NETHERLANDS Law and Practice Contributed by: Coco van Zuiden, Marijn Bodelier, Sabine Schoute and Simone Wijngaard, Greenberg Traurig, LLP
on costs with respect to the real estate. Under certain conditions, it is possible to integrate the option in the lease. An important condition is that the lease clearly states that the lease will be subject to VAT and contains a declaration in which the lessee declares that the real estate will be used for purposes giving the lessee a right to at least 90% (or 70%) recovery of input VAT. Generally, the letting of real estate is a relatively passive activity. If, in addition to the more pas - sive letting, other services are offered, the letting may qualify as “letting plus” . It is important to determine whether the additional services are embodied in the letting performance or should be regarded as multiple separate services, for which the VAT treatment may differ. In certain cases, the lessor also charges the les - see service charges when letting real estate. In principle, service charges paid by tenants are considered to be embodied in the letting per - formance and are treated the same way for VAT purposes. However, if the tenant is free to choose its own supplier and/or determine its own consumption, service charges are taken separately from the rent and are taxed with VAT. Whether the service charges will be part of a lease or constitute an independent (VAT-taxed) service should be assessed on a case-by-case basis. 6.8 Costs Payable by a Tenant at the Start of a Lease The payment obligation of a lessee usually con - sists of rent and service charges plus VAT (com - pensation). 6.9 Payment of Maintenance and Repair The general statutory provisions impose only a few maintenance and repair obligations on les - sees. In short, the lessee must carry out all minor
and day-to-day maintenance, including but not limited to the maintenance of technical installa - tions, the replacement of bulbs, locks, taps and glass, and painting the interior of the premises. Other maintenance and repairs are for the lessor. 6.10 Payment of Utilities and Telecommunications Utilities and telecommunications that serve a property occupied by several tenants can in principle be shared (pro rata) via the service charges. 6.11 Payment of Property Taxes In the Netherlands, the responsibility for real estate taxes relating to rental properties is typically split between landlords and tenants, whereby property tax relating to the use is in The common practice in the Netherlands is that insurance of the property is taken out by the les - sor. The lessor is not obliged to insure furniture and other objects belonging to the lessee that are in the leased premises, however, nor is the lessor obliged to take out business interruption insurance. Leases for business premises often provide that if a higher than normal premium for fire insur - ance is charged as a result of the lessee’s activi - ties, the lessee must reimburse the lessor for the amount in excess of the normal premium. 6.13 Restrictions on the Use of Real Estate principle for the tenant. 6.12 Insurance Issues Restrictions can be imposed by a lessor on how a lessee uses the real estate. It is market stand - ard, in any case, to agree upon the designated use of the real estate.
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