As expected, more court rulings are being issued following disputes between landlords and tenants over rent reductions in connection with the coronavirus crisis. Amsterdam District Court In this regard, it does not take into account the NOW grant received, but it does take the TVL into account.
50/50
In our article Rent reduction due to the coronavirus crisis (2) The case concerned a café/restaurant that had been forced to close. The magistrate ruled that 50% of the rent must be paid for this period. And 75% for the periods during which the business was open, albeit subject to far-reaching restrictions.
37,5%
The case before the Amsterdam District Court concerns a hotel in Amsterdam. The hotel is not being forced to close, but it is facing a 75% drop in turnover. This is due to a very sharp fall in occupancy rates and a lower average room rate.
This court, too, takes as its starting point that the financial loss must be shared equally between the tenant and the landlord. For the period from 16 March to 31 December 2020, the rent will be reduced by half the decline in turnover, or by 37.5%.
For the period from 1 January 2021 until such time as the government lifts the restrictive measures or turnover returns to normal levels, the rent will be reduced in accordance with the following formula: original rent – (decline in turnover from Q1 to Q3 / 2) = revised rent.
Not NOW, but TVL
The landlord takes the view that the subsidy received by the hotel under the NOW scheme should be included in turnover. The Court does not agree with this argument. The NOW scheme must be disregarded because this subsidy is earmarked to contribute towards wage costs.
The TVL grant, on the other hand, is partly intended to cover fixed costs. Rent forms part of these fixed costs. However, it is not clear exactly what proportion of the TVL grant relates to rent. The hotel has included the full TVL grant in its turnover calculations.
Other propositions
The landlord claimed that the hotel had not done enough to minimise the damage. However, the hotel made it clear that it had made sufficient efforts to attract customers. In doing so, it had focused on the local market and people working from home. It had also offered significantly reduced prices.
The landlord also argued that the hotel should have made some of its staff redundant in order to be able to pay the rent. The Court did not accept this argument, as the hotel had claimed the NOW scheme.
Finally, the landlord has not demonstrated that the management fees were the reason why the rent could not be paid. These fees were, in fact, reduced and set to zero from September 2020 onwards.