Dutch Civil Code

Book 5 Real property rights

Title 5.7 Long leasehold

Article 5:85 Definition of ‘long leasehold’ and ‘ground rent’
- 1. A long leasehold is a limited property right which gives its proprietor, the ‘leaseholder’, the right to hold and use an immovable thing of someone else.
- 2. The notarial deed by which the long leasehold has been established, may impose an obligation on the leaseholder to pay a sum of money, the ‘ground rent’, at regular or irregular intervals to the owner of the immovable thing which is encumbered with the long leasehold.

Article 5:86 Duration of a long leasehold
Parties may regulate the duration of the long leasehold in the notarial deed by which the long leasehold has been established.

Article 5:87 Termination of a long leasehold
- 1. A long leasehold may be terminated by the leaseholder, unless the notarial deed by which the long leasehold has been established provides otherwise.
- 2. A long leasehold may be terminated by the owner of the encumbered immovable thing, if the leaseholder is in default with the payment of the ground rent of two successive years or if the leaseholder to a serious degree has failed to comply with other obligations. In order to be valid, such a termination must be served within eight days by writ on the persons who are registered in the public registers for registered property as limited proprietors or seizors of the long leasehold. At the end of the long leasehold the owner must compensate the actual value of this limited property right to the leaseholder, after subtraction of what he may claim from the leaseholder by virtue of the long leasehold, including costs.
- 3. Any arrangement derogating from the previous paragraph to the disadvantage of the leaseholder is null and void. However, the notarial deed by which the long leasehold has been established, may grant the owner of the encumbered immovable thing the right to terminate the long leasehold on other grounds, as long as the termination is not related to a failure of the leaseholder to comply with his obligations in derogation of what is stipulated to this end in the previous paragraph.

Article 5:88 Formalities for the cancellation of a long leasehold
- 1. Each termination of a long leasehold takes place by a writ that is served by a bailiff upon the opposite party. The writ must be served at least one year before the moment on which the termination shall become effective, yet in case of Article 5:87, paragraph 2, at least one month before that moment.
- 2. In a situation as referred to in Article 5:87, paragraph 2, the keeper of the public registers for registered property will refuse to register the termination if not also the writ is presented that has been served on the persons who are registered in the public registers for registered property as limited proprietors or seizors of the long leasehold.

Article 5:89 Enjoyment of the encumbered immovable thing
- 1. As far as the notarial deed by which the long leasehold has been established does not provide otherwise, the leaseholder is entitled to the same enjoyment of the immovable thing as an owner.
- 2. Without authorisation of the owner, he is, however, not entitled to change the function of the immovable thing, nor to perform an act that is contrary to that function.
- 3. As far as the notarial deed by which the long leasehold has been established does not provide otherwise, the leaseholder is entitled, during the existence of the long leasehold as well as at its end, to remove buildings, constructions and plants (vegetation) that have been placed voluntarily on the encumbered immovable thing by himself or his predecessor or that he or his predecessors have taken over from the owner of the immovable thing against payment, provided that he restores the encumbered immovable thing to its original conditions.

Article 5:90 Perception of fruits (benefits)
- 1. As far as the notarial deed by which the long leasehold has been established does not provide otherwise, the following fruits (benefits) shall belong to the leaseholder: fruits (benefits) that are separated from the encumbered thing or that have become due and demandable in the course of the duration of the long leasehold and fruits (benefits) of movable nature produced by the encumbered immovable thing.
- 2. Fruits (benefits) with an immovable character (nature) belong to the owner of the encumbered immovable thing. They are subject to the long leasehold as well, unless the notarial deed by which the long leasehold has been established provides otherwise.

Article 5:91 Transfer and apportionment of a long leasehold
- 1. The notarial deed by which the long leasehold has been established may stipulate that the long leasehold cannot be transferred or apportioned to a third party without approval of the owner of the encumbered immovable thing. Such a stipulation in the notarial deed does not prevent that creditors of the leaseholder recover their debt-claims from the long leasehold by means of a foreclosure (sale under execution) of this limited property right.
- 2. The notarial deed by which the long leasehold has been established may also stipulate that the leaseholder is not allowed, without approval of the owner of the encumbered immovable thing, to split up his long leasehold by transferring or apportioning this limited property right over only a part of the encumbered immovable thing.
- 3. A stipulation as meant in the previous paragraphs may also be made with respect to the possibility of the long leaseholder to split up his long leasehold on a building in several apartment rights. It may only be invoked against the person who has acquired such an apartment right, if it has been defined in the notarial deed by which the apartment right was split off form the long leasehold.
- 4. If the owner refuses to give the required approval, although he has no reasonable grounds to refuse it, or if he does not make a statement about it at all, the Subdistrict Court may replace that approval, upon request, by its authorisation; the person who requires the owner’s approval may lodge such a request with the Subdistrict Court in whose territory the encumbered immovable thing is located entirely or for the greater part.

Article 5:92 A long leasehold belonging to two or more leaseholders
- 1. When a long leasehold belongs to two or more persons, either as co-proprietors of one long leasehold or as individual leaseholders of several parts of the encumbered immovable thing after a split up of the original long leasehold, then each of them is joint and several liable for the entire ground rent that has become due and demandable during the time that they have a joint or individual right derived from the original leasehold, as far as this ground rent is not split up and spread over their rights.
- 2. After the transfer or apportionment of a long leasehold on an immovable thing or on a part of such a thing or of a share in the long leasehold itself, the acquiring party and his predecessor are joint and several liable for the ground rent that was indebted by the last processor(s) over the preceding five years.
- 3. The arrangements in the notarial deed by which the long leasehold has been established, may derogate from the previous paragraphs, yet not from the second paragraph insofar this would be to the disadvantage of the acquiring party.

Article 5:93 Sub-leasehold
1. As far as the notarial deed by which the long leasehold has been established does not provide otherwise, the immovable thing that is encumbered with the long leasehold may be encumbered, entirely or partially, by the leaseholder with a sub-leasehold. The sub-leaseholder can have no more powers or rights towards the owner of the encumbered immovable thing than the leaseholder.
- 2. A sub-leasehold ends when the long leasehold ends, unless the long leasehold ends as a result of a merger or an abandonment. In order to collect (recover) his debt-claim on the ground rent the owner of the encumbered immovable thing may foreclose (sell under execution) the leasehold free of any sub-leaseholds. The provisions of the previous sentence do not apply if the owner has declared by notarial deed, registered in the public registers for registered property, that he agrees with the establishment of the sub-leasehold
- 3. As far as it concerns the legal relationship between the leaseholder and sub-leaseholder, the leaseholder will be regarded as the owner of the encumbered immovable thing for the purpose of all other provisions of this Title.

Article 5:94 Right to lease out the encumbered immovable thing
- 1. The leaseholder is entitled to lease out the immovable thing that is encumbered with his leasehold to a lessee (tenant) or a farmer lessee, as far as the notarial deed by which the long leasehold has been established does not provide otherwise.
- 2. After the long leasehold has ended, the owner of the immovable thing has to observe any lease (tenancy or farm lease) on his property that was rightfully granted by the leaseholder in the course of his long leasehold. The owner may, however, refuse to observe such a lease as far as he has not given his permission to an agreed duration of the lease that is longer than the lease period according to local usage or, where retail buildings as meant in Section 7.4.6 of the Civil Code are leased out, that is longer than five years or, in case of a farm lease, that is longer than 12 years if it concerns farm buildings or longer than 6 years if it only concerns farmland, or when the lease out is done under exceptional conditions that are burdensome to him.
- 3. The owner of the immovable thing loses his right to refuse to observe the lease when the lessee (tenant) or farm lessee has set a reasonable time period within which the owner has to give his opinion on the observance of the lease and the owner fails to make a statement about it within that period.
- 4. If according to the previous paragraphs the owner of the immovable thing is not obliged to observe a lease that is rightfully granted by the leaseholder, he nevertheless has to continue the lease with the lessee (tenant) as far as it concerns a house (dwelling) which, at the end of the long leasehold, forms the main residence of the lessee (tenant) and to which Article 7:271 up to and including 7:277 of the Civil Code apply, on the understanding that in such a situation Article 7:269, paragraph 2, of the Civil Code will be applicable to the lease between the owner and the lessee (tenant).

Article 5:95 Legal actions
The leaseholder and the owner of the encumbered immovable thing are both independently entitled to file lawsuits or to lodge applications in order to get a judgment or court order which concerns both, the right of the leaseholder and that of the owner, provided that he ensures that the other is called to the legal proceedings in time.

Article 5:96 Ordinary legal charges and repairs
- 1. Ordinary charges and repair services with regard to the encumbered immovable thing are for account of the leaseholder and have to be carried out by him. When it is necessary to perform extraordinary repair services, the leaseholder must notify the owner of the encumbered immovable thing of this necessity and give him the opportunity to perform these repair services. The owner, however, is not compelled towards the leaseholder to perform any repair services to the immovable thing subject to the leasehold.
- 2. The leaseholder must compensate the owner for the extraordinary legal charges paid by the owner with regard to the encumbered immovable thing.
- 3. The notarial deed by which the long leasehold has been established, may derogate from the previous paragraphs.

Article 5:97 Change or termination of the long leasehold
- 1. If at least twenty-five years have expired since the long leasehold first came to existence, the court may, upon the request of the owner of the immovable thing or of the leaseholder, change or lift (terminate) the long leasehold on the basis of unforeseen circumstances which are of such a nature that to standards of reasonableness and fairness an unchanged continuation of the notarial deed by which the long leasehold has been established cannot be expected from the owner or leaseholder.
- 2. The court may award a legal claim as meant in the previous paragraph under additional conditions to be set by it.
- 3. When the long leasehold or the immovable thing is encumbered with another limited property right, granted rightfully by the leaseholder, then the legal claim meant in paragraph 1 can only be awarded if the involved limited proprietor has been called to the legal proceedings and the standards of paragraph 1 have been met towards him as well.

Article 5:98 Continuation of the long leasehold
- 1. When the long leasehold was established for a fixed period of time and the leaseholder has not vacated the immovable thing at the end of it, then the long leasehold continues to exist, unless no later than six months after its expiry date the owner of the immovable thing makes clear that he considers the long leasehold to have been ended. The owner and the leaseholder may terminate the extended long leasehold in the way referred to in Article 5:88, taking into account the termination period (period of notice) mentioned in that Article .
- 2. Every condition that derogates to the disadvantage of the leaseholder from the present Article, is null and void.

Article 5:99 Compensation after the long leasehold has ended
- 1. When the long leasehold has ended, the former leaseholder is towards the owner of the immovable thing entitled to a compensation of the value of buildings, constructions and plants (vegetation) that have been placed rightfully on the encumbered immovable thing by himself or his predecessor or that have been taken over by him or his predecessors from the owner of the immovable thing non-gratuitously.
- 2. The notarial deed by which the long leasehold was established may provide that the leaseholder is not entitled to a compensation as meant in paragraph 1:
a. if the land that was encumbered with the long leasehold had another utilization function than housing construction;
b. if the leaseholder has not borne the costs of the buildings, constructions or plants (vegetation) himself;
c. if the long leasehold has ended because it was terminated by the leaseholder;
d. as far as the buildings, constructions and plants (vegetation) were placed voluntary on the immovable thing and the leaseholder had the right to remove them at the end of the long leasehold.
- 3. The owner may subtract from the compensation meant in the present Article what the leaseholder still owes to him on account of the long leasehold.

Article 5:100 Right of retention
- 1. The leaseholder has a right of retention over the encumbered immovable thing until the chargeable compensation meant in the previous Article has been paid to him.
- 2. Every condition derogating from the previous paragraph is null and void.
- 3. The owner has a right of retention over all that the leaseholder has rightfully broken away from the encumbered immovable thing with the intention to remove it, until all debts, chargeable to him on account of the long leasehold, have been settled.