Rent protection

When you rent an accommodation in the Netherlands, you are automatically entitled to rent protection. The same applies to your co-tenants and subtenants. In principle, rent protection comprises two aspects: rental price protection and rent protection against termination of the tenancy agreement in the sense that the landlord cannot simply terminate the tenancy agreement. While both aspects of rent protection apply to the tenants of social housing, this is not the case for the tenants of housing in the free sector. Which rental protection is at issue when and what exactly the rental price protection or rental protection in the context of lease termination entails, are discussed in this blog. But first, this blog discusses the condition named living space for the overall application of tenancy protection.

Living space

For the application of the legal provisions regarding rent protection, it must first be a question of living space. According to Article 7:233 of the Dutch Civil Code, living space must be understood to mean a built immovable property insofar as it is rented out as an independent or non-self-contained house, a caravan or a stand intended for permanent residence. No further distinction is thus made between tenants of independent or non-self-contained accommodation for the purposes of rent protection.

The concept of living space also includes immovable appurtenances, in other words facilities that by their nature are inextricably linked to the home, caravan or pitch or that are part of it by virtue of the rental agreement. In a complex of dwellings, this may be, for example, the stairwell, galleries and corridors as well as central installations if they are designated by contract as spaces that do not have a public character.

However, there is no living space within the meaning of Section 7:233 of the Dutch Civil Code if it concerns:

• short-term use of living space; whether this is the case is determined on the basis of the nature of the use, for example as a holiday home or an exchange house. In this sense, short duration thus refers to use and not to the agreed time;
• a dependent living space; this is the case if the house is rented out together with commercial space; in that case, the home is part of the rented business space, so that not the housing conditions but provisions regarding business space apply to the home;
• a houseboat; this is a phenomenon that does not fit the legal definition of article 7: 233 of the Dutch Civil Code. Such a house cannot usually be regarded as immovable property, because there is no lasting association with the soil or bank.

Rental price protection

If the condition of living space described above has been met, the tenant will first of all enjoy rental price protection. In that case the following starting points apply:

• the ratio between quality, including the location of the rented accommodation and between the rent that must be paid for it, must be reasonable;
• the tenant has the option at all times to have the initial rental price assessed by the Rental Committee; this is only possible within 6 months after the start of the lease; the decision of the Rent Committee is binding, but can still be submitted to the Subdistrict Court for review;
• the landlord cannot proceed with an unlimited rent increase; Specific legal limits apply to the rent increase, such as the maximum rent increase percentage determined by the Minister;
• the statutory provisions regarding rent protection are mandatory law, i.e., the landlord cannot deviate from them in the lease agreement to the detriment of the tenant.

Incidentally, the stated principles only apply to the tenant of a social housing. This is the living space that falls within the regulated rental sector and has therefore to be distinguished of the living space that belongs to the liberalized, or free rental sector. In the case of liberalized or free housing, the rent is so high that the tenant is no longer eligible for rent subsidy and therefore falls outside the protection of the law. The boundary between liberalized and social housing is approximately at the rental price of approximately 752 euros per month. If the agreed rental price exceeds this amount, the tenant can no longer rely on the principles described above, because it then concerns the rent of a liberalized housing.

Rent protection against termination of the rental agreement

However, for the application of the other aspect of rent protection, no distinction is made between tenants of social and liberalized housing. In other words, this means that every tenant of living space is largely and automatically protected against termination of the rental agreement, in the sense that the landlord cannot simply cancel the rental agreement. In this context, the tenant is specifically protected because:

• the termination by the landlord does not terminate the tenancy agreement in accordance with Article 7: 272 of the Dutch Civil Code; in principle, it is up to the landlord to first try to effect termination of the rental agreement by mutual consent. If that does not work and the tenant does not agree to the termination, the landlord’s termination does not really terminate the rental agreement. This means that the rental agreement continues as usual and the landlord has to file a legal claim for termination of the rental agreement with the subdistrict court. In that case, the rental agreement will not end until the court has made an irrevocable decision on the landlord’s termination claim.
• in view of Article 7: 271 of the Dutch Civil Code, the landlord must state a reason for the termination; if the landlord is going to terminate the rental agreement, he must comply with the formalities of the aforementioned article of the Civil Code. In addition to the notice period, a ground for termination is an important formality in this context. The landlord must thus state one of the grounds for termination in his notice of termination, as stated in Article 7: 274 paragraph 1 of the Dutch Civil Code:

1. the tenant has not behaved like a good tenant
2. it concerns rent for a fixed period
3. the landlord urgently needs the rented for his own use
4. the tenant does not agree to a reasonable offer to enter into a new rental agreement
5. the landlord wants to realize a land use on the rented out according to a valid zoning plan
6. the interests of the landlord in termination of the lease outweigh those of the tenant in the continuation of the lease (in case of landlord lease)

• the lease can only be terminated by a judge on the grounds stated in article 7: 274 paragraph 1 of the Dutch Civil Code; The aforementioned grounds are exhaustive: that is, if legal proceedings are conducted before the courts, termination of the rental agreement on other grounds is not possible. If one of the aforementioned grounds does arise, the court must also grant the tenant’s claim to terminate. In that case, there is therefore no room for a (further) weighing of interests. However, an exception applies to this point with regard to the termination ground for urgent personal use. When the claim is allowed, the court will also determine the time for eviction. However, if the landlord’s termination claim is rejected, the relevant lease may not be terminated by him again for three years.

Rental Market Movement Act

Previously, rent protection was in practice subject to a lot of criticism: the rent protection would have gone too far and there are more homeowners who would like to rent out the house if the rent protection was not so strict. The legislator has proved sensitive to this criticism. For this reason, the legislator has opted to introduce this law as of 1 July 2016, the Rental Market Transfer Act. With this new law, the protection of the tenant became less strict. In the context of this law, these are the most important changes:

• for rental agreements with regard to independent living space of two years or less and for rental agreements with regard to non-independent living space of five years or less, it has been made possible for the landlord to rent without rent protection. This means that the rental agreement ends by operation of law after the agreed term and does not have to be terminated by the landlord as before.
• with the introduction of target group contracts, it has also been made easier for the landlord to terminate the rental agreement regarding housing intended for a specific target group, such as students. If the tenant no longer belongs to a specific target group and can, for example, no longer be regarded as a student, the landlord will be able to proceed with the termination by reason of urgent personal use more easily and more quickly.

Are you a tenant and do you want to know for which rental protection you are eligible? Are you a landlord who wants to terminate the rental agreement? Or do you have any other questions regarding this blog? Then contact Law & More. Our lawyers are experts in rental law and are happy to provide you with advice. They can also assist you legally should your rental dispute lead to legal proceedings.