Right of retention

Definition

The right of retention (retentierecht) lets a creditor who holds another party property suspend its duty to return it until a connected claim, such as for repair or storage, is paid. There must be sufficient connection between the claim and the obligation to return the item. The right can be invoked against the owner and, in defined circumstances, against third parties and even in bankruptcy, giving it real practical force.

Example

A garage may retain a repaired car until the customer pays the invoice for the repair work.

Why this is a business risk

A creditor who fails to assert the right of retention before returning the asset loses the practical leverage it provides. Once the goods are back in the debtor's possession, recovery depends on legal proceedings rather than the ability to withhold. Wrongful retention, where the connection between the claim and the asset is insufficient, exposes the creditor to a damages claim by the owner.

How to manage it

• Assert the right of retention in writing before returning any item while a connected claim remains outstanding, specifying the claim amount.
• Verify that sufficient connection exists between the retained item and the outstanding claim; retention for an unrelated debt is wrongful.
• Do not use or damage the retained item; the creditor is a custodian and owes a duty of care for the property in their possession.
• Notify the owner clearly in writing that retention is being exercised and the conditions for release.
• If the debtor is declared bankrupt, assert the right of retention immediately against the receiver before any inventory is taken.

Legal references

• BW 3:290 Dutch Civil Code: right of retention Dutch law

Unless marked otherwise, references are to Dutch law (Burgerlijk Wetboek, the Dutch Civil Code); EU instruments such as the GDPR apply across the EU. This is general information, not legal advice. Other jurisdictions treat these concepts differently. Verify the current text and your situation with a qualified lawyer.