Because of the sustainability objectives in the Netherlands, we wrote about the increasing focus on the energy saving obligation earlier. 2030 – the year in which CO2 emissions must have been halved – is approaching. This makes it even more important to enforce the law on the energy saving obligation. Nevertheless, there are few signs of strict enforcement. Insufficient enforcement capacity seems to be one of the reasons for this. However, a judgment of the Court of Gelderland has been published that deals with the question who was responsible for an infringement of the energy saving obligation: the tenant or the landlord?
The case
In this case, a tenant operated a gym in a building it rented from the owner. The competent authority discovered two infringements of the energy saving obligation. The cavity wall should have been insulated and the ventilation system should have had an automatic switch on and off feature. These measures should have been taken since their payback period was five years or less. This follows from the energy saving obligation.
The competent authority imposed an order subject to a penalty for non-compliance on the tenant. Unless the tenant takes the measures still, it has to pay a penalty. The tenant disagreed.
Position of the tenant
The tenant thought it was not within its power to end the infringement and to take the measures. The tenant claimed that it was not allowed to do so under the agreement. The landlord, on the other hand, did have control over the cavity wall and the ventilation system in its capacity of owner of the building. The competent authority should therefore have addressed the owner. The tenant referred to the lease, which provides among other things that it is not allowed to make alterations to the leased space – such as drilling holes in the external walls – without the landlord’s consent. Moreover, it appeared from the lease that the equipment is at the landlord’s risk.
The Court’s ruling
The Court asked itself the question who was the infringer of the energy saving obligation in this case. That is ‘the operator of the establishment’. (See also our previous article for an explanation of this point.) According to the Court, this question is unrelated to the question whether it is also in the operator’s power to end the infringement (as the tenant argued). It is important to establish who has de facto control over the establishment.
The Court held that the tenant had rightly been designated as the operator in this case, since it operates the establishment (the gym). In that capacity it has de facto control over the activities and business operations of the establishment, according to the Court. The owner of the building has nothing to do with these activities. The fact that the landlord has to give consent for drilling in external walls and is responsible for the equipment in the leased space does not mean that the landlord gets actual control over the establishment (here: the gym). The reliance the tenant made on the above-mentioned clauses from the lease does not alter this.
Then, the Court discussed previous case law of the Council of State. Firstly, it referred to a ruling that implies that an order subject to a penalty for non-compliance can only be imposed on the infringer who has the power to perform the order (the measures to the cavity wall and the ventilation system). It is doubtful whether the tenant could perform these measures.
By contrast, the Court referred to case law according to which the contractual relationship between a landlord and a tenant is no impediment to performing an order and that the absence of ‘private-law consent’ – in this case the owner’s consent to drilling in the external wall, for example – is essentially at the risk of the infringer.
The Court concluded that the tenant in this case had not substantiated that it did not have the landlord's consent. When asked, the tenant was unable to confirm at the hearing that such consent had been asked. The Court considered that the fact that consent is needed does not yet mean that the order subject to a penalty can never be complied with. In the Court’s opinion, it was within the tenant's power to end the infringement.
Conclusion
In spite of the fact that the tenant needs consent to make adaptations to the cavity wall and the ventilation system, the Court thinks that in this case the tenant could have taken the measures. Even if the tenant does not have this consent, the Court thinks that this does not mean that they can never comply with the order subject to a penalty. In a way this is remarkable, since it implies that the tenant should also have taken the measures without the landlord’s consent. By doing so, the tenant would act in breach of the lease (and would consequently run the risk of incurring penalties from the landlord). It appears from this ruling that the arrangements and the division of responsibility in the lease are only relevant up to a point to the assessment of who the infringer of the energy saving obligation is. An appeal has been lodged against this ruling, and we look forward with interest to its outcome.
