House sharing with two people possibly forbidden?

At the beginning of this year, the Council of State issued a remarkable ruling that holiday rentals (AirBnB) without a permit are prohibited under the Housing Act. Until then, holiday rentals had been allowed in a number of municipalities without a permit provided that the lessor met a number of conditions. As a result of the ruling, the municipality of The Hague has now banned holiday rentals altogether, and in Amsterdam it has since been banned in a number of neighbourhoods. In this blog, however, we will discuss certain forms of housing that may also be prohibited by this ruling without a permit.

The ruling

Before we discuss the possible effect of the ruling, we will first return to the essence of the ruling. The Council of State has confirmed that, pursuant to Section 21 under a Hw (Huisvestingswet = Housing Act), it is prohibited to withdraw residential property from its intended use without a permit issued by the municipality. To that extent, there is no news, but the Council also ruled that the Housing Act does not provide the authority to grant an exemption from that prohibition. In short, the policy of allowing holiday rentals without a permit under certain conditions, as was the case in Amsterdam, for example, does not comply with the law. The municipalities will therefore have to introduce a permit system to make holiday rentals possible again.

Municipalities allow house sharing with 2 persons

Therefore, it is not possible to withdraw residence without a permit, but Article 21 of the Hw mentions more activities that are prohibited. For example, pursuant to Section 21(c) of the Hw, it is also not permitted to convert or keep self-contained living accommodation into non-self-contained living accommodation. This conversion is, for example, the case if a home that is originally intended for one household, is being rented out to more than one household. Conversion is already subject to a permit requirement in Amsterdam, for example, but just as in the case of holiday rentals, it is permitted under certain conditions.

“A permit requirement does not apply to conversion due to occupancy by two persons. After all, the municipality of Amsterdam does not want to treat two friends who live together any differently than a couple”[1]

The municipality of Nijmegen implicitly states the same thing by only explicitly prohibiting conversion to more than two non-self-contained dwellings.[2] The municipality of Utrecht also only imposes a permit requirement in the event of conversion for the benefit of more than two persons.[3] The municipality of Rotterdam, on the other hand, takes an even more flexible attitude. It argues that a conversion permit is only required if there are 4 or more people living in a room.[4]

Despite the fact that these municipalities have the apparent aim of (restrictively) admitting house sharing without a permit, the Housing Act, if we follow the decision of the Council of State, offers no opportunity for this other than with a permit, just as in the case of holiday rentals.

Hospita (landlady) rental

In addition to room rental, hospita rental is also a form of housing. Hospita rental is a form of room rental in which the landlord also lives in the house. The housing ordinance of, for example, Nijmegen includes a special exception for hospita rentals.[5]

“The licensing requirement referred to in paragraph 1(b) of this Article does not apply to a situation with a hospess/hospita”.

But also in other municipalities hospita rental is allowed without a permit. However, again in view of the ruling of the Council of State, it seems to us that this is not possible under the Housing Act.

The concept of household

Whether a permit is required is crucial whether the dwelling is inhabited by more than one household. Although the concept of household is not defined in the Housing Act, it appears from the legislative history that the legislator assumes that in the case of a house being let by a room, the house as a whole no longer constitutes a separate dwelling. In addition, the Council of State has interpreted the term ‘household’ to mean a household if it can be assumed that there is an intention among the occupants to form a household for an indefinite period of time.[6]

The latter is not necessarily the case when, for example, a daughter who is studying shares a house with another fellow student, since there is usually no intention of letting her stay indefinitely. In short, strictly speaking, a conversion permit should also be applied for in this situation.

Enforcement

Finally, we come back to the current situation. As explained above, the consequence of the ruling of the Council of State that the sharing of housing by two (or more) persons each forming a separate household is thus prohibited and exemption without a permit is in fact not possible. Nevertheless, it is unlikely (and as far as we are concerned also undesirable) that municipalities would enforce the same if only because they see no need to do so for practical reasons. It therefore only becomes problematic when, for example, local residents request enforcement. In principle, municipalities are then obliged to enforce, which can lead to rather undesirable situations. Another option is, of course, to actually include all these situations in the permit system, but given the increasing bureaucracy, it would probably be even better if the legislator reviewed the Housing Act on this point. It will definitely be interesting to see in the coming period whether the line taken by the Council of State is actually consistently pursued.

Do you have any questions about this blog or would you like to know more about the (im)possibilities of house sharing? Please feel free to contact M2 advocaten.

Lawyer Ginio Beij (beij@m2advocaten.nl)

 

1] Explanatory notes Housing Ordinance Amsterdam 2020 p. 34

2] Housing Ordinance Municipality of Nijmegen 2020 Article 13 (1)

3] Housing ordinance Utrecht Region 2019, municipality of Utrecht article 3.1.2.

4] “Verordening toegang woningmarkt en samenstelling woningvoorraad 2019” (Rotterdam) article 3.2.2.

5] Housing Ordinance of the Municipality of Nijmegen 2020 Article 13 (2)

6] ABRvS 13 March 2013, ECLI:NL:RVS:2013:BZ3977

New rules for B & Bs in 2020 in Amsterdam

Amsterdam has experienced explosive growth in the number of bed & breakfasts ( B & Bs ) in recent years . Because so many B & Bs have been added, the municipality of Amsterdam has decided to tighten the rules for B & Bs in 2020. In this blog we look at these proposed rule changes for B & Bs . 

The changes listed below are not yet definitive. Nevertheless, it is very likely that most of these regulatory changes will be introduced from 1 January 2020. These rules are an addition to the existing rules. The existing rules can be found here . We list the most important changes from 1 January 2020 for you, followed by an explanation.

  • From now on a B&B requires a permit;
  • A maximum number of B & Bs will be determined per neighborhood ;
  • Only owners (ie no tenants) can operate a B&B from January 1, 2020 ( this change has been canceled. Tenants may also be eligible for a permit );
  • B&B holder must keep night stay during guest stay;
  • The B&B may never be offered for holiday rental;
  • A maximum of 61 m2 may be rented to guests (despite the size of the home);

 

Explanation changes

  • A permit is now required for a B&B

 Explanation : One of the most important changes is that a permit is now required for a B&B. Until now it has only been a duty to report. The permit requirement gives the municipality two important instruments for enforcing the rules. For example, when applying for a permit, it can assess whether the B&B meets the conditions and it also has the option of withdrawing a permit in the event of a violation.

  • A maximum number of B & Bs will be determined per neighborhood

 Explanation: Quotas are set for each neighborhood. If the number of applications is higher than the neighborhood quota, the permits will be issued by drawing lots. The permit is in principle issued for a period of five years. This also means that a permit holder in a popular neighborhood runs the risk of losing his permit after five years.

  • Only owners (ie no tenants) can operate a B&B from January 1, 2020 ( this change has been canceled )

 Explanation: Until now it was the case that tenants could also operate a B&B in their rented property. This is no longer permitted from 2020 and tenants will therefore not be eligible for a permit. The objective of the municipality for this measure is to prevent so-called ‘straw structures’. In some cases, landlords had thought that they could let a tenant run the B&B, who then had to transfer part of the income (or everything) to the landlord. The municipality’s main objection to this was that one lessor could in fact operate several B & Bs . It is still unclear whether the operator of the B&B must be 100% owner or whether 50% (or less) is sufficient.

  • Transitional arrangement

The previous measure is of course a tough one for renting B&B holders. A small compensation for these B&B holders is that there will be a transitional arrangement for a period of two years. In short, these renting B&B holders only have to definitively stop their activities from January 2022. To be eligible for this transitional arrangement, the B&B must have started before January 1, 2019. This means that a tenant who started a B&B in February 2019, for example, will have to discontinue his B&B from 1 January 2020.

This transitional arrangement also applies to owners who are raffled for a permit. If an owner started a B&B before January 1, 2019, this owner will receive a two-year respite. In contrast to the tenant, the owner will be able to (again) compete for a new draw for a permit.

  • The B&B may never be offered for holiday rental
  • It becomes mandatory for the manager to keep his own night stay during the guests’ stay

 Explanation: For many it is unclear what the difference is between holiday rental and B&B, not least because both are often offered via the same type of websites. In short, a holiday home is rented occasionally in the absence of the owner or tenant of the home. The original idea behind the term ‘holiday rental’ is that the owner or tenant himself is ‘on holiday’ during the period in which the property is rented. This is in contrast to the B&B, which basically rents all year round, whereby the B&B owner himself actively acts as host / hostess.

Because different rules apply to holiday rentals and B & B, the municipality of Amsterdam wanted to emphasize the distinction by stating that the owner of the B & B itself always stays in the home during the night. Furthermore, a B&B permit holder may never offer the relevant home for holiday rental. So if the B&B holder goes on holiday as a self-employed person, he may not offer the property for holiday rental.

  • A maximum of 61m2 may be rented to guests regardless of the size of the property ;

 Explanation: Until now, B&B owners were allowed to make a maximum of 40% of their housing surface available to their guests. This rule is maintained, but also the additional rule that a maximum of 61 m2 may be rented out to guests regardless of the size of the home. This rule may have costly consequences for existing larger B & Bs now that this means that the property will have to be classified differently. For the time being, it is unclear whether the municipality is willing to take into account existing larger B & Bs .

Conclusion

The new regulations for B & Bs are quite drastic now that existing B&B holders may have to stop their B&B from January 1, 2022 or even January 1, 2020. This month (October 2019), the municipality will announce whether the draft plans are actually being implemented or whether adjustments are still being made. It will also become more clear about the exact method of granting permits. We will keep you informed of the latest developments regarding B&B regulations.

Do you own a B&B or do you want to start one, please feel free to contact M2Lawyers.

Lawyer Ginio Beij (beij@m2advocaten.nl)

A ban on holiday rentals (AirBnB)?

Since October 1, 2017, there is a reporting obligation in Amsterdam for people who want to rent out their home through holiday rental sites such as AirBnB . In this way the municipality can check better whether landlords are complying with the rules. If the rental is not reported, a fine of € 6000 is imposed. A landlady successfully challenged this fine with the Council of State, but the ruling could have unpleasant consequences for holiday renters.

Case

Through AirBnB, a woman rents out her home for five nights to four American tourists, but does not report this to the municipality. The municipality then imposes a fine of € 6,000 for non-compliance with the reporting obligation. The woman challenges this fine in court, but her appeal is declared unfounded. The Council of State, on the other hand, considers that the fine was wrongly imposed on the lessor because the fine lacks a sound legal basis.

No legal basis

Why does the Council of State judge that there is no legal basis? Firstly, it is clear from case law that if a property is rented to tourists, even if it is a one-off, that this property is not available for permanent residence at that time and that there is therefore a withdrawal from the housing stock. Pursuant to the Housing Act (Huisvestingwet) (Article 21 (a)), it is prohibited to withdraw living space from the living space stock without a permit issued by the municipality if this housing space has been designated by the municipality. That is the case in Amsterdam.

Now the municipality has made a policy that makes it possible to withdraw a home without a permit. For example, they give holiday rental property an exemption for home withdrawal provided that they have met the conditions, such as the duty to report. The Council of State now judges that there is no legal basis for such an exemption. Only by introducing a permit system can housing withdrawal be legalized.

In short, now that the municipality was not allowed to allow the holiday rental through an exemption with a reporting obligation, the basis for the fine is therefore inadequate. For the landlord in question in itself a pleasant outcome, but it also means that the municipality has now received additional arguments to completely ban holiday rentals. In this respect, the judgment can therefore also have very negative consequences for holiday renters. The biggest direct consequence is that all holiday renters now strictly speaking act contrary to the law.

Possible consequences

At the moment it is not yet clear what exactly the municipality intends to do with the ruling. The alderman has states that the municipality will likely introduce a permit system to make holiday rental possible, but a tolerance construction may also suffice. In the case of a tolerance construction, holiday rentals remain prohibited, but the municipality can determine in which cases it actually acts and fines offenders.

The question is whether and for how long a tolerance structure can be kept. If interested parties request enforcement, the municipality has in principle a duty to enforce. In enforcement, it must be considered whether it is proportionate in view of the purpose of enforcement. Our estimate is that the tolerance policy will initially be maintained, but may not be sustainable in the long term.

In view of the above, the municipality will therefore welcome an upcoming change to the Housing Act. Currently there is already a bill to amend this law, which explicitly includes rules for holiday rentals. This provides the municipality with multiple instruments under the Housing Act to tackle unwanted holiday rentals. This also makes it possible to impose much larger fines for repeated offenses than is currently the case.

Finally, it is possible that the municipality decides to enforce a total ban or to formulate a policy where holiday rentals are not permitted in certain neighborhoods. It is doubtful whether a political majority can be found in Amsterdam for such severe restrictions. With this statement it seems to have become a possibility in any case.

What if you are now a holiday rental company?

If you have now received a fine for not complying with the reporting obligation, it is advisable to lodge an objection within six weeks of the fine being imposed. On the basis of the aforementioned judgment, your objection should be declared well-founded. For the near future, it is expected that the municipality will draw up new policy soon and will not impose any new fines until that time. A different assessment framework will then apply to fines that are subsequently imposed.

Incidentally, fines that are given for the withdrawal of a home will remain. Withdrawal of housing without a permit is not allowed. This can only be challenged if the facts are incorrect.

Finally, holiday-renters who have adhered to the rules under which the duty to report applies that they too are strictly in violation. Our estimate is that in that case it will not be enforced if the conditions that applied to the exemption are met (30-day rule, obligation to report, no more than 4 guests at once, etc.). Nevertheless, problems may arise if enforcement is requested (eg by neighbors).

The Amsterdam broadcaster AT5 asked Ginio Beij his views on developments following the decision of the State Council. You can see the fragment here .

 

If you have any questions regarding this decision or if you are looking for help in drawing up a notice of objection, please contact M2 Advocaten.

 

Lawyer Ginio Beij (beij@m2advocaten.nl)

Holiday rental (AirBnB): Judge moderates fines, minister wants to increase fines

Holiday home rentals in the Netherlands continue to be very busy, especially in Amsterdam. Last year, for example, an obligation to report was introduced and at the beginning of this year in Amsterdam the number of days which a house can be rented to tourists was reduced from 60 to 30 days per year. It is clear that politics are very much interested in reducing the holiday rentals of homes through tough measures. In this blog, however, we look at a recent ruling in which the court saw reason for moderation of the fine.  Finally, we also look at current political developments in this area.

Rules for holiday rental Amsterdam

Because Amsterdam wants to prevent the housing shortage in Amsterdam from increasing even further, it wants to ensure that homes are actually used as houses and are not used too much for holiday rentals to tourists. Vacation rentals are also referred to as house withdrawals and are in principle prohibited. In case of a violation a fine of €20.500,- can be imposed. Nevertheless, under certain conditions it is possible to (temporarily) rent out a house to tourists. These are the rules:

– The main resident must actually have their main residence in the house and be registered as such;

– The holiday rental may take place for a maximum of 60 days per year;

– Accommodation may not be granted to more than 4 persons;

– It is not a rental home of a housing corporation;

– The holiday rental must have been reported to the municipality.

Moderation penalty

In principle, if one of these conditions is not complied with, the municipality may impose a fine of €20,500. It is now the case that this fine can be mitigated under special circumstances. For example, in one case the fine was mitigated because the municipality could be held responsible (long-term construction work) for the fact that the owner in question could not rent out his house regularly. Slightly less special is the circumstance that the court found reason to split the fine in two because the property had only been let once and only limited financial benefit had been enjoyed. [1]

In a recent ruling, the court goes one step further. A landlord has rented out his house to six tourists. This means he does not meet the condition of a maximum of 4 guests. Therefore, the municipality has imposed a fine of €20,500 on him. Although the court indicates that it does not consider the high fines in general unreasonable in themselves, it determines that not meeting the requirement of a maximum of 4 tourists is not so serious that a fine of €20,500 is justified. Thus, there was no evidence of a peculiarity, but the court nevertheless ruled that this violation was less serious than, for example, in the case of violation of the maximum number of days. The court subsequently decided to set the fine at €8,000. In view of this rather remarkable judgment, it is very likely that the municipality will go for an appeal in this case.

Minister puts forward a proposal for higher fines

Also recently, Minister of Interior Affairs Ollongren’s bill to substantially increase fines for illegal holiday rentals has been adopted. According to this bill, it will be possible to impose a maximum fine of no less than €83,000 for illegal rentals. Such a fine would then have to be a “repeated violation”. The bill also contains a plan for an obligation to register. In Amsterdam there is already an obligation to report, but compliance will be simplified in the case of a national registration system.

Of course, it is not yet clear whether a bill will get through and what it will ultimately look like. Nevertheless, it is particularly interesting to see whether higher fines will also give the courts more reason to moderation in certain cases. In any case, it is striking that it appears cautiously from the jurisprudence that judges sometimes see reason to moderate fines where politicians want to punish even more severely. For the time being, it can in any case be assumed that it can be advantageous to challenge a municipal fine in court.

1] Rb. Amsterdam 7 June 2018 (not published)

Have you been fined for holiday rentals? Please feel free to contact us.

Lawyer Ginio Beij (beij@m2advocaten.nl)