Circular economy and real estate: alternatives for operational lease

Abstract

The concept that suppliers retain ownership of building products and the materials encapsulated within these products and that their customers ‘only’ pay for services is a paradigm in Circular Economy. However in many legal systems, elements incorporated in a building such as the facade or the roof, or equipment in a plant, are seen as fixtures and therefore considered to be a part of real estate. Therefore ensuring multi-cyclic behaviour within the so-called technical loop of CE is not evident. At the moment the challenges of property law concerning CE, real estate and operational lease are hardly discussed within the literature. This paper explores the concept of service providing related to operational lease for real estate, with a focus on Dutch property law, illustrated by legal case studies. The paper ends with some conclusions that offer first guidelines for alternative implementations of the operational lease concept, taking into account the CE ambitions to reduce the extraction of the amount of raw materials.