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Country - Denmark
Commercial Leases
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A. SOURCES OF LEASE LAW
Applicable legislation
Law no. 934, 20 December 1999 (the Act of Commercial Leases)
Law no. 347, 14 May 2001 (the Rent Act)
Law no. 562, 19 June 2001 (the Act of Social Leases)
Law no. 348, 14 May 2001 (the Act of Lease Regulation)
Do any specific rules apply to commercial leases?
Yes, the Act of Commercial Leases.
Do different regimes apply to leases of commercial premises depending on the use of the premises by the lessee (offices, warehousing, industrial, retail)?
No.
B. DURATION AND TERMINATION OF LEASES
Is there a minimum or maximum obligatory term?
No. Any length of term can be agreed between the parties but leases of commercial premises in Norway are usually granted for an unspecified (indefinite) period of time.
Does the lessee have a right to renew the lease upon expiry of the initial contractual period?
No.
Do lessees enjoy security of tenure (i.e. the right to remain in occupation after their lease expires)?
No.
Do leases involve a lengthy procedure for the effective recovery of possession?
Leases usually contain provisions allowing the lessor to terminate on non-payment of rent or breach of covenant. Normally, a lessor will seek a court order to enable it to recover possession of the premises and this procedure can take up to a year, sometimes more.
Can government/local authorities require the compulsory termination of a lease?
Yes, if the property is compulsorily purchased.
Is there a preferential right of acquisition?
This can freely be agreed between the parties. Preferential rights are not common.
C. RENT AND COSTS
Are variable rental agreements common?
Yes, primarily in commercial leases.
Most common indexation
Annual: Net consumer price index published by the Public Administration or a fixed percentage.
Market Rent Review - based on independent experts.
Who usually pays the common expenses?
Usually paid by the lessee in the proportion which corresponds to the leased area.
Are there any other expenses connected with the lease?
No, although leases can be registered at the Land Registry which involves payment of a registration fee.
These payments are freely agreed between the parties.
Which indirect taxes are applicable?
VAT at 25% will be payable only if the lessor elects to charge VAT.
D. OBLIGATIONS OF LESSOR AND LESSEE
Who is responsible for the different works on the premises?
This is freely agreed between the lessee and the lessor.
Exterior maintenance is usually carried out by the lessor, and the interior maintenance is usually carried out by the lessee.
Can the lessee alter or improve the premises?
Most leases limit the lessee's rights to alter or improve the premises. Alterations normally require a prior consent from the lessor.
On termination, the lessor may require the improvements to be removed to avoid having to pay the lessee compensation.
What restrictions are there on the lessee's right to use the premises?
Leases will generally restrict the use of the premises to a particular use.
The lessee will also be restricted by planning law to a use which has been approved by the planning authority or which corresponds to past uses of the property.
Is there a right to transfer the lease?
According to the law it is legally possible to transfer the lease to another.
The lessor can in the lease agreement require that the lease cannot be transferred.
Is there a right to sub-let the premises?
There is no right for the lessee to sub-lease the lease according to the law, but the lessee and the lessor can freely make an agreement regarding sub-leasing.
What are the usual guarantees?
Cash deposit for an amount of three to twelve months' rent is normally provided.
E. PARTICULAR TYPES OF LEASE
Do office leases have any particular characteristics?
It will generally not be possible for lessees to transfer office leases.
Do retail leases have any particular characteristics?
It will normally be possible for the lessees to transfer retail leases.
Do hotel leases have any particular characteristics?
The rent for hotel leases will often be determined by the profits of the hotel.
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