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Lease agreement house: clause to the detriment of the tenant still valid

In rental law, tenants of dwellings are generally well protected. Even if a tenant has agreed to a clause in the general terms and conditions that is disadvantageous to him, there is a possibility by law to have this clause nullified afterwards if it is unreasonably onerous. In a recent judgment of the Court of Appeal of Arnhem-Leeuwarden, a clause that was to the detriment of the tenant was nevertheless accepted by the Court of Appeal.

Case study

The tenant in question, a lawyer, has agreed with his landlord on a rental agreement for one year with, among other things, the condition in the general provisions that interim termination is only possible with the intervention of the court.

“Unless the parties have agreed to this or otherwise, full or partial interim termination of the tenancy agreement and suspension of the obligations arising from the tenancy agreement shall only be possible with the intervention of the court”.

It soon turns out that the tenant is not satisfied with the rented accommodation. The most striking complaint is a faulty fire alarm system that goes off unnecessarily more than once and thus keeps the baby awake. After having complained a few times about the accommodation, the tenant announces that he wants to terminate the rental agreement extrajudicially. The landlord does not accept the dissolution and refers to the recorded clause. The tenant, on the other hand, states that this clause is unreasonably onerous.

Legislation

On the basis of Article 6:233 of the Dutch Civil Code, a clause in the general terms and conditions may be annulled:

– If the clause is unreasonably onerous for the other party (Section 6:233(a) of the Dutch Civil Code)

– If the other party has not had a reasonable opportunity to take note of the clause (Section 6:233(b) of the Dutch Civil Code)

In principle, a private tenant of a dwelling is regarded as a consumer. This is important now that the law with respect to consumers considers a number of clauses in general terms and conditions to be unreasonably onerous in advance. These are included in the so-called ‘black list’ (Section 6:236 of the Dutch Civil Code). For instance, Section 6:236 sub b of the DCC explicitly states that exclusion or limitation of the power of dissolution must be considered unreasonably onerous. So far, the legislation seems to point in the tenant’s favour.

Judgment of the Court of Appeal[1]

The Court of Appeal considered that in this case the tenant cannot be regarded as a consumer within the meaning of Section 6:236 of the Dutch Civil Code. However, the Court of Appeal ruled that in this case the clause can still be upheld because the clause does not exclude or limit an appeal for dissolution of the lease agreement. Therefore, it does not limit the possibility of dissolution, but only the manner in which it can be dissolved. In the opinion of the Court of Appeal such a restriction does not unreasonably burden the position of the consumer. According to the Court of Appeal, the contractual balance is maintained now that the lessor cannot dissolve the contract out of court either on the basis of the law (Section 7:231 of the Civil Code).

Comments

Although the Court of Appeal considers the fact that both parties cannot dissolve the agreement out of court does not lead to an infringement of the contractual balance, in our opinion there is something to be disputed. After all, the Court of Appeal seems to forget that it is generally assumed that consumers are the weaker party and that the legislation with, for example, Section 6:236 of the Dutch Civil Code tries to create a more balanced playing field.  If a lessor can subsequently set these regulations aside by means of a clause, there is no question of a contractual balance, but the consumer is still in the weaker position.

Perhaps the fact that the tenant was a lawyer played a role in this case. The lawyer, who was also specialised in private law, will probably not be considered a weaker party in advance. However, the Court of Appeal did not explicitly take this factor into account in its judgment. In our opinion there is certainly something to be said that this clause should have been considered unreasonably onerous.

Would you like to know more? Feel free to contact us.

Marius Rijntjes (rijntjes@m2advocaten.nl)

 

1] In a judgment of the District Court of Middelburg in 2009, the court arrived at a different judgment in the same type of case. In this judgment, the court ruled that on the basis of Section 6:267(1) of the Dutch Civil Code, the consumer in question is expressly entitled to an extrajudicial dissolution authority. A provision that actually excludes reliance on that article can therefore be regarded as a restriction within the meaning of Section 6:236(b) of the DCC and would therefore be unreasonably onerous.

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Termination of rental agreement due to urgent own use

Tenants of residential property generally enjoy considerable rent protection. Therefore, a landlord cannot terminate the tenancy agreement without a reason stated in the law. One of these reasons is termination due to urgent personal use, including renovation, for example. But can there also be urgent personal use if the property is made available to someone other than the landlord? This blog looks at a recent judgment of the District Court of Amsterdam in which urgent personal use was assumed despite the fact that the house would be made available to someone else.

Case study

The landlord owns a four-storey building, of which the first floor and the third floor (storage space) are rented to a tenant. In addition, the second floor (31m²) is rented to the landlord’s son who lives there with his girlfriend. At some point, the landlord wants to thoroughly renovate the entire property. According to her, the property no longer meets today’s requirements and is in urgent need of renovation. She points out, among other things, the noise, the crooked floors and the lack of an escape route.

However, she is unable to finance this renovation without her son, who in turn only wants to do so if he can continue to live in the building. Something that, according to the son, is not possible if he, his girlfriend and future children, only have 31 square metres at their disposal. The landlord’s plan is therefore to merge the three upper floors into a single dwelling for her son. She therefore wishes to terminate the tenant’s rent on the first floor due to urgent personal use so that the house can be renovated.

However, the tenant does not agree with the termination of the lease. The tenant states that this is not personal use, but that the termination of the lease is mainly done so that the son will have access to extra floors. Simply put, according to the tenant it is not the landlord’s own use, but use by a third party.

Judgement of the court

First of all, the court ruled that the landlord has made it sufficiently clear that the house is actually in need of renovation. Next, it must be assessed whether this renovation

the landlord’s own interest, and whether this interest exceeds the tenant’s interest in continuing to live in the dwelling. According to the court, there can indeed be ‘personal use’ if the house is to be used by someone else, such as, in this case, the son. Such use can be considered personal use if the landlord’s own interest is served.

In this case, if the son would not have access to the other floors, he would use his limited financial resources to purchase (larger) living space elsewhere. As a result, he would no longer be able to co-invest in the necessary renovation of his mother’s premises. Without this investment, she would not have been able to meet the maintenance obligations as lessor, which would have forced her to sell the property. Therefore, the Court is of the opinion that the renovation does serve the lessor’s own interests and that the lessor therefore has a legitimate ground for termination.

Conclusion

In order to be able to terminate a lease on a property, a landlord needs a reason as described by law. One of those reasons is if the landlord urgently needs the rented property for his own use, which is the case with a large-scale renovation. This renovation must then be in the landlord’s own interest, and in principle this is not the case if the landlord wants to make the rented property available to friends or family. However, in this case, the landlord could not retain the property if her son did not co-invest in the renovation, and that included her own interest to terminate the rent. The fact that the house would then be used by her son is therefore irrelevant.

It is striking that in this case the tenant did not dispute the fact that the landlord would have insufficient means at her disposal. Therefore, it was not investigated whether the landlord had other possibilities to pay for the renovation, other than through her son. It is true that the lessor did not have sufficient resources, but it is possible that another investor or a loan would also have made the necessary renovation possible without jeopardising the tenant’s rental position on the first floor. Incidentally, in the event of eviction or relocation due to renovation, a tenant is always entitled to a relocation allowance.

Do you want to terminate a rental agreement due to urgent personal use or are you renting correctly and your landlord wants to terminate the rental agreement without legitimate reason? In that case please feel free to contact M2 Advocaten.

Lawyer Marius Rijntjes (rijntjes@m2advocaten.nl)