Netherlands Commercial Security Deposits: Bank Guarantees and Rules

For commercial leases in the Netherlands, different rules apply to security deposits compared to residential properties. There is no statutory cap, and terms are largely determined by the principle of freedom of contract under the Dutch Civil Code (Burgerlijk Wetboek), which came into effect in its modern form on 1 January 1992. Specific provisions for business premises are found in Articles 7:290–7:310 BW (retail/hospitality) and Article 7:230a BW (offices/other).

No Statutory Maximum

Unlike residential leases (capped at 2 months' base rent), commercial leases have no statutory ceiling for security deposits. The Good Landlordship Act does not apply to business premises.

Common Practice

Bank Guarantee vs. Cash Deposit

Bank Guarantee

The bank guarantee is the most common form of security in commercial leases:

• The bank guarantees payment to the landlord upon tenant default, usually 'on first demand' (op eerste verzoek)
• Irrevocable and unconditional — the landlord can claim directly
• Banks require the tenant to provide collateral, typically by blocking the equivalent amount in a dedicated account or utilizing a credit facility
• The tenant pays an annual commission to the bank (typically 1–2% of the guarantee amount)
• Upon lease termination, the bank guarantee is returned

Cash Deposit

• The tenant pays a sum to the landlord
• Legally, a cash deposit is a debt obligation (vordering). There is no statutory requirement for a commercial landlord to hold these funds in a separate account or trust (Stichting Derdengelden) unless explicitly agreed in the lease
• Without such an agreement, the funds commingle with the landlord's assets, and the tenant is a concurrent creditor in the event of the landlord's bankruptcy
• Upon lease termination, the amount is returned minus any deductions

• No statutory interest obligation — Under Article 6:119 BW, statutory interest is not due on security deposits unless the landlord is in default. The ROZ General Provisions explicitly state that no interest is reimbursed to the tenant.

Deductions

The landlord may draw on the deposit or bank guarantee for:

1. Outstanding rent and service charges
2. Repair costs — damage beyond normal wear and tear
3. Outstanding VAT — if applicable
4. Contractual penalties — as agreed
5. Eviction costs — if the tenant fails to vacate on time

Return

The return deadline is contractually determined, primarily by the ROZ model:

• ROZ model: The landlord returns the security as soon as possible after the lease ends (e.g., Art 25.2 of the 2022 Office Model), provided the tenant has vacated the premises, a final inspection (oplevering) has occurred, and all financial obligations are settled.
• In practice: Typically within 1–3 months after handover following the settlement of all outstanding items.

ROZ Model Agreement

Most commercial leases in the Netherlands are based on the ROZ model (Council for Real Estate Affairs). This model contains standard provisions on:

• Bank guarantee amount (typically 3 months' rent + VAT + service charges)
• Conditions for drawing on the guarantee
• Procedure upon termination

Disputes and Jurisdiction

Disputes regarding commercial security deposits or bank guarantees are heard by the Cantonal Court (Kantonrechter), which is a division of the District Court (Rechtbank). Under Article 93(c) of the Code of Civil Procedure (Wetboek van Burgerlijke Rechtsvordering), the Cantonal Court has exclusive jurisdiction over all lease-related matters regardless of the amount in dispute.

Best Practices for Landlords

1. Use the ROZ model — it is the market standard and widely accepted
2. Request a bank guarantee — this provides more security than a cash deposit
3. Request adequate security — 3–6 months is standard
4. Define conditions clearly — when and how the guarantee can be claimed
5. Verify the bank guarantee — ensure it is irrevocable and unconditional

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