Landlord vs. Non-Paying Tenant: What are the Limits of the Retention Right?
When a tenant stops paying rent, the landlord often looks for a quick and effective way to secure its claim. If equipment, goods, or technical devices remain in the leased premises, the solution may seem straightforward: retain the items and increase pressure on the tenant to pay the debt.
But this is precisely where caution is needed.
In a recent decision, Case No. 26 Cdo 2057/2025, the Supreme Court noted that a landlord’s right of retention is not unlimited. Not everything located in the leased premises can automatically be used as a form of “security” for unpaid rent.
Key Message for Landlords
What matters is not only where the item is located, but above all who the owner is.
A landlord may find itself in a difficult position, particularly where the premises contain items that the tenant merely uses but does not own. In practice, these may include suppliers’ equipment, leased items, borrowed technical devices, third-party goods, or customers’ property.
If such an item does not belong to the tenant, retaining it may be problematic.
Does the Landlord Have to Verify Everything in Advance?
The Supreme Court does not require the landlord to carry out extensive verification of ownership of every single item before exercising the right of retention. However, this does not mean that the landlord may proceed blindly.
The landlord should pay attention to whether the circumstances suggest that an item may belong to someone else. This may typically include markings on the item, service labels, supplier equipment, leasing documentation, or other indications pointing to ownership by a third party.
In other words: the landlord does not need to resolve everything in advance, but caution must already be exercised when the retention right is applied.
Who Must Prove That the Item Does Not Belong to the Tenant?
In practice, it may generally be assumed that items located in the leased premises belong to the tenant. However, if a third party claims that an item belongs to them, they must prove their ownership.
Once they do so, the landlord’s position changes. It is not enough for the landlord to say that it acted in good faith and believed that the item belonged to the tenant. When retaining items, the landlord acts at its own risk.
Why Does This Matter?
Because a reckless approach can turn an initially strong negotiating position into an unnecessary dispute.
The landlord may then have to deal not only with the tenant’s debt, but also with a third party’s claim for the return of the item, or with other related claims. In businesses where third-party equipment, technology, or goods are commonly used, this risk is not theoretical. It is very real.
What Do We Recommend?
The right of retention can be a useful tool. However, it should not be the landlord’s only form of protection.
In lease relationships, it is advisable to consider in advance in particular:
- what items may be present in the premises and who may own them,
- whether the lease agreement addresses third-party items,
- whether the tenant is obliged to inform the landlord about such items,
- how to carry out and document the retention of items, particularly with regard to their condition and any damage.
- what other security instruments are available to the landlord,
- who will respond, and how, if a third party claims ownership of a retained item.