B-120286, JUL 12, 1954

B-120286, JUL 12, 1954

PRECIS-UNAVAILABLE

JOSEPH M. MANO, LIEUTENANT COLONEL, FC; DEPARTMENT OF THE ARMY:

REFERENCE IS MADE TO YOUR LETTER OF MAY 6, 1954, FINAE-B 167, TRANSMITTING A VOUCHER IN THE SUM OF $72.22 COVERING THE ARMY AND AIR ATTACHES' SHARE OF INCREASED RENTAL FOR THE FIRST QUARTER OF CALENDAR YEAR 1954 ON OFFICE AND STORAGE SPACE RENTED FROM THE STANDARD AMERICAN PETROLEUM COMPANY, THE HAGUE, NETHERLANDS, BY THE SERVICE ATTACHES. THE INCREASE RESULTS FROM NETHERLANDS GOVERNMENT LEGISLATION EFFECTIVE JANUARY 1, 1954, GRANTING ALL LANDLORDS THE RIGHT TO INCREASE THEIR RENTALS BY A MAXIMUM OF 17 PERCENT. YOU REQUEST ADVICE AS TO THE PROPRIETY OF THE PROPOSED PAYMENT.

THE LEASE UNDER WHICH THE PREMISES IN QUESTION ARE OCCUPIED - ARMY NO. DA 91-260-ID-9, AIR NO. AF-91-260-3, NAVY NO. N61413A-5, DATED JANUARY 1, 1950 - CONTAINS NO PROVISION FOR INCREASING OR DECREASING THE RENTAL STIPULATED THEREIN. HOWEVER, IT IS NOTED THAT AMENDMENT NO. 2 TO THE LEASE, EFFECTIVE JANUARY 1, 1951, INCREASED THE RENTAL FROM 3.02 DUTCH GUILDERS PER SQUARE FOOT OF OFFICE SPACE AND 1.51 DUTCH GUILDERS PER SQUARE FOOT OF STORAGE SPACE, AS PROVIDED BY THE ORIGINAL LEASE, TO 3.403 AND 1.7015 DUTCH GUILDERS, RESPECTIVELY. IT IS INDICATED THAT THIS AMENDMENT WAS MADE IN COMPLIANCE WITH THE NETHERLANDS GOVERNMENT LAW ENTITLED "HUURWET" (RENTAL ACT), DATED OCTOBER 13, 1950, AND PUBLISHED IN THE GOVERNMENT GAZETTE AS LAW NO. K452, WHICH AUTHORIZED A 15 PERCENT INCREASE IN THE BASIC RENTAL ON ALL PROPERTIES IN THE NETHERLANDS EFFECTIVE JANUARY 1, 1951. SUBSEQUENT RENEWALS HAVE BEEN AT THE FIGURE STATED IN SAID AMENDMENT.

THE STATUTE HERE INVOLVED, CITED AS THE ACT OF THE NETHERLANDS PARLIAMENT DATED DECEMBER 24, 1953, GOVERNMENT GAZETTE 580, ROYAL DECREE, DATED DECEMBER 24, 1953, APPEARS TO BE AN AMENDMENT OF LAW NO. K452, SUPRA, AND PROVIDES THAT RENTS EXISTING AS OF DECEMBER 31, 1953, WILL BE INCREASED 17 PERCENT EFFECTIVE JANUARY 1, 1954, UNLESS THE PARTIES MUTUALLY AGREE OTHERWISE. IT IS INDICATED THAT THE LESSOR NOT ONLY REFUSES TO WAIVE THE INCREASE BUT HAS INDICATED THAT IT WILL NOT RENEW THE LEASE IF THE INCREASED RENTAL IS NOT PAID.

GENERALLY THE RIGHTS AND LIABILITIES OF PARTIES TO A LEASE ARE GOVERNED BY THE LAWS OF THE PLACE WHERE THE PREMISES ARE LOCATED AND THE LEASE WAS EXECUTED. SEE 51 C.J.S., LANDLORD AND TENANT, 205, 231; B-55649, FEBRUARY 19, 1946. WHILE THIS MAY NOT NECESSARILY BE TRUE WITH RESPECT TO LEASES EXECUTED IN THE UNITED STATES BY THE UNITED STATES GOVERNMENT FOR PRIVATE PROPERTY LOCATED WITHIN THE UNITED STATES, WHERE STATE LAWS AND REGULATIONS GENERALLY DO NOT AFFECT THE FEDERAL GOVERNMENT BECAUSE OF THE SOVEREIGN IMMUNITY OF THE UNITED STATES, THE CITED PRINCIPLE WOULD APPEAR TO BE APPLICABLE WHERE, AS HERE, THE LEASE WAS EXECUTED AND THE PRIVATE PROPERTY INVOLVED IS IN A FOREIGN COUNTRY WHERE THE SOVEREIGNTY OF THE UNITED STATES GOVERNMENT DOES NOT EXTEND.

MOREOVER, THERE CAN BE LITTLE DOUBT THAT, IF THE MATTER WERE PLACED IN ISSUE IN A NETHERLANDS COURT, THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THE LEASE WOULD BE DETERMINED UNDER THE CITED LAW AND THE COURT WOULD SUSTAIN THE RIGHT OF THE LESSOR TO THE INCREASED RENTAL PROVIDED THEREBY.

ACCORDINGLY, THIS OFFICE WILL NOT OBJECT TO COMPLIANCE WITH EITHER THE ACT HERE IN QUESTION OR ITS PREDECESSOR LAW, NO. K452, UNDER WHICH THE RENTAL SPECIFIED IN THE ORIGINAL LEASE PREVIOUSLY WAS INCREASED. PAYMENT MAY BE MADE ON THE VOUCHER, WHICH, TOGETHER WITH THE SUPPORTING PAPERS, IS RETURNED HEREWITH.