regulations. The main points to remember are: make sure you have a good lease (preferably according to ROZ model), determine whether your space falls under Article 290 or 230a, consider VAT-taxed leasing if that is more advantageous, and take out the right insurance.
When drafting contracts, it is wise to use appropriate models and put all agreements in writing. Consider matters such as maintenance, subletting, notice periods and indexing. A good contract prevents discussions afterwards and protects both you as landlord and the tenant.
If you want to rent office space or elsewhere in the Netherlands, it is important to know the rules well. The complexity of office leasing can be overwhelming, especially if you are a first-time renter. At Co-Office, we take away this complexity by providing professional assistance in renting out flexible workspaces. We ensure correct contracts, clear agreements and compliance with all regulations. Do you have questions about leasing office space or want to know how we can help you? Then please contact with us for personalized advice.