Rotterdam officials reject automatic lease termination upon bankruptcy

Rotterdam Alderman Chantal Zeegers has informed the Building and Housing Committee that the municipality will not implement a policy where ground leases (erfpacht) automatically terminate due to a lessee's bankruptcy. Legal experts have advised against using bankruptcy as a standalone reason for termination.

Zeegers noted that such a provision could make it more difficult for lessees to secure financing. Furthermore, the municipality cannot use bankruptcy to bypass existing legal restrictions regarding the termination of leases due to failure to meet obligations.

Instead, Zeegers suggested exploring provisions for terminating leases in the public interest, a method already utilized in Amsterdam. This approach requires the municipality to demonstrate a reasonable interest in termination, follow careful procedures, and compensate the lessee for the current value of the leasehold right. These possibilities may be further developed during the update of the General Terms and Conditions for ground leases, expected by the second quarter of 2027.