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On Friday, 21 June, we had our highly successful golf day at Capelle Golf Club. Despite the weather not fully cooperating, the atmosphere was great, making it a wonderful day for all participants.

A Day for Everyone

The golf day was open to both experienced golfers and beginners. The golfers enjoyed the challenging holes on the beautiful course at Capelle Golf Club, while the non-golfers had fun during a two-hour golf clinic guided by two golf pros. There was something for everyone, ensuring that all could enjoy the sporty day.

Although the weather conditions were not ideal, with occasional heavy showers, no one let it dampen their spirits. Raincoats and umbrellas were the fashion of the day, but the good atmosphere quickly overshadowed the weather. The beautiful surroundings and the enthusiasm of the participants made it a successful day.

After this sporty day, we concluded with a generous reception entirely provided by restaurant Mulligan. Here, everyone could chat about their performance on the course and enjoy delicious snacks and drinks. The day ended festively with an award ceremony, where both the best golfers and the most enthusiastic beginners were celebrated.

We would like to thank the organisation of Capelle Golf Club and restaurant Mulligan for their tremendous effort and hospitality. Additionally, we want to thank all the participants for their enthusiasm and participation in our successful golf day. Their presence and sporty spirit made this day a success!

We hope they had as much fun as we did and look forward to seeing everyone at our next events!

This is the fifth and final blog in the series 'The Position of the Client in Construction Projects,' and in this blog, we specifically discuss the revised 5% rule, which provides additional guarantees to private clients. The 5% rule stipulates that a private client having a house built has the right to withhold 5% of the contract sum and deposit this amount with a notary. For instance, if there are still defects upon completion, the deposit serves as a guarantee that the contractor will rectify the issues. Until 1 January 2024, this 5% rule had several disadvantages, especially for the client. Private clients were often unaware that the funds would be released three months after completion if they did not timely indicate unresolved defects and their desire to retain their security. It also frequently occurred that when a contractor wanted to access the deposit funds, they would offer an alternative form of security in the form of a bank guarantee. However, bank guarantees often came with many more conditions that had to be met to release the funds compared to a deposit.

From 1 January 2024, several changes to the 5% rule have been implemented to strengthen the position of the private client.

Article 7:768 of the Civil Code now states:

1. The client can, without invoking Article 262 of Book 6 and while retaining their right to delivery, withhold a maximum of 5% of the contract sum on the final instalment(s) and deposit this amount with a notary instead of paying it to the contractor.
2. The contractor must give the client, no later than two months after the time of completion but not earlier than one month after that time, written notice to indicate whether they wish to use the authority granted in Article 262 of Book 6. The contractor must send a copy of this notice to the notary.
3. The notary will release the amount to the contractor three months after the time of completion if they have received the copy mentioned in the second clause unless the client wishes to use the authority granted in Article 262 of Book 6. In that case, the client must inform the notary of the amount to be retained in the deposit.
4. The notary will also release the amount to the contractor if the client consents, the contractor provides equivalent security to the deposit, or a binding decision states that a deposit is not or no longer justified.
5. If the client owes damages to the contractor due to the deposit mentioned in clause 1 or the equivalent security provided by the contractor, this will be set at the statutory interest referred to in Article 119 of Book 6. During the three months referred to in clause 3, this is not owed, even if no defects are found.

Therefore, 5% of the contract sum can still be deposited with the notary. However, the notary can no longer release the deposit funds to the contractor after the three-month period post-completion without conditions. The notary may only release the funds if the contractor has given the client the opportunity to indicate whether they wish to exercise their right to suspend payment. Between one and two months after completion, the contractor must inform the client in writing of their right to suspend payment and send a copy of this notice to the notary. The notary will only release the funds if they have received this notice from the contractor and if the client has not indicated that they wish to retain the deposit (partially).

Because the client can no longer be surprised by the automatic release of the deposit, they now have a stronger position. They can timely indicate that the funds or a portion thereof should remain in the deposit, especially if there are still unresolved defects. The new rule also reduces ambiguity about whether the house has been completed, as the contractor must send the notice between one and two months after completion. This additional step incentivizes the contractor to ensure the house is delivered without defects. Contractors should ensure that the written notice to the client is sent by registered mail to avoid disputes about whether the notice was received.

However, the client cannot retain the deposit indefinitely. If they wish to retain the deposit beyond the three-month period, they must meet the requirements of Article 6:262 of the Civil Code. There must be shortcomings on the contractor's part significant enough to justify holding the funds in the deposit, and there should be a balance between the severity of the shortcomings and the amount retained (proportionality).

A final change in the new rule concerns the requirements for alternative security. In practice, instead of the deposit amount, a bank guarantee might be provided after completion as security for any unresolved defects. Previously, the terms of these bank guarantees often offered less security to the client than the deposit or required additional actions from the client. This is no longer allowed. If a contractor wants to offer alternative security, it must be equivalent to the deposit. Legislative history indicates this is the case if the security (in the form of a bank guarantee) is enforceable under the same conditions as the deposit. No additional requirements may be imposed.

In January of this year, our colleague Petra Lindhout, together with Professor Mr. H.J.M. Havekes, wrote an article in the journal Milieu & Recht about the bill to amend the tax system of the water board. The bill stipulates that the financing of tasks related to the water system will take greater account of the benefit principle. The benefit principle is based on the idea that those who gain more advantage from water board activities (which ensure we have dry feet and clean water) pay more. Additionally, the bill includes proposals in the areas of climate adaptation, energy transition, and circular economy and, under certain conditions, makes it possible to finance targeted water supply projects (for example, for farmers).

This bill is currently being discussed in the House of Representatives, where several amendments are being proposed. Therefore, the article serves as a snapshot of the situation. We are closely monitoring developments.

Read the publication here: M en R 2024 2 – The Bill to Amend the Tax System of the Water Board (3)

For questions, you can contact our Environmental Law specialists.

Our colleague Petra Lindhout wrote the following annotation for the journal Milieu & Recht (2024/31) on a ruling by the Court of ’s-Hertogenbosch dated 28 November 2023, which focused on liability for groundwater nuisance resulting from the execution of a construction project. In the annotation (included after the court's ruling), she discusses the municipality's liability for water nuisance and the extent of the municipality's duty of care and investigation in the execution of development projects.

M en R 2024 31 – Higher Groundwater Level Due to Construction Project; Municipality and Developer Liable for Tort.

Due to an amendment to the Civil Code effective from 1 January 2024, the position of clients in construction projects has been strengthened. In our first blog in the series ‘The Position of the Client in Construction Projects,’ we discussed the client’s position in relation to post-completion liability. The second blog in the series addressed the contractor’s financial information obligation. The third blog covered the contractor’s duty to warn and the changes therein.

However, there are more changes that clients and contractors need to consider. In this blog, we focus on the contractor’s obligation to provide a so-called ‘completion dossier’ for the handover.

It is important to note that the completion dossier is not the same as the ‘authority dossier’ that the initiator of a construction project must submit to the (usually) municipality, allowing them to verify that the construction complies with legal standards. The ‘authority dossier’ must include a statement from the quality controller asserting that there is justified confidence that the construction has been built according to legal standards. But what exactly is the ‘completion dossier’?

The Completion Dossier

Article 7:757a of the Civil Code stipulates the obligation of the so-called ‘completion dossier’. The article states:

‘In the case of a construction contract, the contractor must provide the client with a dossier relating to the completed construction at the time of the notification that the work is ready for completion, as referred to in Article 758(1). The dossier must contain data and documents that fully inform the client of the contractor’s compliance with the agreement and the work performed in this regard and must include at least:

• Drawings and calculations related to the completed construction and associated installations, as well as a description of the materials and installations used, and the functions of the construction.
• Data and documents necessary for the use and maintenance of the construction.’

This ‘completion dossier’ is often referred to in practice as the consumer dossier, but this can be misleading. The obligation applies to all construction contracts, not just those with private clients. Therefore, we prefer to call it the completion dossier.

First, it is important to note that this legal requirement for the contractor to provide a completion dossier can be deviated from contractually. There are no restrictions on contractually deviating, even for private clients. Thus, parties are free to make their own agreements about a possible completion dossier and its contents.

Moreover, the obligation to provide a completion dossier only applies to construction contracts. For other types of contracts, such as dry cleaning, this provision does not apply.

If parties have not agreed otherwise contractually, the contractor must provide a completion dossier at the notification that the work is ready for completion. This does not have to be the same moment as the completion itself. The completion dossier must be provided before the completion, as the moment of 'notification that the work is ready for completion' is the reference point.

The regulation further specifies that the completion dossier must include at least the drawings and calculations of the completed construction and associated installations. It must also contain a description of the materials and installations used and the functions of the construction. Finally, the contractor must include data and documents necessary for the use and maintenance of the construction in the completion dossier. The purpose of the legal regulation is to encourage contractors to deliver a defect-free construction and to ensure that clients have relevant information for the use, maintenance, and potential future modifications of the construction. However, providing a completion dossier does not eliminate the contractor’s liability for (hidden) defects. For more information on the contractor’s liability, we refer to our first blog.

As outlined, parties are free to make other or additional agreements about the contents of the completion dossier. The goal of the completion dossier is to provide a ‘complete insight’ into the fulfillment of the construction contract. It is unclear when this is the case. It is possible that the contractor provides the data specified in Article 7:757a BW but still does not provide ‘complete insight into the fulfillment of the agreement’ under the specific circumstances. How this obligation will be practically applied remains unclear and will need to be clarified by case law.

The law does not specify ‘how’ the completion dossier should be provided. This means the contractor can provide a paper dossier or a digital one.

Professional parties often know what information and documentation they expect and make agreements on this, possibly with their legal advisors, when entering into the contract.

For private clients, this may differ. Even the contractors' trade organizations found the legal rule not always clear. At the request of the Ministry of the Interior and Kingdom Relations, a practical guideline (NEN – Dutch Practice Guideline NPR 8092) was developed together with the construction industry and consumer organizations. This guideline can provide support in making agreements to achieve a good completion dossier for private clients. You can find this practical guideline via this link NEN Practice Guideline.

But does a contractor need to provide a completion dossier for a project that started before 1 January 2024? Parties made agreements before the legal regulation took effect. A special transition arrangement has been established for such situations. The completion dossier does not need to be provided for construction contracts concluded before the entry into force of Article 7:757a BW, that is, before 1 January 2024.

If you have any questions or need legal assistance after reading this or the previous blogs in this series, please contact Petra Lindhout or Erwin den Hartog from our office.

A Step Towards a Greener and Healthier Urban Landscape

We are thrilled to share that, with the Green Cables project, we have successfully greened our facade! This project not only enhances the aesthetics of our building but also contributes to a healthier and more sustainable urban environment.

Benefits of a Green Facade

By greening our facade, we achieve several important benefits:

• Improved Air Quality: The plants on our facade help filter pollutants from the air and produce oxygen, resulting in healthier air quality around our building.
• Reduction of Heat Stress: Green facades absorb less heat than traditional building materials. This means they help lower the temperature in the immediate surroundings, which is particularly beneficial during hot periods.
• Enhancement of the Urban Landscape: Our green facade contributes to a more beautiful and attractive streetscape, positively affecting the mood of both passersby and our employees.

Native Climbing Plants: Sustainable and Biodiverse

We specifically chose native climbing plants. These plants are perfectly adapted to our local climate and soil, meaning they require less maintenance and are more resistant to diseases. Additionally, they promote local biodiversity by providing a habitat for native insects and birds.

How We Did It

The realization of our green facade involved several steps:

1. Design and Planning: In collaboration with an experienced landscape architect, we developed a design that is both functional and aesthetically pleasing.
2. Facade Preparation: We installed climbing supports and an efficient irrigation system to give the plants the best start.
3. Planting: We carefully selected native climbing plants, which now cover our facade with lush greenery. Now, they just need to grow!
4. Maintenance and Monitoring: Our gardener, Van der Mee & Jansen Hoveniers, provides regular maintenance and monitoring to ensure the plants remain healthy and can grow optimally.

Our Commitment to Sustainability

This project is an important step in our ongoing commitment to sustainability. We believe that businesses play a crucial role in creating a more sustainable future, and we are determined to do our part. By investing in green infrastructure, we hope to set an example for other companies and organizations. Our next step is installing solar panels.

Thanks to Our Partners!

For this greening project, we were supported by several partners, to whom we express our great appreciation! Thanks to the Province of South Holland (Executive Council) for subsidizing the Green Cables project, Stichting Greendustrie (Hugo Kranenberg), and the Green Business Club Fascinatio (Vincent Dellebeke and Denise Fransen) for their guidance on the project, and De Verticale Tuinman for their quick and professional execution!

Together, we can make a difference and work towards a greener, healthier future for everyone.