In many rental agreements, the rent is indexed annually on the basis of the CBS price index. In recent years there was hardly any inflation, so rents hardly rose either. With a current inflation rate of almost 10%, this immediately leads to huge rent increases. On top of that there are rising wage costs, rising energy prices and increased purchasing costs because raw materials have also become considerably more expensive. If that inflation continues, one may wonder at any time whether the rent is still reasonable and in line with the market.

The legislature has made provision for this. Rents for retail space can in principle also be adjusted independently of this indexation at the end of each contract period, at least once every five years, to the rent of comparable industrial space, ie the so-called rental reference value. This is determined by experts on the basis of the rents of comparable industrial space in the vicinity. This must concern rents actually paid over the past five years, indexed to the current level.

It may be worthwhile to carry out such an investigation if there is a suspicion that this may lead to a lower rent. Because the changed rent can only take effect after agreement has been reached, or the subdistrict court has appointed an expert or a summons has been served, it is important for the tenant to adopt an active attitude.

Consideration could also be given to including provisions in lease agreements that limit annual indexation, which large forward-looking franchisors already do in their lease agreements. Franchisees who sublease from their franchisors could perhaps benefit from this, arguing that it is not reasonable to increase the rent in the sublease relationship even if that restriction does not formally apply in their sublease agreement.

Finally, trade associations of the SME sector advocate the application of core inflation, so that at least certain costs whose prices fluctuate strongly, such as rising energy prices, do not count for rent indexation. Of course, agreement must be reached with the landlord on this. The argument for this is in particular that the entrepreneur himself already pays the higher energy price and therefore pays twice due to the rent increase, in which it weighs heavily.

Apart from this, there is a trend to increasingly agree (partly) turnover-dependent rent.

Perhaps there are also possibilities in your situation to keep the rent under control? We are happy to check it for you.

mr. R.C.W.L. Albers
Ludwig & Van Dam lawyers, franchise legal advice.
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