In the Netherlands, one of the main forms of in rem security rights is the right of mortgage, which can only be established by a notarial deed of mortgage, which should be executed by a civil law notary and registered in the relevant public registry. Once default occurs and any contractual conditions precedent are satisfied, the secured party may proceed with enforcement. Set out below are the three foreclosure processes: public auction, private sale and consensual sale.

Public Auction

A public auction before a civil law notary is the default method for the enforcement of a mortgage right. In this scenario, the security rights must be enforceable as a result of a payment default. In the event of an extension of the credit agreement or standstill, this is not the case.

• The mortgagee is obliged to initiate the execution by giving notice thereof to the mortgagor, the borrower, and those whose rights or attachments are registered and whose rights will be extinguished or terminated by the execution sale.
• The public auction itself will take place on a date as set by the notary. This auction date is set by the notary within 14 days after their appointment. The auction date will be determined on the basis of the type of property, relevant circumstances, etc.
• No sale is permissible without an advance announcement of an auction. The auction must be announced at least 30 days in advance on an official auction website. The announcement will include details about the property, such as valuation, occupancy status and any rental agreements.
• The creditor (eg, the lender) often retains a right of consideration, meaning they can decide within one to two days after the auction whether to accept the bid and award the property to the buyer.
• The award (gunning) is recorded by the notary, who will also prepare the documentation for the settlement. The costs, levies and deposit must be paid within five working days after the auction. The purchase price must be paid no later than four to six weeks after the award. The notary will then make payments based on the final settlement statement. The amount received by the auctioning party is deducted from the outstanding claim; any shortfall is administratively converted into a residual claim. This residual claim is communicated to the borrower by letter.

Private Sale

It is, however, possible to deviate from public auction and sell the registered asset in a private sale. A private sale is more common, as it usually generates higher proceeds than a public auction. A private sale can only be initiated by the mortgagor, the mortgagee or the creditor that levied execution attachment(s). In order to initiate a private sale, it is mandatory to have first started with the process of a public auction. This private sale is subsequently initiated as follows:

• A private offer can be submitted to the notary up to 14 days before the auction date. If accepted, the offer must be approved by the court in summary proceedings. The public auction will be put on hold.
• The request for approval of the private offer must be submitted no later than seven days before the auction date with the competent court in summary proceedings.
• Summary proceedings may be initiated with a minimum term for service of court documents of seven days (in exceptional urgent circumstances, this term can be shortened).
• The hearing on the approval of the private offer will be planned within six weeks after the request thereto, depending on the urgency and availability of the court. During this hearing, the owner of the property and other interested parties such as tenants are heard by the court. In the context of maximising proceeds, interested parties are permitted to submit a higher bid and present it to the court.
• The court may, at its discretion, approve the request. Judgment will be rendered either orally during the hearing or in writing within two weeks after the hearing. The judgment is final and cannot be appealed.

Consensual Sale

As a sale via public auction or private sale, if not performed with sufficient preparation and not in co-operation with the borrower, may negatively affect the proceeds, the mortgagee may choose not to enforce its right, but instead agree with the mortgagor that the latter will sell the property free of mortgage rights and that the proceeds will be allocated to the mortgagee in the form of a consensual sale. In this scenario, a payment default is not required. This scenario requires consent of all parties involved.

In the Netherlands, shares in a company can be pledged as security and can be enforced if the debtor defaults on its payment obligations, with enforcement generally being non-judicial in nature.

• The default enforcement method is a public auction under the DCC, which does not require court involvement.
• However, the parties may opt for a private sale, which requires prior approval from the preliminary relief judge.
• The pledgee is also able to request “appropriation” (verblijf) of the pledged shares. Appropriation allows the pledgee to retain the shares instead of selling them, but this requires prior approval from the preliminary relief judge, who determines the value or the method of valuation for the appropriation.
• Deviating from public auction is also possible by an agreement between the pledgor and pledgee after the right of pledge has become enforceable. In this case, no prior approval from the preliminary relief judge is required.

The process typically involves notification to the pledgor and, in the case of registered shares, the company, followed by sale of the shares and application of the proceeds to the secured obligations. While enforcement is primarily non-judicial, judicial involvement may arise only where a private sale is desired without post-default mutual agreement.

In the Netherlands, non-judicial enforcement of a mortgage or pledge requires formal notice to ensure that the debtor and other interested parties are informed.

• For mortgages, the mortgagee must notify the mortgagor, borrower and any registered right holders at least 14 days before initiating enforcement, and a public auction must be announced at least 30 days in advance on an official auction website. Notice is typically served by a bailiff, with detailed information about the property and auction conditions.
• For pledged shares, the pledgee must give written notice to the debtor, the pledgor and any subordinate right holders specifying the place, time and manner of sale, as well as the redemption price, at least three calendar days before the sale. Although the law provides no detailed rules on further publicity for a public auction of non-listed shares, case law requires that the notice period and advertising be sufficient to ensure a genuinely public sale and to enable value-maximising bids; very short timelines or minimal publication have been held inadequate. As no prior judicial review is required, the supervising bailiff or notary must verify compliance with these requirements and, in case of doubt about enforcement entitlement or the adequacy of notice, must refuse to act and seek court intervention.

Under Dutch law, a borrower does not have a statutory right of redemption once a foreclosure sale has been completed. The borrower may only avert a foreclosure prior to the public auction or private sale by (i) curing the default by paying all outstanding amounts owed to the mortgagee, (ii) entering into a standstill arrangement, payment plan or other restructuring agreement with the mortgagee or (iii) initiating summary proceedings seeking suspension or postponement of the foreclosure process.

A lender may simultaneously enforce multiple security interests and pursue other claims, provided such actions are permitted under the relevant security documents. This includes enforcing a pledge over the shares in the mortgagor or pursuing other claims against the borrower or its affiliates concurrently with a foreclosure.

A foreclosure conducted by way of a public auction generally takes approximately two months, whereas a private sale generally requires four to five months to complete. A consensual sale is usually faster and can typically be completed within one to two months.

If the proceeds of a foreclosure sale are insufficient to cover the secured debt, the deficiency equals the outstanding amount of the borrower’s obligations (including accrued interest, fees and foreclosure costs) minus the net foreclosure proceeds. The remaining debt constitutes an unsecured claim, which the lender may seek to recover by exercising any rights or remedies available to unsecured creditors under applicable law.

In the Netherlands, the form of entity most often used to facilitate real estate joint ventures is the besloten vennootschap (BV), sometimes also used in a so-called CV/BV structure where the silent partners (CV) only contribute financially (by acting otherwise, their protected position – not being liable – may switch to full exposure).

Joint venture or operating agreements generally require co-operation between partners in a real estate joint venture, but one may deviate.

In Dutch real estate joint ventures that use a BV or NV, participants owe a foundational duty to act towards the company and one another in accordance with reasonableness and fairness (redelijkheid en billijkheid). This standard applies across the corporate organs and to those involved by law or the articles of association, including shareholders and directors, and functions both as a guide to behaviour and as a corrective to formalistic reliance on corporate rules where that would be unacceptable in the circumstances. Contractual governance will usually reinforce this through the implied and limiting effects of reasonableness and fairness on the joint venture documentation, shaping how rights may be exercised and how omissions are judged.

Dutch Supreme Court case law in joint venture settings highlights that in “equality” or 50:50 ventures, the intended equilibrium between partners may entail heightened expectations of due care, consultation and notification to prevent one party from undermining the balance. Alongside these corporate and contractual norms, the general tort regime (onrechtmatige daad) constrains conduct that breaches statutory duties or unwritten standards of proper social conduct and causes loss. This is in line with the Cancun ruling, which stipulates that directors of a joint venture have an increased duty of care towards shareholders. They must act in the interests of the company, but in doing so must take particular care with regard to the interests of (minority) shareholders, specifically in situations involving dilution and the provision of information.

Where the joint venture is structured as a partnership or limited partnership (maatschap/VOF/CV), the relationship is primarily contractual and governed by statutory partnership rules; questions of authority and liability typically dominate, and “shareholder-style” fiduciary analysis gives way to the agreed partnership framework and general tort principles.

Remedies in the Event of Violation

When governance decisions stray beyond what the law or the articles of association allow, corporate resolutions can be null (of no effect) or voidable by the court. Nullity applies to resolutions contrary to law or the articles of association, subject to statutory exceptions and possible ratification of certain defects, while voidability can be pursued where adoption conflicts with decision-making rules, with reasonableness and fairness, or with internal regulations; annulment is sought before the district court within the statutory time limits. Even then, third-party protection may curtail invocation against counterparties who were (and should have been) unaware of the defect, reflecting the system’s concern for transactional certainty.

Beyond setting-aside decisions, parties frequently seek interim relief (kort geding) to compel compliance with the articles of association or restrain voting or execution steps pending judgment on the merits. Such proceedings are commonly paired with arguments from nullity, voidability, and reasonableness and fairness, and may be accompanied by damages claims where the facts support tortious liability. In more structural disputes, the Enterprise Chamber (Ondernemingskamer) offers specialist shareholder owner remedies. The inquiry procedure (enquêteprocedure) can address mismanagement or governance breakdowns and unlock targeted measures, and the statutory dispute resolution mechanism (geschillenregeling) allows shareholders holding (alone or jointly) at least one-third of all shares in qualifying BVs and “closed” NVs to decide that a harmful shareholder must transfer its shares (squeeze-out/uitstoting). This is often a more effective end game than damages where the joint venture relationship has irretrievably broken down; the downside is that it can take quite some time before the procedure is finished.

Where governing documents are silent or vague, or produce stalemate, the Enterprise Chamber focuses on whether there are well-founded reasons to doubt a proper policy or proper course of affairs. The procedure is designed to restore balance and functionality rather than to award money and proceeds in two phases: first, the court decides whether to order an investigation, and second, it determines definitive measures in light of the investigators’ report. Importantly, the court can order immediate measures (onmiddellijke voorzieningen) at any stage, even before an investigation is ordered, if the state of the company or the interests of the investigation so require.

The toolkit used to break deadlock is practical and often decisive in 50:50 real estate ventures: the court may appoint an independent director with a casting vote or representation powers, suspend sitting directors, or otherwise stabilise governance to allow the company to function. Dutch commentary recognises that these provisional measures may depart from the articles of association where proportionate and temporary, reflecting the court’s mandate to resolve dysfunction swiftly. Standing thresholds for shareholders are statutory (commonly 10% in practice for smaller entities), and it is typical to raise written objections before filing; the articles of association and agreements can expand who has standing, so bespoke drafting remains influential on access to the remedy.

Provisions in shareholder agreements or corporate articles allowing for the “automatic entry of judgment” upon certain occurrences (such as a breach or a default event) are generally not directly enforceable in the Netherlands in the same way they might be in common law jurisdictions.

Under Dutch law, the enforcement of a judgment (which should be an adversial judgment) requires judicial authorisation (an exequatur for foreign judgments) or a court-ordered judgment (for domestic matters).

Under Dutch corporate and procedural law, provisions in a contract (such as a shareholders’ agreement) that purport to allow for the automatic entry of an injunction or other provisional remedies are not enforceable.

While Dutch law provides extensive freedom of contract, it does not allow private parties to contractually bypass the court’s role in issuing judicial orders or to predetermine a court’s assessment of urgency and necessity.

Dissolution (ontbinding) ends the joint venture’s life and is typically followed by liquidation (vereffening) where assets or liabilities remain. In the absence of a designated liquidator, directors often act by default, preparing a distribution plan and navigating creditor protection mechanics, including opportunities for objections. In real estate joint ventures, care is needed with “turbo liquidation” (dissolution without liquidation when there are no known assets) because contingent positions are common: warranty and tax exposures, latent defects, service charge reconciliations and ongoing claims can all persist. Using turbo liquidation in the face of such contingencies invites challenge and allegations of impropriety and may, in practice, prompt inquiry or dispute proceedings that are more costly than an orderly liquidation.

For BVs, shareholder distributions are constrained by statutory tests, commonly summarised as preserving mandatory reserves and solvency, subject to board approval, with potential director liability where approval was given imprudently. Shareholders who received distributions while knowing or reasonably foreseeing that the BV could not pay due debts can be required to compensate the shortfall, aligning the end game with creditor protection. In short, a joint venture wind-down should prioritise transparent balance-sheet housekeeping, realistic provisioning for contingent items and a distribution process that can withstand judicial scrutiny, particularly where relations between partners have been strained.

What we see generally is that although lenders sometimes seek to obtain sponsor or parent guarantees, sponsors often manage to avoid having to grant a sponsor guarantee to support the financing of a real estate portfolio. In our experience, in smaller credits, sponsor guarantees and suretyships are more common. Depending on the real estate financing, sponsor or parent guarantees can take different forms including full or limited recourse, principal payment and interest payment. Completion guarantees are more common in real estate development and are often demanded by financing banks. Cost overrun guarantees and standby letters of credit are also common in real estate development financings.

Unlike suretyships, there is no concept of guarantee under Dutch law. Therefore, Dutch contract law generally applies to guarantees, including the principle of freedom of contract, which enables tailoring the relevant guarantee to the specific needs of the client.

In Dutch practice, a completion guarantee (afbouwgarantie) is a contractual or insurance‑based arrangement under which a third party ensures that a construction project will be completed if the contractor fails due to, for example, insolvency or other inability to perform. Residential examples include the well‑known Woningborg and SWK schemes, which provide insured completion protection for new‑build housing projects.

Regardless of the specific guarantee, the following elements are usually central:

• A claim requires the occurrence of a defined trigger – typically insolvency or non-performance of the contractor.
• Once the trigger occurs, the guarantor must either arrange completion or pay compensation covering the extra costs needed to complete the project.
• All completion guarantees contain procedural conditions, such as timely notice, co-operation with investigations, and provision of necessary documents.

Completion guarantees in the Dutch market are typically not unconditional or on-demand guarantees. Schemes such as Woningborg and SWK are conditional, insurance-based mechanisms tied to specific triggers and regulated conditions. Even commercial completion guarantees (outside housing) are generally structured as conditional performance undertakings, not immediate-payment instruments. Coverage and obligations are always limited to what the guarantee text explicitly provides, including exclusions, caps and technical criteria. Thus, they lack the “pay first, argue later” nature of a bank’s on-demand guarantee.

In general Dutch practice, completion guarantees are conditional instruments, meaning performance hinges on satisfaction of the guarantee terms, not on waived defences. Waivers – common in bank guarantees – do not form part of the structure of completion guarantees.

Dutch law provides a well-developed system of summary proceedings (kort geding), which constitutes the primary expedited judicial mechanism for urgent civil matters – including disputes relating to the enforcement of guarantees.

There are no identified statutory restrictions preventing a lender from enforcing a guarantee while also pursuing remedies under the primary agreement.

In the construction sector, arbitration is standard practice rather than an exception. The Arbitration Board for the Building Industry (RvA) handles over 600 cases annually and operates with a panel of more than 100 arbitrators. Of these, approximately 80 have a technical construction background, while the remaining 20 are legally qualified, almost all with prior experience in the judiciary. (Source: https://www.raadvanarbitrage.nl/)

By contrast, arbitration clauses are not commonly used in Dutch real estate transactions outside the construction sphere. Sale and purchase agreements and leases typically rely on the state courts, meaning arbitration is generally limited to complex, bespoke or cross‑border transactions where parties specifically value specialist expertise, multi‑jurisdictional enforceability and enhanced privacy.

When addressing disputes arising from real estate transactions, it is essential to assess the relative merits of arbitration versus court proceedings. A key advantage of arbitration is the ability to appoint decision-makers with specific sector expertise, whether in construction, valuation, technical matters or post-M&A issues, ensuring that the tribunal understands the commercial and technical context of the dispute. Arbitration may also offer procedural flexibility, enhanced privacy, and reduced exposure to public scrutiny. In many cases, it is faster: for example, arbitration on the merits at the Netherlands Arbitration Institute has an average duration of approximately nine months (2021), whereas comparable court proceedings may take around two years per instance (Source: https://nai.nl/). Arbitral awards are also widely enforceable under the New York Convention.

However, arbitration also has its disadvantages. Establishing the procedural framework and progressing through each phase can be time-consuming, and confidentiality is not absolute, particularly where parties seek to enforce or set aside an award before national courts, and as an increasing number of awards are being published. Although arbitral awards enjoy broad international enforceability, enforcement almost invariably requires court involvement, which may result in parallel litigation. Arbitration also incurs costs that do not arise in state court proceedings, including arbitrators’ fees and institutional administrative charges, which can be significant, especially when leading institutions or multi-member tribunals are involved. In addition, arbitral tribunals may order the losing party to reimburse the prevailing party’s full actual legal costs, whereas Dutch courts typically award only limited fixed costs under a points-based system. Technological infrastructure remains uneven across institutions, with few offering fully electronic filing. Finally, there is generally no appeal mechanism against arbitral awards. In the Netherlands, an award can only be set aside in narrowly defined circumstances, such as an invalid arbitration agreement, a violation of public policy, improper tribunal composition, or an award that fails to state the grounds for the decision.

Mediation is a process in which a neutral mediator helps parties explore solutions and reach their own agreement, rather than handing decision‑making authority to a judge or arbitrator. It is based on self‑determination, voluntary participation and confidentiality.

The use of mediation in the Netherlands continues to grow, reflecting a broader shift towards more collaborative and efficient methods of dispute resolution. According to recent research (2023), 57% of companies viewed mediation as the most effective way to resolve disputes, followed by 41% who preferred a combination of mediation with court proceedings or arbitration. Notably, none of the surveyed companies considered arbitration effective, and only 2% selected court proceedings. Among lawyers, 44% identified a combined mediation/court or mediation/arbitration path as most effective, while 42% chose mediation alone; again, none identified arbitration as effective, and 15% preferred court litigation. (Source: M.A. Simon Thomas, E. Schutte, M. Schonewille & O. Korneeva, PBM Vervolgonderzoek naar kansen en belemmeringen voor zakelijke mediation, Utrecht, April 2024, p71)

Real estate sector‑specific data on mediation usage is not available. Based on practice experience, mediation does occur in real estate transactions, most commonly in joint‑venture disagreements, shareholder conflicts and governance‑related disputes. However, its use remains relatively limited when compared with construction matters (where both mediation and arbitration are common), corporate/commercial disputes, and employment or family cases. According to the MfN Register, there are 354 mediators active in the fields of construction, real estate and leasing. (Source: https://mfnregister.nl/)

A recent Supreme Court judgment, ECLI:NL:HR:2024:1078, confirmed that a mediation clause can impose a binding obligation on parties to attempt mediation before commencing litigation or arbitration, albeit without compelling them to reach a settlement. The Court emphasised that parties may be required to participate sincerely and constructively, but cannot be forced into agreement. Importantly, the Court held that enforceable mediation clauses remain compatible with the right of access to the courts under Article 6 of the European Convention on Human Rights. Overall, the ruling underscores the Dutch legal system’s support for mediation as an efficient and co-operative step within the dispute resolution process, while preserving parties’ unrestricted access to formal remedies where mediation does not yield a resolution.

Dutch law provides a wide range of provisional remedies (voorlopige voorzieningen) that can be obtained swiftly through summary proceedings (kort geding). These measures play an important role in real estate disputes, where delay can significantly affect property rights, commercial operations or the preservation of value. Measures can include, among others:

1. Preliminary Injunctions

The primary provisional remedies are preliminary injunctions, which may take two forms:

• Mandatory injunction (gebod in kort geding): orders the opposing party to take immediate action.
• Prohibitory injunction (verbod in kort geding): orders the opposing party to refrain from certain conduct.

Both forms may be reinforced with a penalty (dwangsom) to ensure compliance.

2. Conservatory Attachment (conservatoir beslag)

Procedural law allows creditors to obtain conservatory attachment on real estate or other assets to secure recovery while litigation is ongoing.

3. Suspension of Execution or Eviction

A party may request a provisional order suspending execution of contractual rights – for example, temporarily stopping an eviction or preventing the enforcement of a disputed lease termination – until the court rules in main proceedings. These forms of interim relief are part of the “short-term measures” available in preliminary relief proceedings.

To obtain a provisional remedy (voorlopige voorziening) in the Netherlands, a party must follow the summary proceedings (kort geding) procedure. Dutch law imposes several well-defined requirements for such relief, and a court order is always required – provisional remedies cannot be obtained without judicial intervention.

• Urgency (spoedeisend belang): The applicant must demonstrate a pressing and immediate need for judicial intervention – meaning that waiting for a full merits case (bodemprocedure) would cause unacceptable or irreparable harm.
• A sufficiently plausible underlying right: Summary proceedings are not full trials. The applicant must show that their claim has a reasonable prospect of success on the merits – a standard sometimes referred to as “sufficient plausibility” or a prima facie case.
• The requested remedy must be suitable as provisional relief: The court will consider whether the requested measure is appropriate, proportionate and reversible, or at least consistent with the provisional nature of summary proceedings.
• Balancing of interests: The provisional relief judge weighs the interests of both parties, considering:
1. the harm to the applicant if relief is denied; and
2. the harm to the respondent if relief is granted.

The use of provisional remedies (voorlopige voorzieningen) in the Netherlands is subject to strict judicial safeguards. When a party seeks such relief improperly, several legal and practical risks may arise:

• Risk of denial due to lack of urgency, complexity or insufficient evidentiary basis: Dutch courts require a demonstrable urgent interest (spoedeisend belang) to grant provisional measures. If the applicant fails to show genuine urgency – or if urgency has been undermined by delay – the court will deny the remedy outright. In addition, because the standard is one of plausibility, applications that lack sufficient documentation also risk failure. This may leave the applicant without protection and weaken their position in subsequent proceedings.
• Exposure to adverse cost orders: While Dutch courts apply modest cost awards, an unsuccessful or improperly motivated application may still result in the applicant being ordered to pay the respondent’s legal costs, including costs associated with emergency preparation. This is especially likely when the court finds the claim unnecessary, poorly substantiated, or strategic rather than substantive.
• Risk of strategic backfire in later proceedings: Because provisional relief decisions are provisional but influential in practice, an improperly sought remedy may damage the applicant’s credibility in later merits proceedings. Judges frequently consider the history of the dispute, including whether a party misused emergency mechanisms.

Dutch courts are highly willing to issue temporary or preliminary injunctions (voorlopige voorzieningen) in real estate-related disputes. The summary proceedings (kort geding) system is specifically designed to provide swift interim relief in urgent civil matters, including those involving property rights, lease enforcement, construction issues and transactional conflicts. The provisional relief judge (voorzieningenrechter) weighs the urgency, the likelihood of success of the claim and the balance of interests, and if satisfied, will issue the requested temporary measure.

To obtain a provisional remedy in Dutch summary proceedings (kort geding), a party must demonstrate not only urgency but also that the matter involves harm that cannot be adequately repaired if relief is denied. Dutch courts do not always use the phrase “irreparable harm” explicitly, but the concept is embedded in the requirements of urgency, proportionality and the need for immediate relief. The primary way to prove irreparable harm is to show that waiting for a full merits case (bodemprocedure) would leave the applicant with a loss that cannot be remedied later – whether because the damage is irreversible or because delayed relief would deprive any eventual judgment of practical value.

Under Dutch law, contractors cannot place a mechanic’s lien on real property in the sense used in common law jurisdictions. There is no statutory mechanic’s lien regime that automatically attaches to the property itself.

Dutch law does recognise the right of retention (retentierecht), which gives a contractor a powerful, self-executing right to withhold possession of work, materials or the construction site until payment is made – and this does not require a court order.

A contractor may invoke this right if several statutory conditions are met:

• the claim for payment must be due and payable;
• the non-payment must relate directly to the work performed; and
• the contractor must have actual control over the object (eg, keys or physical access control).

The contractor must also explicitly declare that the right of retention is being exercised – often by securing the site and adding notice signage. This right is recognised and enforceable against the client, and under certain conditions also against third parties.

Thus, while Dutch law does not permit unilateral registration of a lien against real estate, a contractor can exercise a right of retention without court approval, functioning as a powerful payment pressure tool.

With respect to tax, the following regulations could be relevant relating to purchases and management of residential units. The transfer of new-build residential properties is subject to VAT (21%). Existing residential properties are in principle VAT exempt, unless it qualifies as new construction. If VAT is exempt, investors should in principle instead pay real estate transfer tax (RETT). The standard RETT rate for investors is 10.4%, and 8% for residential properties. This applies to all residential acquisitions not intended for owner-occupation. There are various exemptions from RETT – for example, in relation to internal reorganisations. The leasing of residential property is exempt from VAT. Investors often acquire newly built residential assets through share deals (buying shares in a property-holding company), which could have certain tax benefits. It is advisable to carefully consider the tax structuring.

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