I cannot pay my rent, now what?

You can no longer pay the rent for your business premises. You start running up rental arrears. Now what? There are 3 ways to come to a possible solution. You can try to make arrangements with the landlord, terminate the lease by mutual consent, or file a lawsuit.

Just not paying your rent is not the way to solve financial problems. If you pay too little or no rent for three or more months, the landlord may ask the subdistrict court to annul the lease. KVK adviser and lawyer Sergej Schuurman is clear: “When you sign a lease, you are bound by the commitments you make in it. That is the law.”  

That is why you should immediately let the landlord know in writing if you have problems paying. Also indicate that you want to work with them to find a solution. This could work in your favour if it eventually comes to a court case. Also, the landlord is likely to be more understanding if they know why you cannot pay the rent. 

1. Make arrangements 

Do you want to continue with your business despite rent arrears? Then it is best to work out a solution with your landlord. Perhaps you can pay the rent or part of it at another time. Or you could discuss options for a lower rent and a longer rental period.  

Schuurman: “For the landlord, the annoying thing is generally not having you as a tenant. The premises will fall vacant and they will have to look for a new tenant. In many cases, the property owner will be willing to come to a temporary solution.” 

2. Termination of the lease by mutual consent 

Do you not see enough opportunities for your business, or want to move to a cheaper location? Then you can end the contract. Ask the landlord to terminate the contract early by mutual consent. If the landlord agrees, you can do this without involving the courts.  

Do draw up a termination agreement, which both of you will sign. In most cases, though, you have to pay the rent arrears first. And if that is not an option, find help. 

3. Go to court 

Of course, the landlord does not have to cooperate in coming to a solution. If you are unable to work things out out together, you can go to the subdistrict court. You can claim a temporary or even a permanent rent reduction.  

The judge may decide that you are entitled to a temporary rent reduction. A number of entrepreneurs were granted this during the corona crisis, for example. A judge may also rule that you are not entitled to rent reduction and may decide to dissolve the lease.  

Before you go to court, get proper advice on whether your reasons are likely to help you win the lawsuit. Check what insurance coverage you have for your company’s legal expenses to see whether you are entitled to legal support. Some trade associations also offer legal support to their members.