When working on energy projects in the Netherlands, you will most likely come across rights of superficies (opstalrechten). They are one of the few rights in rem available in the Netherlands for land structuring and are an often-used instrument to structure the legal relationship between the owner of the land and the owner of the energy project. Rights of superficies in energy projects are mostly seen in one of these types:

• Independent (zelfstandig)
• Lease-dependent (huurafhankelijk)
• Lease-complementary (huuraanvullend)

After reading this contribution, you will know:

• The difference between these types
• When the various types are used
• What is important when seeking out financing
• When a right of superficies can be advised to supplement a lease agreement

Independent rights of superficies

The first type gives a separate, stand-alone entitlement to the land the project is built on. By means of the right of superficies, a separation is created between the ownership of the land and the structure that is being realized as part of the energy project—for example a battery or thermal energy storage system, wind turbine, solar panels or EV chargers. Without this separation, the energy project is likely to lose their ownership on the structure due to the legal rules of accession (natrekking) that make the landowner entitled to any structures erected on the land that are there to stay. The right could be established indefinitely or for a set period. In the superficies conditions, the landowner and the energy project can make legal arrangements on a wide range of topics, including:

• The remuneration
• The designated use
• The division of costs and responsibilities
• The access to the energy project
• The obligation to insure the project
• The sharing (or not) of the electricity connection
• What happens when the right terminates

When financing is sought by the project, the right of superficies can be used as collateral. In this event, it is key that the superficies conditions include arrangements protecting the holder of a mortgage right. For example, a mortgagee needs to be given the possibility to remedy a default in the performance of the superficies conditions – ensuring that the landowner does not exercise its right to unilaterally terminate the right of superficies.

Lease-dependent rights of superficies

The second and third types are seen together with a lease agreement, which is sometimes used when parties want to enjoy the more flexible system of contracting law rather than the potentially rigid system around rights in rem. A lease agreement could also have different tax implications as, for example, it does not trigger real estate transfer tax. It could also be used when the project is smaller in size, which means that the parties involved want to avoid the costs involved with the establishment of a right in rem.

While a lease agreement might be sufficient for structuring energy projects where the principle of accession is not an issue, as there are no structures involved that are intended to remain on the land permanently, the main downside is that it does not prevent such accession. This means that the landowner might become the legal owner of these structures (and become liable for any defects). To prevent this, a lease agreement can be combined with a right of superficies that is dependent on the existence of the lease agreement. When the lease agreement terminates, the right of superficies ends as well. When the lease agreement is transferred to a third party, that party automatically acquired the right of superficies as well.

Lease-complementary rights of superficies

While the connection between the lease agreement might be interesting, it comes with a significant downside: A lease-dependent right of superficies cannot be encumbered with a mortgage right. This means that financing an energy project structured this way is next to impossible. Because of this, a third type of right of superficies has made its appearance: the lease-complementary right of superficies. This type combines the best of both worlds of the first two types: It creates a separate legal relationship prohibiting accession, and it can act as collateral for financing—next to the flexibility of a lease agreement. While this type does not end automatically when the lease agreement ends, termination rights can be included in the superficies conditions that can be invoked upon termination of the lease agreement.

Rights of superficies are used for legal structuring in many forms, which can mostly be classified as one of the above three types. At Dentons, we are familiar with all types and assist with establishing rights of superficies and reviewing them as part of a legal DD daily.

Bas Legger and Ines van Dijk