Business people in an office

Page 5. “Property and Environment in Denmark


Land  and  property  can  be  either  leased  or  owned according to Danish law. The statutes applicable to leases and purchases of land and property are generally made to protect respectively the lessee or the purchaser of land and property.

The operations of a business may be subject to environmental laws regarding pollution and hazardous  substances. In some cases, environmental legislation  would require the said business to notify the relevant  governmental  body  or  ensuring  that  relevant  permits or licences are obtained.

Lease of premises

Several rules regarding lease agreements are mandatory and are generally made to protect the lessee.

A  lease  agreement  does  not  have  to  be  in  writing, unless the lessee or the landlord so wishes. A lease agreement may be entered for either a specified or unspecified  term.  Extensive  lease  agreements  are common. No written notice of termination is necessary for a lease agreement in the case of a specified lease term.

Purchase of land and property

Purchase of land in Denmark is fairly simple compared to other countries. Information on all properties, including the owner’s identity, is kept digitally in the Land Registry by the courts.

The  agreement  shall  contain  the  purchase  price, identification  of  the  land,  name  of  the  purchaser and the seller and a declaration of transfer from the seller to the purchaser. The purchaser shall register the purchase in the official Land Registry and pay stamp duty. Registration can now be made online.

The right to purchase property in Denmark is based on certain conditions. A purchaser of property must be a resident in Denmark for at least 5 years. If this condition is not met – approval from the Justice Department  is  required.  When  purchasing  vacation homes, the approval is stricter since the buyer shall assert that he is especially connected to Denmark.

There  are  some  leniency  terms  for  residents  and companies that reside within the EU and EEA countries,  given  that  approval  from  the  Justice  Department is not required.

Seller’s obligations

If  the  purchased  land  would  fail  to  meet  expectations  or  the  terms  of  the  purchase  agreement,  the purchaser  shall  be  entitled  to  a  reduction  of  the purchase price or to terminate the agreement. The purchaser shall notify the seller of any such claim as soon as possible upon noticing the fault, within a reasonable period during which he should have noticed the fault, although always within 20 years after obtaining access to the property.

The  rights  of  the  purchaser  may  appear  generous, however, in practice a purchaser can not make any claim for faults he should have noticed on any reasonable inspection of the property prior to the purchase. The  obligation  to  inspect  would  be  onerous and purchasers therefore generally use the services of a construction or building inspector to carry out the inspection.

Environmental law

The  most  important  statutes  on  the  environment are  included  in  the  Danish  Environmental  Protection Act of 1973 (Miljøbeskyttelsesloven), the Danish Environmental  Liabilities Act  of  1994  (Miljøerstatningsloven) and the Contaminated Soil Act of 2001 (Jordforureningsloven), which to a great extent are enforced  through  licensing  requirements  as  far  as hazardous environmental activities are concerned.

Acquisition of a licence

Some polluting activities require a licence. Even if a licence is not required by law, there may be an advantage in voluntarily applying for one. As long as the licence is valid, the operator is, in principle, entitled to operate a business according to the licence provisions. This means that the operator may, as a rule,  rely  on  the  provisions  of  the  Environmental  Protection Act  concerning  protective  measures  (cf. next paragraph).

Standard provisions

The above-mentioned acts impose standard provisions  on  protective  measures.  Every  operator  of  a polluting  or  otherwise  environmentally  hazardous activity must comply with those provisions, whether or not the activity requires a permit.

The issue of liability for damages caused by pollution can be divided into three periods:

  1. Pollution before 1 January 2001

According to the Environmental Protection Act and  the  appurtenant  set  of  rules,  liability  is, as  the  main  rule,  to  be  based  on  fault.  Generally speaking, this means that in the event of a company’s violation of a rule or non-compliance with an enforcement/prohibition notice or failure to observe normal duty of care, the company may be held liable for damages caused by pollution.

  1. Pollution after 1 July 1994

If  the  pollution  is  related  to  companies  bound for  authorisation  and  listed  in  a  separate  annex  to  the  Environmental  Protection  Act,  the Act provides a statutory objective basis for the establishment of liability for damages – i.e. notwithstanding  any  fault  –  which  applies  to  environmental  authorities,  neighbours  and  other injured parties.

It should be noted that the Environmental Protection Act  only  applies  to  the  companies  and activities listed in the separate Annex to the Act.

  1. Pollution after 1 January 2001

According to the Contaminated Soil Act, objective  liability  today  applies  to  companies  and public  authorities  notwithstanding  any  fault.

Please  notice,  that  objective  liability  applies to  private  companies  and  public  authorities whereas  liability  in  respect  of  private  persons still relies on fault.

Responsibility upon winding up

The provisions on protective measures continue to apply after the winding up of an operation. This may lead to an obligation to clean up the premises, including contaminated land. As a general rule, however, after a 30-year peiriod claims shall be statutebarred.

Responsibility beyond the operator

The basic principle of “the polluter pays” applies in Denmark  as  in  other  EU  Member  States.  According  to  this  principle,  the  polluter  is  only  liable  for pollution  which  took  place  before  1  January  2001.

However, it is recommended to be extremely careful when taking over a business and/or land on which a polluting activity has been carried out.

According to the Contaminated Soil Act and after 1 January 2001, an enforcement notice on a company in operation is binding on a subsequent operator, if at the time of taking over the company the operator knew  or  should  have  known  that  the  enforcement notice had been served. As a consequence, the subsequent operator is obliged to comply with an enforcement notice or a prohibition notice if he was in bad faith as to the issue of the enforcement notice or prohibition notice.

Furthermore, an enforcement notice may be held in force in respect of subsequent owners of a polluted property subject to the following conditions:

if  the property is a company in operation, i.e. it has not closed down, if  prior to the take-over of the company, notice had been  given  that  an  enforcement  notice  would be served – or an enforcement notice had been served and the enforcement notice had not been complied with, if  the  seller  had  not  complied  with  enforcement notices issued, irrespective of an injunction or a restraining order, if  at the time of taking over the company, the buyer knew or should have known that notice had been given of the issue of an enforcement notice or that an enforcement notice had been issued, and if  the  buyer  has  taken  over  the  company  from someone who was or might become obliged to comply with an enforcement notice.

Page 5. “Property and Environment in Denmark”

Read More. Go to:

  1. Establishing Business in Denmark
  2. Buying a Danish business
  3. Danish business with others
  4. Denmark Employment
  5. Property and Environment in Denmark
  6. Intellectual Property in Denmark
  7. Danish Business Environment
  8. Profit and tax in Denmark
  9. Denmark Company Liquidation
  10. Denmark company formation