Acquisition of a supermarket location by terminating the lease at the expense of the sitting tenant is allowed by the Supreme Court
On 25 April 2014, the Supreme Court confirmed for the second time that the waiting period of three years for termination of the lease for retail space due to urgent personal use after the purchase of the property only applies in the first lease term. This confirms the earlier judgment of the Supreme Court of 2010, which judgment set many pens in the literature in motion.
This case concerned the termination of a lease agreement for business premises in which Aldi had established one of its supermarkets. The successive tenant had bought real estate shortly before and wanted to operate a supermarket there instead of Aldi.
Before the new tenancy law entered into force in 2003, a waiting period of three years applied, regardless of the duration of the lease. The Supreme Court now thus determines that this waiting period now only applies in the first rental period, which was generally five years, but in this case ten years. In the new tenancy law, this waiting period no longer applies afterwards and it is therefore possible to terminate the lease as of the first possible date immediately after purchasing the property and to use the leased property yourself for the same activity, in this case the exploitation. of a supermarket, but that can of course concern any shop.
In the supermarket sector in particular, there is a scarcity of good locations and the goodwill of a company is often largely determined by the possibility of operating a supermarket at a certain profitable location. It is obvious that organizations will try to acquire good locations in this way, at the expense of the sitting tenant.
Particularly in those situations in which supermarket entrepreneurs make substantial investments in converting formulas, which is currently in full swing, one must therefore be particularly vigilant that the (main) rental rights cannot draw a line through that account during the depreciation period.
Because upon the transfer from C1000 to Jumbo and/or Albert Heijn and/or Coop, the tenancy rights were often transferred by legal demerger and merger under universal title, those tenancy rights have therefore not been renewed. As a result of the confirmation given by the Supreme Court, there is therefore a risk in the main lease, but also in the sublease, that privateers will still come to the coast along the way of purchasing real estate and terminating the lease. Because franchisees in the supermarket sector are often subtenants, they should be vigilant and inquire about the term of the main lease. The main tenant is obliged to report that duration.
The advice to supermarket entrepreneurs who are currently confronted with a conversion is therefore to make sure of the duration of the main lease relationship and, if necessary, to ensure that it is extended before investing.
For those interested, I mention here the location of the judgment of the Supreme Court, which can be consulted on the website Rechtspraak.nl: ECLI:NL.HR:2014:1018.
For further information, please contact Jeroen Sterk of Ludwig & Van Dam Advocaten.
Mr. J. Strong – Franchise attorney
Ludwig & Van Dam Franchise attorneys, franchise legal advice.
Do you want to respond? Mail to strong@ludwigvandam.nl
Other messages
When does a franchisor go too far when recruiting franchisees?
The judgment of the Court of Appeal of Arnhem-Leeuwarden on 5 February 2019 dealt with whether the franchisor had acted impermissibly when recruiting the franchisees.
Advisory Board on Regulatory Pressure (ATR) advises State Secretary Keijzer about the Franchise Act
In short, it is first advised to actively inform franchisors and franchisees about this amendment to the law.
Post non-competition ban on services and sales franchise
When a franchise agreement ends, many franchisees encounter a prohibition in the franchise agreement to perform similar work for a period of time thereafter
The concept of the Franchise Act: impact for franchisors and franchisees – dated February 5, 2019 – mr. AW Dolphin
Ludwig & Van Dam Advocaten believes that if the draft of the Franchise Act actually becomes law, a lot will change for franchisors and franchisees.
Buy franchise business and the laid off sick employee from 7 years ago
The question is whether a Bruna franchisee, when selling the franchise company to Bruna, should have stated that seven years ago an employee had left employment sick.
Court prohibits Domino’s unilateral area reduction when extending franchise agreements – dated January 28, 2019 – mr. RCWL Albers
On January 9, 2019, the District Court of Rotterdam rendered a judgment in a lawsuit initiated by the Association of Domino's Pizza Franchisees and all its members (almost all Domino's franchisees).