Up Again Netherlands: Premises and Workplace

Employment

1. What are the key things that employers have to consider in relation to social distancing in the workplace, e.g. open plan or spacing of desks, use of shared equipment, limited access to communal facilities, canteen / restaurant, etc.?

Employers are obliged to ensure their employees’ health and safety at work and are obliged to provide for a safe workplace. Businesses should take adequate measures to comply with all requirements and guidance. The key things employers must consider about social distancing in the workplace are the following:

  • Avoid contact where possible and do not shake hands.
  • Limit meetings in time, frequency and numbers.
  • Work in different rooms.
  • Spread opening hours, working times and break times.
  • The elevator may be used by a maximum of two people at the same time.
  • Schedule meetings online, by videoconferencing or by phone, to avoid meetings in person.

2. What key hygiene and/or infection prevention measures will employers have to take to ensure a safe workplace e.g. provision of adequate handwashing facilities, regular deep cleaning of offices, etc.?

Employers are obliged to ensure their employees’ health and safety at work The types of measures that employers should consider are the following:

  • Ensure proper procedures for handwashing/hand sanitisation, including no-touch dispensers and disposable towels.
  • Implement deep cleaning and sanitising procedures.
  • Identify how the company restaurant and other shared facilities can operate safely.
  • Make sure everyone washes their hands regularly for 20 seconds with soap and water and dries them with a paper towel.
  • Make sure everyone coughs and sneezes in the inside of the elbow.
  • All employees should keep a distance of 1.5 m from each other.
  • Employees who do not feel well should be sent home or remain at home.
  • Do not shake hands.
  • Provide resources for good hand hygiene, such as hand sanitiser.
  • Draw attention to the washing instructions issued by the National Institute for Public Health and the Environment by hanging reminder notices at the entrance, lunch areas and toilets.
  • Clean contact surfaces (such as doorknobs and lift buttons) several times a day.

Real Estate

3. Are there any specific obligations, liabilities or duties of conduct imposed on landlords, tenants or visitors with respect to the use or re-use and decontamination of premises; care, cleaning and maintenance of the exclusive and common areas; reporting requirements and/or measures in case of identified infections; health and safety issues - e.g. recommissioning water systems to avoid virus, installation of plexiglass screens, moving desks to comply with distancing. remodulation of fire prevention strategies (entrance/exit routes)? Is any distinction made between asset classes?

Landlords, tenants and visitors all must comply with the Dutch COVID-19 measures (distance of 1.5 meter, hygiene, working from home as much as possible) established by the National Institute for Public Health and the Environment and imposed by the Dutch government. If parties do not comply with the COVID-19 measures, the Dutch authorities can impose fines.

Over recent weeks, the Dutch government has published protocols (more will be published) providing guidelines and practicalities for various business sectors (retail, construction, healthcare, sports, education) to comply with the COVID-19 measures.

Because the guidelines and practicalities in the protocols elaborate on the COVID-19 measures, landlords, tenants and visitors also must comply with the protocols applicable to their businesses.

Fines can also be imposed for non-compliance with the protocols. Please see question 10 below for more details on the relevant protocols for the real estate sector.

4. Are there any rent suspension measures and/or stay of recourses and actions (including eviction) or any Government support initiatives such as a furloughed building grant scheme (if so, maybe only a part of the building should be re-occupied)? When rent suspension measures are available, what is the usual payment mechanism and timing agreed to by the parties?

In the Netherlands, case law with regard to rent payment obligations of lessees during the COVID-19 crisis is not yet consistent.

However, recent cases indicate that the COVID-19 crisis can be considered as unforeseen circumstances that neither the landlord nor the tenant could have expected at the time of entering into the lease agreement (where the lease agreement was entered into before the COVID-19 crisis).

Depending on the circumstances of the specific matter and the impact of COVID-19 on the business and financial position of the tenant, this can justify temporary amendment of the obligations of the landlord and tenant under the lease agreement, such as a partial rent reduction or partial rent suspension. To be entitled to rent reduction or rent suspension, the tenant must substantiate that it would not be reasonable to have the lease agreement continue unamended, for example where the tenant is heavily affected financially by the COVID-19 crisis.

Case law indicates that tenants that are financially sound or have not been financially negatively affected by the COVID-19 crisis or cannot sufficiently demonstrate this jn court, will not be entitled to rent reduction, though the COVID-19 crisis can be considered as unforeseen circumstances.

In principle, in the event that a tenant is entitled to rent reduction, the guideline could be applied that the setback of not being able, or only being able to a limited extent, to exploit the leased premises during the COVID-19 crisis will be divided equally between the landlord and the tenant, taking into account all the circumstances of the case, such as the social position of the parties and the nature and seriousness of the interests of both parties involved.

The foregoing seems to indicate that under some circumstances a tenant may be entitled to up to 50% rent reduction over the period that operation of its business was not or hardly possible due to the COVID-19 crisis, but this is not consistent case law yet.

As support initiative, the Dutch government has issued (entry into force on 25 April 2020) an emergency law extending temporary residential lease agreements. The guideline from the Dutch courts to not order evictions for housing was withdrawn from 1 June 2020. Depending on the development of the COVID-19 crisis in the coming months, the Dutch government may announce more emergency laws or protocols regarding the crisis.

5. Are there specific tax reliefs on payment or collection of rent instalments? Do they apply subject to actual payment or regardless? Do they apply generally or only to specific asset classes?

No – to our knowledge, there are no specific tax reliefs on payment or collection of rent instalments.

6. Are there any measures regarding relief from the performance of real estate-related contractual obligations?

See the answer to question 5 above. We expect that the legal concept of unforeseen circumstances will be applicable to other agreements as well (e.g. construction agreements or project development agreements), in situations where COVID-19 made it impossible for the contractor or property developer to meet its contractual obligation to construct, complete or deliver the relevant property in time.In addition, we are seeing parties discussing temporary arrangements to overcome the situation in the long-term, in deviation from the existing contractual obligations.

This is particularly the case for lease agreements in retail and hospitality and leisure. It is less common for office leases and warehouses/logistics (unless the tenant works in a sector clearly affected by COVID-19). In affected sectors, postponement of payment, temporary reduction of the rental price, and limited opening hours are often agreed on or simply tolerated for the next month or the next quarter, albeit often subject to reservation of rights on both sides.

7. Are there any credit facilities in place to mitigate loss of income for landlords?

Yes, any business with a decrease in turnover of more than 25% due to COVID-19 is in principle entitled to state aid for up to 90% of the employee salaries. It is, however, questionable whether a landlord can demonstrate such a loss of turnover.

As security for payment of the rent under a lease agreement, in the Netherlands the tenant often (in particular in the event of an ROZ lease agreement) issues a bank guarantee for the amount of one to three months, or pays a deposit equal to this amount.

If a bank guarantee or deposit has been issued by a tenant, a landlord has the possibility of claiming under this bank guarantee or deposit if the tenant does not pay the rent (in time).

8. Is there any relief from loan repayments / enforcement of loans secured against properties?

Yes, all major Dutch banks have announced that financially healthy commercial borrowers will be eligible for a redemption free (mortgage) loan period of six months (the postponed redemption terms must be paid later). During this period, only interest payments will become due and payable. This is the case for loans up to EUR2.5 million. ABN AMRO have provided such relief for loans up to EUR50 million.

9. Are public services necessary to complete the sale, acquisition or other operation of real estate assets or companies or to establish the right to open for business (planning authorities, notary public, Land Registry, Companies’ Registry, etc.)?

Under Dutch law, public services, such as civil-law notaries and the land registry, are necessary to complete the sale, acquisition and operation of real estate assets. Such public services were and are not closed in the Netherlands during the COVID-19 crisis. As such, all real estate transactions can be done and executed during the COVID-19 crisis.

10. Are there any specific processes or protocols available to consummate real estate operations enabling them to comply with any required social distancing (e.g. electronic signature, etc.)?

For the real estate sector, several protocols have been published to ensure landlords, tenants and visitors in the retail, hospitality and leisure, offices and warehouses and logistics sectors comply with the COVID-19 measures (see question 3 above for more information on these).

The protocols contain various recommendations about to social distancing (1.5 m distance, traffic routes in buildings, screens), hygiene (cleaning, hydroalcoholic gels, disinfectant wipes, faces masks). Please find relevant protocols for the real estate sector below:

  • Protocol Veilig samen doorwerken. This protocol offers clarity to companies, residents, clients and all other workers on safe working practices in the construction, engineering and installation sector during the COVID-19 crisis.
  • Protocol Veilig naar kantoor. The government is currently working on this protocol. This protocol will come into force when the Dutch government decides that working from home can be phased out gradually.
  • Protocol Verantwoord Winkelen. This protocol contains guidelines for retailers and their customers and business organisations to ensure people can shop as responsibly as possible and store employees can work safely.
  • Protocol Heropening Horeca. This protocol contains the guidelines for cafes, restaurant and hotel owners to reopen their businesses from 1 June 2020. The protocol was published on 20 May 2020.
  • Protocol Coronaprotocol Transport en Logistiek. The protocol provides clarity to employers, principals, self-employed people and employees (including temporary workers and on-call workers) about how to continue working safely and healthily in road transport and logistics during the COVID-19 crisis and the 1.5 m economy.
11. Are contractors who were carrying out works within the premises obliged to resume them? Can building sites reopen when they were closed down? Are there any specific provisions in relation to certain asset classes authorising continuation / resumption of works (e.g. healthcare structures)?

In the Netherlands contractors were not obliged to cease their works during the COVID-19 crisis, provided that the works in the premises were executed in accordance with the COVID-19 measures (e.g. social distancing and hygiene measures).

During the COVID-19 measures, the contractors were legally (under their contracts) obliged to continue their works, unless parties agreed on different arrangements during the COVID-19 crisis.

12. Are there remedies or contractual arrangements available to address impossibility or delay for a party to handover premises to another which are/were to be constructed or refurbished, or for such other party to take over those premises?

Where there is a possibility that handover will be delayed or not possible, the parties should review the relevant contractual provisions.

Often in Dutch (ROZ) lease agreements, sale and purchase agreements and contractor agreements, delay clauses, penalties clauses and a long-stop date (dissolution of the agreement) are included in relation to late delivery or no delivery.

As indicated above, we expect that contractors and project developers may be entitled to extension of time schedules or even partial compensation for delay costs or additional costs, where it is clearly impossible to meet the agreed timelines due to difficulties caused by COVID-19. It is, therefore, difficult to predict with certainty how the courts will judge these claims and matters, and it will often depend on the circumstances.

13. Has the duration of validity of administrative authorisations pertaining to development/construction of real estate assets (in particular planning authorisations) been extended?

No, the duration of validity of such administrative authorisations has not been extended in the Netherlands.

The normal periods regarding administrative authorisations are applicable despite the COVID-19 crisis. In practice, however, the administrative authorisation procedures (e.g. applications for permits or decisions on applications) can in some circumstances take longer due to the practical changes in society (e.g. working from home).

Litigation and Regulation

14. Is the use of disclaimers for visitors or others coming on to the site of business useful for limiting potential future COVID-19 claims?

In general, a disclaimer that is appropriately brought to the visitor’s attention qualifies as a contractual limitation of liability between the business and the visitor. Such a limitation of liability in itself is valid under Dutch law and can include indemnifications for damage caused to any third party. However, there are certain circumstances where a contractual limitation of liability does not offer protection.

First, use of a disclaimer may violate the principles of reasonableness and fairness. This will generally be the case if the damage caused to the visitor is due to the fault or intentional or deliberate recklessness of the other party. Various factors need to be taken into account in the assessment, including the severity of the fault, the social positions and mutual relations of the parties, the manner in which the disclaimer was drafted, and the extent to which the other party was aware of its implications.

Secondly, if the disclaimer is used in a business-to-consumer situation, it may not be invoked if doing so would be “unreasonably onerous” towards the consumer. This must be assessed on the basis of all the particular facts and circumstances of the case, including:

  • the foreseeability and probability of damage occurring;
  • the measures taken by the business to prevent damage;
  • whether the business could (more easily than the customer) get insurance against the damage; and
  • the wording of the disclaimer, the way it was communicated to the customer and whether the customer understood all implications of accepting it.

Thirdly, a disclaimer generally cannot be relied on by an employer against an employee. Dutch law provides that the employer is responsible for damages sustained by the employee during the performance of their tasks (except when the damage is intentional or due to serious recklessness). A purported limitation of the employer’s liability by a contractual limitation clause or a disclaimer is not enforceable.