alimony indexing

Indexing rent afterwards, is that okay?

Many (standard) leases include an indexation clause. This means that the rent can be increased once a year according to a method of indexation stipulated in the agreement.

Sometimes the landlord does not apply the indexation clause in practice. Suppose the landlord has forgotten to apply the indexation for 4 consecutive years. The question then arises whether the landlord is allowed to catch up with this in one go. This would mean that the tenant would have to pay a substantially increased rent in the future, which would be increased by 4 years of indexation. In addition, the tenant would also have to pay ‘overdue’ rent over the past 4 years.

That sounds unreasonable at first sight. Nevertheless, the rule in case law is that the landlord may, in principle, indexate with retroactive effect, see, for example, the judgment of the Amsterdam Court of Appeal of 10 April 2012 (read here). The reasoning behind this is that the landlord’s right to indexation has not been lost as a result of legal processing. Just sitting still is not sufficient for the administration of rights, additional circumstances are required. However, the period during which the landlord can claim back overdue rent is limited to 5 years, because such claims become time-barred after 5 years. (Please note that this limitation only applies to the collection of the overdue rent, not to the possibility of determining an increased rent for the future on the basis of indexation).

The landlord may therefore index the rent afterwards. But a good legal rule does not come without exception. Under certain circumstances, it may be unacceptable to index retrospectively according to standards of reasonableness and fairness. A recent example played in the District Court of Overijssel of 13 December 2016 (read here). In this case, landlord Nettorama had leased part of its supermarket space in 1983 to a tenant who sold bread, cheese and nuts there. The lease contained an indexation clause.

The indexation clause had never been applied by Nettorama, but in 2015, i.e. 32 years after the start of the agreement, Nettorama wanted to implement it. This would mean that the tenant would have to pay € 3,100.45 per month instead of € 1,000. Also, over the past 5 years no less than € 114,362.50 in overdue rent would have to be paid.

The Subdistrict Court considered this unreasonable. In addition, the Subdistrict Court pointed out that Nettorama provided an annual settlement of the rent, without the indexation, and that the tenant was therefore entitled to trust that Nettorama would no longer be entitled to the indexation.

As far as I am concerned, this reasoning of the Subdistrict Court is rather thin, because the mere provision of an annual statement does not mean that a landlord waives his right to claim indexation. Nevertheless, the outcome of these proceedings is satisfactory, because the payment of € 114,362.50 after 32 years is too much of a good thing.

The main rule, therefore, is that the landlord may index afterwards, unless the District Court Judge thinks it really is too much.

Ginio Beij (beij@m2advocaten.nl)

Houses alongside water

Airbnb agreement with Amsterdam

Last Thursday, Airbnb agreed to modify its website. The update limits the number of days a property can be let per year. According to the City of Amsterdam, this agreement has made it more difficult to use properties as illegal hotels. With these kind of rules and agreements, the municipality wants to ensure that houses, which are used illegally for tourist rentals, will become available again for house hunters. The legal limit that a resident is allowed to rent out his house to tourists is 60 days a year in Amsterdam, as you can read in previous blog. In practice, however, many properties are available for longer rentals on the Airbnb website, and are also rented out more than those 60 days. This is already actively enforced by the municipality, and there are hefty fines for this violation.

As of January 1, 2017, hosts will be able to see in their Airbnb account how many days they are still allowed to rent, and will not be able to rent the property for the rest of the year if they passed the 60-day limit. [1][2]

Would you like to know more? Please feel free to contact us.

 

Ginio Beij (beij@m2advocaten.nl)

prohibition sign rolling suitcases

To be or not to Airbnb? Enforcement in Amsterdam

Previous blogs discussed what is enforced when it comes to B&B’s.

But what if you don’t want to start a B&B, but only want to rent out your house when you are on holiday? Through Airbnb, for example.

It is okay, if you follow two rules: no more than 60 days a year, and no more than 4 people can stay in your place. Is everyone following these rules? Definitely not. A 6-person quick-scan on the Airbnb website gives you more than enough choices of apartments/homes to choose from. Which is not allowed, because the maximum is 4 people. The City of Amsterdam wants Airbnb to make it impossible for a house to be rented out if they do not follow to the rules, so it is no longer possible to book for more than four people per house. The municipality also insists on compliance with the 60-day rule. So the municipality wants the website to automatically block a house as soon as it has been rented out for more than 60 days. In addition, the local authority wants Airbnb to provide the host’s address information to the local authority for more targeted monitoring. To date, Airbnb has no plans to provide that information, and Amsterdam is threatening to ban the platform in response.[1] The two parties are still discussing this. The municipality wants this data so that fewer violations are committed, making it easier for the municipality to track down offenders, and thus reducing the risk of nuisance from tourists.

How will this be enforced?

Detecting illegal activities is done in a number of ways: through reporting of neighbours or police, previous violations, mystery guests, and ‘scraping’ (by means of a computer program collecting data from a website)[2].  Sometimes this is done in an area-specific way: for example, if a neighbourhood receives a relatively large number of reports from the police and local residents, the entire neighbourhood is examined. Sometimes also in response to a report from a resident. Reporting by local residents is promoted from the municipality; a Summer Hotline was active last summer, and an online hotline Searchlight is still available.[3]

The municipality acknowledges that they do not have enough capacity to respond on all accusations from local residents, but promises to keep the reporters informed. The city centre, for example, has a total of 2.75 FTEs available for detecting and dealing with so-called illegal hotels, plus a couple indirectly from the Fire Safety department. [4]

Who is the offender?

In general, the law is executed in common cases where the property is only used for renting out to tourists and is not (or no longer) inhabited. This is then housing withdrawal and a violation of the Housing Act and the Regional Housing Ordinance. Or when a owner rent its house to too many tourists at the same time, which is not only a violation of the Housing Act and the Regional Housing Ordinance, but also a violation of fire safety.

A remarkable case has recently been heard by the District Court of Amsterdam. Father owns the floor on the ground floor, and used it as a pied-à-terre, so he is registered with another municipality. Daughter lives in the apartment above, and owns 1/100th of the pied-à-terre. Father is three to four days a week on the ground floor, the other days he rents it out to tourists. He arranges the Airbnb reservations, cleaning, and receives the rentals. Daughter receives the tourists and her number is given to them for questions; she receives no compensation for this. Unfortunately, this is not legal. It’s not allowed to rent a second home to tourists during periods when you’re not there. It is only allowed to keep a second home in Amsterdam if the second home is used by the tenant/owner him/herself, so you are never allowed to rent a second home to tourists in Amsterdam. On top of that, they rent out more than 60 days a year. The municipality therefore sees this as a withdrawal of the house from the housing market, for which they did not have a permit, and therefore a violation of the Housing Act and the Regional Housing Ordinance. Father will therefore receive the full fine of €12000. Daughter in the first instance as well. The Court ruled that this is not proportional; although she is complicit in the violation, she helps, but receives no compensation. The District Court is also of the opinion that if father had not rented the apartment, it would not have been plausible that she had committed the offence. She therefore received a reduced fine of €3000.[5]

Recently it has also been possible for the municipality to enforce the same rules in houseboats, but this was not possible because houseboats were subject to other laws and regulations.[6]

Airbnb at rental property and HOA

For rental properties, it may be that the contract states whether (sub) letting is allowed, or that permission must first be requested from the landlord. In some cases the landlord even has the right to dissolve the rental contract and to vacate the property.[7]

If the property belongs to an HOA, it may be regulated whether or not renting through Airbnb is allowed, or permission must be requested first. Sometimes, however, this is a gray area and short rentals are not explicitly prohibited, as this is a relatively new phenomenon. For additional information on this topic, read on in this blog.

Would you like to know more? Please feel free to contact us.

Lawyer Ginio Beij

Suspension of rent due to defects? Tenant watch out!

In practice it happens regularly. A tenant who is fed up with it. Whether it is residential or business accommodation, there are defects that cannot be solved. There are leaks, there is draught, the rented property is far too hot or too cold. Despite several reminders, the landlord does nothing about it. And then what?

The solution that many tenants choose if they think it takes too long? Just not paying the rent for a while. If the landlord repairs the defect, the rent will be paid in retrospect. The means a temporary suspension of the rent payment.

In itself that sounds logical. What better way to persuade the landlord to take action than by hitting them in the wallet?

Nevertheless, a tenant should handle this carefully. According to established case law, rent can only be suspended if the defect is serious enough. In addition, it is important that the suspension must be proportional to the loss of rental enjoyment. If, despite a defect, it is still possible to use the rented property, it is not permitted to suspend the rent altogether. In practice, however, it often happens that the tenant completely suspends the rent.

A judgment of the District Court of North Holland, published at the beginning of this year, shows an example of how things can go wrong for the tenant. The ruling concerned business premises that were rented to a car rental company. At a certain point, a fire started in the rented premises, after which the business premises were damaged. A few months after the fire, the smoke and soot damage was repaired. However, the renter had suspended the entire rental payment, even after the repair, due to the cause of the defect. It had been established that the damage had occurred because the lessor had installed fire-resistant doors that did not close sufficiently.

The court, however, found this entire suspension to go too far. In general, the fact that the fire-resistant doors did not close properly was no reason to suspend the rent in full. It came down to the fact that the tenant had to pay the full rent with interest and fines. Read the entire judgment here.

Are you in doubt whether you can suspend the rent or do you want to know what other possibilities there are for remedying defects? Feel free to contact us.

Lawyer Ginio Beij (beij@m2advocaten.nl)

 

 

Can a VvE ban AirBnB or Short Stay?

A previous blog has already extensively discussed the requirements to start a bed-and-breakfast (read this blog here).

A situation that also regularly occurs is that within an apartment building properties are used for AirBnB or short stay. Especially during short stays this can be a nuisance. A group of tourists spending a long weekend in Amsterdam can usually be a bit noisier than the average resident. For example, we are aware of cases where the common areas (corridors, elevator, stairwell) have been damaged.

The question is whether the VvE can prevent such use and how. Most split certificates (based on the model regulations) state that the owner may only use the apartment according to the purpose stated in the deed. If the apartment’s purpose is living, then the question is whether renting for AirBnB or Short Stay is contrary to that purpose.

Case law shows that especially with regular short stay rentals this is contrary to the purpose of living. In several judgments it has been determined that living is a matter of ‘permanent residence’ and that a short stay does not fit in with this. See, for example, this judgment.

For an VVE, it is advisable to explicitly include the ban on renting out for AirBnB or Short Stay in the demerger deed or the internal regulations (the latter is easier to achieve in practice than amending the demerger deed). In this way, there is clarity for all apartment owners. The VVE often also has the possibility to impose fines in case of violation of this prohibition, in order for an extra means of pressure to prevent unwanted rentals. These fines must also be recorded.

However, it is not always the case that a rental on the grounds of AirBnB or short stay is in conflict with the purpose of living. If, for example, an apartment owner is abroad once for 3 months and rents out once for that period, this does not have to detract from the sustainable use as a home. In that case, such an occasional rental does not conflict with the purpose of living. An example of this in this ruling.

It must therefore always be taken into consideration whether a rental for short stay or AirBnB purposes is prohibited. Usually, this rental will be in conflict with the living purpose, so that the VVE can prohibit this use and even impose fines. If it is an occasional rental, it may be different in some cases, but that is an exceptional situation.

Does this situation look familiar to you or would you like to discuss the situation in your home office? Feel free to contact us.

Lawyer Ginio Beij (beij@m2advocaten.nl)