Leases
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As opposed to the Danish Business Rent Act, the Danish Rent Act provides the tenants with a high level of protection in the contractual relationship with the landlord, notwithstanding the contents of the contract.
Are there any limitations when renting to private tenants?
Accordingly, termination of the contract by the landlord may only occur under specific conditions, such as the tenant’s failure to pay the rent. A landlord who wishes to use the premises himself may generally terminate the contract with a one-year notice.
Increase in rent requires certain conditions to be met, and as a general rule, the rent cannot be increased (or set when the lease is commenced) to a level higher than the “value of the rented premises”, which in practice is much lower than what commercial parties would consider market rent.
How are commercial leases regulated?
The Danish Business Rent Act contains provisions on commercial leases, which reflect the fact that the parties in question are commercial parties giving a degree of freedom of contract with some significant exceptions, such as provisions on the termination of the lease.
By registering their contract, or part thereof, with the Danish Land Register, tenants obtain protection from the subsequent purchasers or creditors of the landlord. Such step should therefore be considered in connection with entering into a lease agreement.
It should furthermore be noted that the time of entering into a lease agreement may affect the validity of provision in the contract in connection with e.g. rent adjustment clauses, market rent, competition protection, claims concerning compensation and the right to sublease and maintenance cf. the Danish Business Rent Act Section 89,.
Are there any limitations on commercial leases?
Unless otherwise agreed, increases in rent may only take place if a four-year increase period is respected. The rent based on the “market rent” then increases equally each year during this four-year period until the final increase is reached.
If the parties agree on permitting the landlord to require changes made in the terms of the lease, tenants are protected from new changes for eight years.
The above does not constitute legal counselling and Moalem Weitemeyer Bendtsen does not warrant the accuracy of the information. With the above text, Moalem Weitemeyer Bendtsen has not assumed responsibility of any kind as a consequence of a reader’s use of the above as a basis of decisions of considerations.