No-lease clause and forced sale where tenancies already exist
Mortgagee seeks to evict tenants from a listed building at a forced sale
A German mortgagee applied to the Amsterdam Court of Appeal for leave to invoke the no-lease clause against the tenants of a listed building (rijksmonument). The owner — a Curaçao company — had paid no interest since September 2023 on two loans originally totalling €4.9 million. The Court of Appeal upheld the refusal, but on entirely different grounds from the provisional relief judge.
The tenants were five children of the owner's director. Four of them had leased the property since 25 September 2003; the fifth child was added to the contract in 2016. The mortgage deed containing the no-lease clause was dated 27 October 2003 — more than a month later than the lease.
The claim against the owner had been assigned several times over the years: first from the original bank to a debt purchaser, then to the German appellant. When the owner stopped paying, the mortgagee levied a third-party attachment in execution against one of the children. That led to garnishee declaration proceedings which ended in a settlement.
In that settlement the mortgagee's lawyer confirmed that it would "bring no proceedings relating to the tenancy in the future" against the children. The provisional relief judge read this as a bar to invoking the no-lease clause and refused the application. Three days after that confirmation, the mortgagee nonetheless gave notice of the no-lease clause.
Court of Appeal: settlement does not exclude the no-lease clause, but the tenancy predates the mortgage
The Court of Appeal applied the Haviltex standard, giving extra weight to the linguistic meaning because two lawyers had drafted the agreement. The wording was "very brief, very general" and contained no reference to the no-lease clause. Exclusion would have had far-reaching consequences: the mortgagee would not only lose its right but would also no longer be able to comply with its statutory duty under Section 3:264 DCC.
The Court of Appeal held that the children could not reasonably have understood the agreement to reach that far. There was no indication for them that the mortgagee was willing to accept such a far-reaching consequence. Had they wanted that interpretation, they should have had it expressly included in the agreement. The mortgagee's ground of appeal succeeded.
Even so, the Court of Appeal upheld the order — on the basis of the devolutive effect. The 2003 lease had been concluded before the mortgage deed. Under Section 3:264(4) DCC, the no-lease clause cannot be invoked against tenants to whom the property had already been let when the mortgage was created. The mortgagee disputed the validity of the lease, but the Court of Appeal considered its existence sufficiently plausible for the time being on the basis of the copy submitted.
The fact that the original bank's mortgage file no longer contained the lease did not affect its existence — the file was demonstrably incomplete. The fifth child, added to the contract in 2016, was also protected: the Court of Appeal characterised that addition as a limited new letting on no more onerous terms within the meaning of Section 3:264(4) DCC.
What does this mean for mortgagees and tenants at a forced sale?
For mortgagees the lesson is twofold. Be precise when recording settlement terms. A vague undertaking to "bring no proceedings" may — despite the favourable interpretation in this judgment — be stretched in another context into a full bar on the no-lease clause. A party wishing to retain that right should exclude it expressly in the settlement text.
In addition, reconstruct the complete mortgage file before enforcement and verify whether any leases already existed before the mortgage was created. An incomplete bank file works to the disadvantage of the mortgagee — not the tenant. In these urgent proceedings the Court of Appeal requires no conclusive proof from the tenant; a copy of the agreement suffices for the time being.
For tenants, this judgment confirms that the protection of Section 3:264(4) DCC is robust. Even with an incomplete bank file and a chain of assignments, a lease predating the mortgage holds. See also the earlier analysis of enforcement and leases.
More about this area of law: Real Estate & Construction
Frequently asked questions
When does Section 3:264(4) DCC protect the tenant against the no-lease clause?
The protection applies where the lease already existed at the time the mortgage containing the no-lease clause was created. The tenant need not show that the bank knew of the letting or consented to it. What matters is the chronological order: first the tenancy, then the mortgage. Adding a new tenant to the existing contract may, subject to conditions, also be protected.
Is invoking a no-lease clause mandatory at a forced sale?
Section 3:264 DCC gives the mortgagee the power to invoke the no-lease clause. In practice this is almost always warranted at a forced sale in order to maximise the auction proceeds — buyers want certainty of delivery free of tenancy. In this judgment the Amsterdam Court of Appeal even characterises it as a statutory duty that may be waived only in exceptional cases.
Can a settlement between lawyers block the no-lease clause?
That depends on the wording. In this judgment the Court of Appeal held that a vague agreement to "bring no proceedings" did not exclude the no-lease clause, partly because of the far-reaching consequences that would have. A party wishing to exclude the no-lease clause through a settlement must include this expressly and unambiguously in the agreement.
Amsterdam Court of Appeal, 3 March 2026, ECLI:NL:GHAMS:2026:582.
Cited case law
Courts of Appeal: ECLI:NL:GHAMS:2026:582