The Netherlands: Real Estate

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This country-specific Q&A provides an overview to real estate laws and regulations that may occur in The Netherlands.

It will cover the most pertinent issues including ownership structures, restrictions, transfers, taxes and environmental contamination.

This Q&A is part of the global guide to Real Estate. For a full list of jurisdictional Q&As visit

  1. Overview

    This response covers questions regarding commercial real estate in the Netherlands under Dutch law. Dutch law has certain particularities compared with other legal systems, such as Common Law systems. Under Dutch law, for instance, agreements need not be recorded in writing; oral agreements are also binding, with a few exceptions regarding consumer sales. Also, the literal text of the contract is not decisive and restrictions apply to the unilateral termination of negotiations.

    Sources of obligations
    The law of obligations is regulated in the Dutch Civil Code. Dutch law differs from Common law in that respect. In the latter system the law of obligations is not a separate field of law. The law encoded in the Dutch Civil Code is further interpreted in case law.

    Under Dutch law a contract is concluded on the acceptance of an offer. In principle, the agreement need not be recorded in writing. Apart from a few exceptions regarding consumer sales, oral agreements are also binding. An agreement has not only the legal consequences agreed on between the parties, but also those which, in light of the nature of the agreement, follow from the law, custom or the rules of reasonableness and fairness. It is important to realise that a contract may already have been concluded the moment parties reach agreement on the essentials of the contract, without agreeing on all points yet.

    Pre-contractual phase
    The doctrine of the pre‐contractual phase means that, although it is permitted in principle to terminate negotiations, a party may be obligated to reimburse all or some of the costs incurred by the other party. It is even possible that the negotiations have reached such an advanced stage that they may no longer be terminated because the other party could rely on it that the contract would be signed. Depending on the circumstances, there may even be grounds for reimbursement of the lost profit.

    Explanation of obligations
    Unlike Common Law, continental legal systems such as the Dutch base the interpretation of a written agreement on the parties’ intentions. In Common Law, if the wording is unambiguous, it is not permitted to depart from its “objective” meaning by interpreting the contract.

    In Dutch law the Haviltex rule is applied, whereby significant weight is attributed in interpreting an agreement to the linguistic meaning of its wording, but the parties’ intentions and what they could reasonably expect of each other are decisive.

    Choice of law
    Contracting parties may stipulate in the agreement by what law it will be governed. It is not possible thereby to exclude provisions of Dutch law that are considered of public order, such as certain aspects of landlord and tenant law.

    A bank guarantee is a separate agreement that does not form part of the agreement on the basis of which the bank guarantee is issued. If the parties do not wish the bank guarantee to be governed by the law of the country in which the bank is domiciled, it is advisable to include a choice of law clause. In that case it is also advisable to choose an address for service.

  2. How is ownership of real estate proved?

    Categories of real estate rights
    Dutch law has two categories of real estate rights: real rights and personal rights. A real right is linked to the real estate and is independent of the person that holds it. Such a right can be registered in the public registers and can be transferred. The personal right is linked to a person and, unlike a real right, cannot be transferred, unless the party with which he entered into that legal relationship cooperates in transfer of the legal relationship.

    Land Register
    Real estate located in the Netherlands and geographic information are registered in the Land Register, a register open to public access. This may also apply to ships, aircrafts and underground or other networks, but they will not be addressed in this legal guide.

    Facts that are relevant to the legal status of real estate can be registered in the Land Register. Registration in the Land Register is even a constitutive requirement in order to transfer real estate or to create restricted rights, such as a mortgage. Other facts however are not or cannot be registered in the Land Register, such as a tenancy right.

    The purpose of registration in the Land Register is to increase legal certainty. The moment a real estate acquisition is registered in the Land Register, earlier facts eligible for registration cannot be held against the owner if those facts were not registered. This does not apply if the acquirer was or ought to have been aware of the fact.

    Facts eligible for registration
    Without wishing to provide an exhaustive list of facts eligible for registration in the Land Register, the following are a number of such facts, of which some, moreover, cannot take place without being registered in the Land Register:

    • a transfer of title to real estate or a right of leasehold or right of superficies;
    • a mortgage right;
    • an attachment;
    • a right of transfer or a pre‐emptive right;
    • the creation of a servitude; and
    • a usufruct.

    Apart from a few exceptions, such as the pre‐emptive right of public authorities and attachment, the civil‐law notary is responsible for the correct registration of these facts in the Land Register.

    As stated above, a right of transfer can be registered (which is known as Vormerkung). The registration must in any event state the essentials of the contract of sale, such as the parties’ names, the property, the price and any conditions precedent or conditions subsequent. In commercial transactions the advantages of registration, i.e. protection of the buyer for a period of six months against (among other things) subsequent attachments or transfer to third parties, do not always outweigh the loss of the confidentiality that is often desired until all the conditions stipulated in the contract of sale have been met.

  3. Are there any restrictions on who can own real estate?

    Natural persons as well as legal entities can be entitled to real estate with the exception of associations not incorporated by notarial deed. Associations incorporated by notarial deed and foundations can acquire real estate, provided that this is included in the articles of association.

  4. What types of proprietary interests in real estate can be created?

    Dutch law has two categories of real estate rights: real rights and personal rights.

    The most comprehensive real estate right is freehold. In that case the ownership of the real estate is not encumbered with any other real right. The owner has the exclusive right of use and the freedom to encumber the real estate at his discretion.

    The entitlement may also be based on a real right other than freehold, such as a right of leasehold, a right of superficies or an apartment right. Unlike personal rights, such as lease, these rights are binding on third parties in the same manner as freehold.

    A right of leasehold entitles the leaseholder to hold and to use another party’s real estate. It is customary to obligate the leaseholder to pay the landlord a periodical fee (the ground rent). A right of leasehold may be temporary, permanent or perpetual. A temporary right expires after a fixed period, agreed on beforehand (unless the parties agree on an extension).

    A permanent right of leasehold is open‐ended, but is divided into periods. At the end of a period the right of leasehold continues, but the leasehold conditions may be amended.

    A perpetual right of leasehold is open‐ended, without any time periods. A right of leasehold gives the parties a certain degree of freedom. The parties themselves can agree on the details of the right (duration, designated use, development or compensation when the right of leasehold ends). The right of leasehold can be mortgaged and, unless the landowner has stipulated otherwise, the leaseholder can transfer it without the landowner’s consent and/or can grant a sub‐leasehold.

    Right of superficies
    A right of superficies is similar to a right of leasehold in many respects. It offers the same freedom. An important difference is that a right of superficies gives the holder the right to own or to acquire structures, works and plants in, on or above the real estate, whereas a right of leasehold gives the holder the right to hold and to use the real estate.

    In light of the difference referred to above, a right of superficies is often preferred to a right of leasehold, for instance when valuable machinery is located in another party’s real estate. Creating a right of superficies may also be useful if the owner of a building wishes to exclude the risk of soil pollution.

    A right of superficies may be independent or dependent, for instance on another real right or a tenancy right. It is important to realise that a dependent right of superficies cannot be transferred and cannot be mortgaged, whereas an independent right can be transferred and mortgaged.

    Apartment right
    An apartment right is a real right that confers on the party entitled an exclusive right of use of part of the real estate and a (undivided) share in the communal parts of that real estate. When an apartment right is acquired, the owner becomes a member by operation of law of the homeowners association of the building in question, whose objects are to promote the joint interests of the owners. The rights and obligations arising from that membership are set out in property division regulations that are recorded in a notarial deed of division. The division plan, depicting the private and the communal parts of the building, forms an integral part of the deed of division. An apartment right may be granted in leasehold or, subject to certain conditions, may be encumbered with a right of superficies. An apartment right may also be mortgaged.

    Personal rights
    Unlike the rights referred to above, a lease gives the tenant a personal right to use certain real estate. The lease is binding only between the landlord and the tenant. An exception to that rule is that the lease is transferred by operation of law when the landlord sells the real estate. The new owner becomes the landlord by operation of law.

    All the real rights referred to above can be leased to a third party and therefore do not differ from a situation in which the landlord has the freehold.

  5. Is ownership of real estate and the buildings on it separate?

    In principle the ownership of buildings on real estate automatically follow the ownership of the real estate. The exception is a rights of superficies that gives the holder the right to own or to acquire structures, works and plants in, on or above the real estate.

  6. What are common ownership structures for ownership of commercial real estate?

    In the Netherlands it is more common for legal entities to be used to acquire commercial real estate than natural persons. The most common used legal entity for the acquisition of commercial real estate is a Dutch private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid), as special purpose vehicle, or in the capacity as custodian of a fund or general partner of a limited partnership. The choice may depend on various (tax) factors, but does not influence the amount of real estate transfer tax or municipal taxes due.

    The Netherlands levies corporate income tax (vennootschapsbelasting) on companies resident in the Netherlands based on their worldwide income. Non-resident companies are taxed on their Dutch-sourced income, such as income and capital gains derived from real estate located in the Netherlands, for example rental income. The applicable corporate income tax rate is 20% over the first EUR 200,000 (EUR 250,000 per 2018) Dutch-sourced taxable income and 25% on any surplus. The Dutch-sourced taxable income may be lowered by costs incurred related to the Dutch real estate, such as interest on loans. Tax treaties concluded by the Netherlands generally allocate the right to tax income from Dutch real estate exclusively to the Netherlands.

    Rental income received by a Dutch entity such as a private company with limited liability extracted via dividend distributions is in principle subject to Dutch dividend withholding tax.

  7. What is the usual legal due diligence process that is undertaken when acquiring commercial real estate?

    Please provide a summary of the legal due diligence process that is undertaken when acquiring commercial real estate in your jurisdiction, including covering the following:

    • what types of searches (if any) are undertaken and what do they reveal, are there material costs associated with these searches and how long do they typically take to obtain?

    The buyer’s advisors perform a due diligence investigation and a survey of the state of repair of the real estate. The legal due diligence is usually carried out by a legal due diligence team consisting of lawyers and (candidate) civil-law notaries.

    The legal due diligence usually covers the following four aspects:

    • Title, which part of the due diligence is usually carried out by candidate civil law notaries. Customary searches for this part of the due diligence are the land registry searches, including cadastral excerpts, mortgage register excerpts, name searches and review of the acquisition deed, cadastral map and title deeds or deeds regarding encumbrances on the real estate apparent form the cadastral and mortgage register excerpts;
    • Lease, also including side letters and riders and the review of (the transferability of) bank guarantees;
    • Zoning, in particular whether the use of the real estate complies with the requirements of the applicable zoning plan, that is publicly available at; and
    • Permits, in particular environmental permits.

    Real estate transfer tax and VAT with regard to transfer of the real estate and/or lease is also often covered, which part of the due diligence is then performed by tax lawyers.

    The form of the report is usually discussed with the buyer. The customary form for a due diligence report is a brief summary of key issues, indicating the risk and including recommendations for the buyer. Executive summaries with a more detailed description of lease agreements and title are customary as well, although high level reports only summarizing red flags are also often provided.

    A question usually raised with the seller during the due diligence process is to confirm that the seller is entitled to the legal and beneficial ownership of the real estate. A split between the legal and beneficial ownership is not necessarily apparent from the Land Registry. Market practice is a seller's warranty in that respect. Further, the Q&A process is an important part of the due diligence.

  8. What legal issues (if any) cannot be covered by usual legal due diligence?

    Certain potential legal issues are not covered by a legal due diligence investigation. In particular easements created by designation or prescription (bestemming of verjaring) are not covered, since usually such easements are not registered with the land registry and it is possible that the owner is not aware of the existence of such easement.

  9. What is the usual process for transfer of commercial real estate?

    There are several ways in which the ownership of real estate can be acquired in the Netherlands. The ownership can be directly acquired (the buyer acquires the ownership or a real right regarding the real estate), the legal structure in which the ownership is regulated can be acquired (share transaction, acquisition at the level of the holding company or acquisition of a contractual position), or bank loans (secured or unsecured) related to the real estate can be acquired, also known as a loan‐to‐own strategy.

    Real estate purchase transactions
    A real estate purchase transaction consists of several phases. It must first be determined what type of real estate will be acquired: multitenant real estate, offices, retail/shopping centres, residential real estate, new developments or development locations. Before or while determining the type of real estate, advisors must be engaged who have specific knowledge of that type of real estate, such as a commercial advisor, a legal advisor (lawyer/civil‐law notary) or a tax consultant, who will then supervise the transaction.

    The next phases involve the actual purchase of the real estate. In the vast majority of purchase transactions a letter of intent or heads of terms is first signed with the owner. The buyer's advisors then perform a due diligence investigation and a survey of the state of repair of the real estate.

    Once the due diligence investigation and a survey have been completed, the negotiations on the real estate contract are commenced and, after the real estate contract has been signed, the purchase transaction is completed by transferring title to the real estate.

    Real estate sales transactions
    A real estate sales transaction also consists of several phases. The first phase involves an investigation of the market, the setting up of a data room and the performance of a due diligence investigation by the owner in consultation with its legal and commercial advisors. The outcome of the investigation determines what issues have yet to be optimised, changed or solved, such as the question whether or not a lease should be extended or technical problems should be solved before the real estate is actually placed on the market. If applicable, it must also be discussed with the financier on what conditions it is willing to cooperate in releasing the security. Then the sales documentation is drawn up, such as the investment memorandum, a letter of intent or heads of terms, and the real estate contract.

    When the data room has been set up and the sales documentation has been completed, the actual sales phase commences. The commercial advisor engaged sends the investment memorandum to potential buyers. The next phases are similar to a real estate purchase transaction as described above, starting with the letter of intent or heads of terms.

    Points for attention
    All real estate transactions have their own specific points for attention. The points for attention in a commercial transaction are the scope of the due diligence investigation to be performed, the firmness of the guarantees to be issued or stipulated, the security to be provided by the buyer (deposit, bank guarantee or group guarantee) and the distribution of the risks between the signing of the real estate contract and the transfer of title to the real estate.

    Transaction Steps





    · Possible vendor due diligence

    · Preparation of draft sale and purchase agreement

    · Negotiation of sale and purchase agreement with buyer

    · Due diligence

    · No prescribed form of agreement but industry standard terms

    Signing to Closing

    · Satisfaction of any conditions to closing

    · Arrangement of purchase price funding (including any third party debt)

    · Satisfaction of any conditions to closing

    · A deposit of up to 10% of the purchase price is typically paid on signing which will be forfeited if the buyer fails to complete sale


    · Repayment of any existing debt and discharge of mortgage (if any)

    · Execution of deed of transfer

    · Execution of deed of transfer

    · Payment of purchase price


    · Payment of transfer tax

    · Registration of transfer at land registry (by the notary)

    · Land Registry registration fee varies

  10. Is it common for commercial real estate transfers to be effected by way of share transfer as well as asset transfer?

    Although the majority of commercial real estate transactions still concern asset deals, over the past decade more and more of these transactions are structured as a share deal.

  11. On the sale of interests in land does the benefit of any occupational leases and income automatically transfer?

    If the ownership of real estate that is leased out is transferred, the position as lessor transfers automatically to the new owner, as a result of which in principle the benefit and income transfers to the new owner. However, provisions that are not considered inextricably linked to the lease might not transfer automatically dependant on the content of such provision. For such provisions, contract take-over might be required.

  12. What common rights, interests and burdens can be created or attach over real estate and how are these protected?

    Common burdens on real estate are easements, qualitative obligations and perpetual clauses.

    An easement is a right in rem, established on a cadastral parcel as servient land and in favour of (the owner of) the dominant land. A servitude can include an obligation to tolerate or to refrain from acting (dulden of niet doen) regarding factual acts.

    A qualitative obligation is an obligation ensuing from an agreement with regard to real estate, automatically transferring to the legal successor of the owner of such real estate (in other words: the qualitative obligation is an obligation with effect on property rights). A qualitative obligation contains an obligation for an owner of real estate (or party entitled to a right in rem) to tolerate or to refrain from acting (dulden of niet doen) regarding legal acts, and cannot include the obligation to act.

    A perpetual clause is a clause stipulating that the owner of real estate imposes certain obligations on its legal successors in title, without effect on property rights. The obligations may concern obligations to act, refrain from acting or to tolerate legal and/or factual acts. However, in practice perpetual clauses in notarial deeds are imposed on the legal successor of an owner in successive notarial deeds (for example deeds of transfer), unless the party in favour of which the perpetual clause was agreed upon confirms that the perpetual clause is not applicable any longer and does not need to be imposed on legal successors of the owner.

  13. Are split of legal and beneficial ownership of real estate (ie Trust structures) recognised?

    The legal and beneficial ownership of real estate can be split. The legal entitlement is registered with the land registry. If the entity entitled to the legal ownership is not entitled to the beneficial ownership, the land registry does not reflect this split at all times. The split of legal and beneficial ownership is apparent from the land registry if the legal owner acquired the legal ownership in its capacity of, for example, custodian of the beneficial owner, or if the legal ownership and beneficial ownership was transferred by a seller to the purchasers in the same deed of transfer. However, if the full title was transferred and the titleholder transfers solely the beneficial ownership, this is not registered with the land registry. Therefore, obtaining a warranty from the seller that it is entitled to the legal and beneficial ownership is of high importance.

  14. What are the main taxes associated with commercial real estate ownership and transfer of commercial real estate?

    Taxes on real estate and real estate transactions include VAT, transfer tax, corporate income tax and personal income tax.

    The transfer of a building (and the related land) is usually exempt from VAT. If, however, a building and the land are transferred within two years after the building was first put to use or in the case of a building site, the transfer is subject to VAT at a rate of 21%. It is also possible to opt for transfer subject to VAT if the relevant conditions are met.

    Real estate transfer tax
    Transfer tax is imposed on the acquisition of real estate located in the Netherlands or rights to commercial real estate at a rate of 6%. The rate is based on the purchase price or on the fair market value, if that value is higher. In specific cases the transfer of real estate may be exempt from transfer tax. An important exemption is the concurrence exemption, which prevents accumulation of (non‐deductible) VAT and transfer tax. Transfer tax may also be due if an interest of more than 1/3 is acquired in a company whose assets largely (>50%) consist of real estate if at least 30% of those assets are real estate located in the Netherlands. Moreover, the company must hold that real estate with a view to its sale, acquisition or operation (e.g. lease). The depreciation of real estate is limited to the 'WOZ waarde' (value for the purposes of the Valuation of Immovable Property Act) in the case of investment real estate and to 50% of that value for buildings used by the owner itself. Profit generated from real estate is subject to personal or corporate income tax, unless a fiscal investment institution is involved. The owner and/or user of Dutch real estate may furthermore be confronted with local taxes, sewerage levies, district waterboard tax and tax on encroachments.

  15. What are common terms of commercial leases and are there regulatory controls on the terms of leases?

    Different types of real estate
    Three lease regimes apply to real estate in the Netherlands:

    • residential real estate;
    • commercial real estate; and
    • other commercial real estate, such as offices.

    The Raad voor Onroerende Zaken (Dutch Real Estate Council) has drawn up model contracts and related general provisions for these regimes (known as the “ROZ models”). Those model contracts are used in the Netherlands particularly for commercial leases. In principle, the ROZ models are landlord‐ friendly and, depending on the specific agreements made, will have to be made more balanced. The current market conditions are conducive to custom-made leases.

    Commercial real estate
    The commercial real estate category consists of several sectors, including retail and the hotel and catering industry. Landlord and tenant law gives the tenant of commercial real estate extensive protection that cannot be departed from to the tenant’s disadvantage. The tenancy protection is twofold and consists of mandatory lease terms and protection from termination. In principle, a lease is entered into for a period of five years and is subsequently extended by five years by operation of law. A landlord may give notice of termination of the lease at the end of a lease term only if statutory termination grounds are met, such as poor management by the tenant and urgent use by the landlord itself. If the tenant does not accept the termination, a court judgment is required. The judge may grant the tenant a contribution towards the removal and fit‐out costs. This tenancy protection does not apply in the event of a lease with a term of less than two years. If the tenant’s business is transferred, the tenant has a basic right to be substituted as the tenant by the acquiring party. In that case the landlord is bound by the contract takeover. With regard to other matters, such as repairs and liability, the parties are relatively free to make agreements at their discretion. It is not unusual for the tenant to provide security in the form of a bank guarantee or a deposit for the proper performance of its obligations. The notice period for both the tenant and the landlord is 12 months, in principle.

    Other commercial real estate
    The lease of other commercial real estate, such as offices, plants and surgeries, is not specifically regulated. The parties are relatively free to agree at their discretion on the lease conditions in question. Tenants are protected by law against eviction in order to protect them against overly strict termination clauses. This means that if a tenant does not accept the termination of the lease or has not terminated the lease itself, it may continue to use the leased property for a period of two months after the end of the lease. At the tenant’s request that period may be extended to 12 months, in principle. It is not possible to derogate from this provision to the tenant’s detriment.

  16. How are use, planning and zoning restrictions on real estate regulated?

    The Wet bodembescherming (Soil Protection Act) sets rules to protect the soil and groundwater. The Act distinguishes between old pollution (before 1987) and new pollution (after 1987). A duty of care applies to new pollution, which means that any party who performs any acts on or in the soil is required to take measures to avoid pollution or to reverse it to the extent possible. If a remediation comes under the Uniform Remediation Standards Decree, notification to the competent provincial or municipal authorities suffices and no remediation plan is required. In other cases a remediation plan must be submitted to the competent authorities in accordance with the Soil Protection Act.

    The rules referred to in the Asbestos Removal Decree 2005 and the Buildings Decree 2012 apply to the removal of asbestos. When asbestos is removed, a demolition report must always be filed with the competent authorities (usually the municipality).

    Zoning plan
    A plot’s possibilities of development and use depend on the zoning plan. Regulations regarding the adoption of zoning plans can be found in the Wet ruimtelijke ordening (Spatial Planning Act). If the zoning plan is breached, the municipality can take enforcement measures by imposing an order subject to a penalty or by enforcing an administrative order. The offender is then given a period in which to put an end to the breach, before forfeiting a penalty or before the municipality itself puts an end to the breach and recovers the costs from the offender. The rules in question can be found in the Algemene wet bestuursrecht (General Administrative Law Act). Zoning plans are amended and updated on a regular basis (at least once every ten years). The procedure in question takes 26 weeks in principle, but longer in practice.

    Integrated environmental permit
    The zoning plan also sets out the framework within which an integrated environmental permit is granted. The integrated environmental permit and its assessment framework are regulated in the Wet algemene bepalingen omgevingsrecht (Area Exploitation Permits General Provisions Act). The integrated environmental permit integrates several permits for several activities (such as construction, installation, the environment and fire safety). The Area Exploitation Permits General Provisions Act therefore frequently refers to specific Acts, such as the Environmental Management Act (regarding the environment) and the Housing Act (regarding construction). It is possible to apply for an integrated environmental permit for each activity separately, unless the activities are inextricably linked. Notification suffices for some activities. Apart from a few specific cases, this applies, for instance, to demolition and to the fire safety of buildings that can hold more than 50 persons or when rooms are let to five or more individual tenants.

    The integrated environmental permit must be applied for digitally via the website. The competent authorities are usually the Municipal Executive of the municipality in which the activity takes place. The standard procedure for handling an application for an integrated environmental permit takes 8 to a maximum of 14 weeks, after which the applicant can file an objection with the administrative body itself, followed by an appeal with the court and subsequently with the Administrative Law Division of the Council of State. The Area Exploitation Permits General Provisions Act also provides for an extensive procedure, which takes 26 to a maximum of 32 weeks, after which an appeal and an appeal in cassation may be filed, or only an appeal with the Administrative Law Division of the Council of State.

    The extensive procedure applies, for instance, to an integrated environmental permit that departs from the zoning plan. If an activity conflicts with the zoning plan, it may nevertheless go ahead if the municipality is willing to give permission to depart from the zoning plan. The Municipal Executive has the authority to give that permission.

    If an integrated environmental permit has been issued and the activities are continued at some point by a party other than the permit holder, the integrated environmental permit is transferred by operation of law. That transfer must be notified to the competent authorities, however.

  17. Who can be liable for environmental contamination on real estate?

    According to the Soil Protection Act (Wet bodembescherming), the polluter that caused the pollution is liable for the decontamination of polluted soil. In practice however, the polluter often cannot be traced or no longer exists. In that case, the owner or leaseholder of the polluted property is held liable for the costs of decontamination. The government is only responsible for decontamination in very exceptional circumstances, which is very rarely the case with a commercial purchaser. Furthermore, even if the government is considered responsible, the government can generally recover the costs it makes for decontamination from the owner/leaseholder.

    An exception to the rule that the polluter is liable for the costs of decontamination is made for business parks as defined in the Dutch Income Tax Act (Wet inkomstenbelasting 2001) and the Dutch Corporate Income Tax Act (Wet op de vennootschapsbelasting 1969). Business parks are a broad concept under these acts: almost every site with a company/business on it qualifies as such. If the grounds of a business park are seriously polluted and decontamination is urgent, the owner/leaseholder is responsible for decontamination.

    We also note that asbestos in buildings is a form of environmental pollution still frequently encountered. If there is a duty to remove asbestos, the owner/leaseholder is liable for the costs.

  18. Is expropriation of real estate possible?

    The government can expropriate real estate in The Netherlands on the basis of the Expropriation Act (Onteigeningswet). Expropriation of real estate can only take place in the following circumstances:

    • the public interest is demonstrably served by expropriation, and this interest cannot be realized any other way; and
    • the government has demonstrably attempted to obtain the real estate through an amicable settlement with the owner.

    If these circumstances are fulfilled but the owner of the real estate can substantiate that he will realize the new designation desired by the government himself, expropriation does not take place. However, if the owner’s plans deviate too much from the government’s, the government can ask the court for permission to expropriate nonetheless.

    We also note that according to the Expropriation Act, expropriation cannot financially set back the owner of real estate – in capital nor income. The government must therefore compensate all damages that are the direct result of expropriation.

  19. Is it possible to create mortgages over real estate and how are these protected and enforced?

    The most customary way of financing real estate is a loan, possibly taken out by the party acquiring title to the real estate, for which the owner of the real estate grants mortgage collateral to the lending institution.

    The mortgage right is created on the registration in the Land Register of a copy of the mortgage deed. The mortgage deed is drawn up by and executed before a Dutch civil‐law notary. The party granting a mortgage right must always appear before the civil‐law notary in person (which means that the managing director himself must sign the mortgage deed) or must issue a notarial power of attorney. The mortgage right is a real right, i.e. not a personal right.

    In addition to a mortgage right, collateral is usually also provided in the form of a pledge on e.g. the shares in the legal entity that owns the real estate, fixtures and fittings, rental income, bank accounts, insurance payments, etc. The creation of a pledge also requires a notarial deed, but in that case the pledger needs not to personally appear before the civil‐law notary; a non notarial power of attorney also suffices. A pledge is also a real right.

    Right of summary execution
    If a debtor is in breach of performance, the mortgagee/pledgee can exercise its right of summary execution (forced sale). This means that the mortgagee/pledgee can sell the collateral in public. The mortgagee/pledgee sells the collateral in its own name. The mortgagee/pledgee usually does not give any guarantees on the sale of the security. However, the mortgagee/pledgee will have to share its knowledge of the collateral that is not generally known with the buyer if that information is relevant to the buyer in entering into the purchase.

    Forced sale is surrounded by statutory regulations and terms and deadlines. The sale of real estate must take place, for instance, before a civil‐law notary, who records the date, place and time of the sale, in consultation with the mortgagee.

    In principle, the sale takes place in public in accordance with local custom. The sale of real estate is usually announced in a nationwide newspaper, internet and by means of placarding in accordance with local custom. All “parties concerned” must furthermore be given notice of the forced sale. In the case of real estate that must be done by means of a writ at least four weeks before the forced sale.

    In light of the aforesaid regulations a financier must take into account a turnaround time of at least three months before the execution process has been completed and the proceeds have been paid to it.

    Private sale
    In the event of forced sale on the grounds of both a mortgage right and a pledge, a private sale is possible instead of public sale in certain circumstances. Financiers can exclude a private sale of pledged goods, but not of real estate. Statutory provisions regulate the terms within which private bids can be made on real estate to the civil‐law notary and what conditions those bids must meet.

    By law, both the mortgagee and the debtor are authorised to accept a bid. However, a mortgagee can stipulate that the debtor waives his right to accept a bid as referred to above. That way the mortgagee can decide whether or not to sell the real estate by a private sale.

    Other collateral
    In addition to the collateral referred to above, there are also other forms of collateral in real estate financing, such as suretyship and step‐in rights (in the case of new developments). Step‐in rights allow the financier to take control of a building under construction if the debtor fails to fulfil its obligations, in order to safeguard the value of the building.

  20. Are there material costs associated with the creation of mortgages over real estate?

    In principle, no transfer tax is due and the costs for the creation of the mortgage right are limited to the notarial and land registry fees.

  21. Is it possible to create a trust structure for mortgage security over real estate?

    A mortgage can be established in favour of one or more mortgagees. It is possible to establish a right of mortgage in favour of a security agent acting as agent for a syndicate of lenders.

  22. What is the main legislation relating to commercial real estate ownership?

    The main legislation governing real estate ownership under Dutch law is laid down in the Dutch Civil Code. Section 3 and 5 of the Dutch Civil Code in particular contain the legal framework for ownership of real estate, leasehold and rights in rem such as rights of superficies, mortgage rights and easements. In addition Sections 6 and 7 of the Dutch Civil Code are of importance, covering the law of obligations and specific (mandatory) provisions regarding sale and purchase and lease of real estate.