As is well known, tenants facing a drop in turnover due to the coronavirus pandemic can request a rent reduction from their landlord. We have already published several articles on this point of contention between tenants and landlords. A clear line of case law appeared to have emerged, but the Amsterdam Court of Appeal has now issued a striking ruling. The debate therefore continues.
TVL intended to cover fixed costs
We previously reported that, for the purposes of calculating the rent reduction, the NOW is not counted as turnover, whereas the TVL is: vwg.nl/news/rent-discount-benefit-from-the-TVL-counts-towards-the-total
The Amsterdam Court of Appeal took a different view, however. A landlord did not agree that the TVL subsidy should be counted as turnover. He took the view that the TVL subsidy should be used for its intended purpose: to pay fixed costs. The Court of Appeal agreed with this and ruled that the TVL must be deducted from the total fixed costs. The amount of rent remaining after deduction of the TVL subsidy is then multiplied by 50% of the percentage drop in turnover; the result of that calculation represents the rent reduction.
Beneficial for landlords
This ruling works in landlords’ favour, as the TVL subsidy is no longer counted as part of turnover, but as part of the compensation for fixed costs. As a result of the Court of Appeal’s ruling, the rent reduction in this case was reduced by more than €200,000.
Incidentally, the substantial reduction was also due to the fact that the maximum TVL grant amounts were further increased in 2021. The maximum TVL grant was €90,000 in 2020 and €550,000 in 2021 for SMEs. For larger companies, it was €600,000.
This is, of course, a single ruling, so the question is whether this line of reasoning will be upheld in future case law.