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)

 

 

empty house

Fine for vacancy in Amsterdam, how does it work?

It has been possible for some time that owners of office buildings in Amsterdam were fined if they did not report vacancy on time, but since December 2016 it is also possible that owners of houses are fined if they do not report vacancy on time. With this fine, the municipality of Amsterdam wants to prevent further vacancy of houses in the city. The first fine was therefore imposed in September 2017 to combat the vacancy of homes. If we may believe alderman Ivens (Housing), more will follow. How does it work?

What is vacancy?

According to the Leegstandwet (Empty Vacancy Act), vacancy is when a house, office building or part of it is not actually used by a tenant or other user.  There is also vacancy if the use has the apparent intent to prejudice the operation of the law or the vacancy ordinance. With this second provision, the intention was clearly to retain the freedom to take action against constructions in which the building appears to be sufficiently in use, but which, in the opinion of the government, is not.

Obligation to report

If, for whatever reason, a house or office building is vacant for more than six months, the owner is obliged to report this to the municipality. If an owner fails to do so, he is in violation of the law. If he complies with the reporting obligation, he will consult with the owner within three months. The circumstances of the case will be taken into account, but the municipality will mainly want to ensure that the property is put back into use.

Obligatory nomination user

If the property is suitable for use and has been vacant for longer than 12 months, the Municipal Executive may nominate a user to the owner. The owner is then obliged to offer this user a user agreement within three months of the nomination. After the nomination, the owner still has the option of attracting another user, provided that this user actually occupies the premises within a reasonable period of time. If the property is not suitable for use, the Municipal Executive may require the owner to make the necessary arrangements to make the property suitable for use again.

Penalty

For a private landlord or owner-occupier, the fine is €2500 if the vacancy is not reported on time. For a professional landlord, the fine is €5000,- if the vacancy is not reported on time per empty house and for an empty building, the fine is €7500,-. However, this amount can even increase if the owner does not report any vacancy after the fine has been imposed. In that case, the municipality has the possibility to impose a further penalty of €10,000. All in all, the total amount can increase considerably if no notification is made, and it is therefore advisable for an owner to report vacancy of a house or office building to the municipality in good time.

 

If you have received or expect to receive a fine for vacancy and you are looking for legal advice, please contact M2 Advocaten.

Fine on illegal hotels in residences increased

Earlier in this blog we discussed when you, as a resident of Amsterdam, may or may not rent (parts of) a house to tourists.

Breaching the rules already resulted in a hefty fine of €13,500 under the Housing Act.

This fine has recently been increased to €20,500. In addition, in the event of a subsequent violation, a penalty can be imposed of another €50,000.

By increasing the fines, the municipality wants to make it even more unattractive to illegally rent out houses to tourists. This is to protect the housing stock in Amsterdam, where for years there has been an enormous shortage of (affordable) homes, and also to protect the living environment from possible nuisance or dangerous situations.

The municipality has also looked into the possibility of shortening holiday rentals from 60 to 30 days in the year, but this is not legally feasible at the moment.[1]

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

Ginio Beij
beij@m2advocaten.nl

Inheritance. Municipality offer sufficiently clear?

An offer is sufficiently determinable when the determination of the commitments undertaken by the parties can be made according to predetermined criteria. These criteria may contain a subjective element because the further determination may be entrusted to a third party or to one of the parties. This was recently the case in a Supreme Court case. It concerned the following case.

“A” is the owner and leaseholder of an apartment in Amsterdam. At some point, the municipality of “A” makes an offer for the canon of the new leasehold. “A” has the choice between a fixed canon for 10 years or a ransom. The offer letter also states the following:

“An ‘ingrowth scheme’ applies to you. This means that you will receive a discount on the canon in the first two years of the new period. The ingrowth arrangement applies to each payment method. The discounts to which you are entitled are not included in the above-mentioned surrender sum and canon amounts. You will find these discounts on the invoices you receive in due course”.

Furthermore, the explanatory note to the offer letter states the following:

“Municipal calculation new land value and new canon.

The new land value is calculated by multiplying the number of m² of usable area by the price per m². Because the leasehold right is more than ten years old, you receive a 40% discount on the price per m². The new canon is calculated by multiplying the land value by the current canon percentage”.

“A” initially chooses a fixed canon for 10 years, but later changes this into a ransom. The municipality agrees.

Subsequently, a dispute arises between “A” and the municipality about how the ingrowth regulation affects “A’s” choice to pay a ransom. “A” was under the assumption that, in addition to the ingrowth discount, the 40% discount on the land value would also be deducted from the lump-sum payment.

In the subsequent procedure, “A” took the view primarily that no agreement had been reached with the municipality because the offer letter from the municipality did not make it clear how the discount under the ingrowth scheme should be calculated on the redemption price. The Court of Appeal of Amsterdam agrees with “A”. According to the Court of Appeal, the amount of the lump-sum payment offered is one of the essentials of the agreement to be concluded and, since the offer letter does not make it clear how it is to be calculated, the offer cannot be sufficiently determined as far as the lump-sum payment is concerned.

The Supreme Court takes a different view and finds that the Court of Appeal sets too strict requirements with respect to the determinability of the discount on the lump-sum payment. According to the Supreme Court, the fact that the offer letter and the explanation thereof do not state how the discount on the lump-sum discount pursuant to the ingrowth scheme must be calculated does not exclude the possibility that the offer letter and the explanation may also contain sufficient points of reference for the other party, for example by linking the discount on the lump-sum discount to the size of the discount on the annual canon amounts due when determining the discount on the lump-sum discount, according to the Supreme Court.

Moreover, the municipality rightly pointed out that in the offer letter it stated that the discount to which the ingrowth scheme entitles is not included in the ransom, but will only be included in the invoice which the municipality will send in due course. According to the Supreme Court, this means that the municipality must calculate the discount in accordance with the requirements of reasonableness and fairness and in accordance with the municipal decree on the ingrowth scheme.

All in all, a somewhat unsatisfactory ruling, especially now that the average citizen is not an expert on leasehold law, the subject matter is complex and the amounts involved are often substantial. Since this is the case, the government can be expected to avoid misunderstandings whatsoever about the amount of the new canon.

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

Marius Rijntjes (rijntjes@m2advocaten.nl)