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)

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)

 

 

Shared housing: rented out according to the rules?

Attention! As of 1 January 2017, the municipality of Amsterdam has changed the rules for renting/renting out houses for multiple occupancy. An update will follow a.s.a.p. on our website.

Amsterdam has a shortage of houses in all categories, including starters. The wish is to live independently, but the reality for many is that this is not financially feasible. Let alone that it will ever be your turn for a social rental home. One solution is to share a house; together with others, you then rent a house in the private sector and share the (high) burden. Everyone is happy: starters have a place in the city they can call home, and landlords can ask a higher rent for their house (after all, three people with a job can pay more than one or two).

Not a problem, is it?

Maybe so, because there are actually rules about when a rental property may or may not be occupied by a number of adults. So when do you legally rent a house to a group of people?

The answer to this question is not as simple as it seems.

The municipality has also realised this through the results of the study ‘Woningdelen in Amsterdam’ (House sharing in Amsterdam) of February 2016. This study was commissioned by the municipality, in response to the memorandum ‘Room for house dividers’ of January 2014.

The municipality would like to facilitate as many different forms of housing in the city as possible, but of course without compromising the quality of life. In order to prevent excesses, rules have been drawn up that must be met in order for it to be allowed to share rental accommodation. On the one hand, these are rules for non-self-contained dwellings, such as student residences, in which a room is rented out. On the other hand, these are rules for independent residences that can be rented in various ways by a number of people.

So when is a house a student house, and must those rules be met, and when is it a house rented by a group? And when are there ‘abuses’ that should be enforced? The study of February 2016 shows that for almost all parties, tenants, landlords and enforcers, this is not unequivocal.

An example:

  1. Three adults live in a house with three bedrooms and a living room, each using their own bedroom. They pay the rent per person to the landlord.
    b. Three adults live in a house with three bedrooms and a living room, they each use their own bedroom. They pay the rent from a joint account to the landlord.
    c. Three adults live in a house with three bedrooms and a living room, they each use their own bedroom. They pay the rent to one of the three housemates, who pays the full amount to the landlord.

Although they may seem the same, there are legal differences in these situations and they may all fall under a different category. They must comply with different rules on a case-by-case basis in order to be legally rented and let.

These three situations could be seen as follows:

  1. Can be seen as a roomwise rental in a dwelling for which a residence permit is required. For further information, see https://www.amsterdam.nl/wonen-leefomgeving/wonen/bijzondere-situaties/woningdelen/wonen-per-kamer/.
    b. Can be seen as a living group renting a house. For a legal situation, a number of other conditions must also be met in this case, which can be found at https://www.amsterdam.nl/wonen-leefomgeving/wonen/bijzondere-situaties/woningdelen/wonen-per-kamer/.
    c. Can be seen as residence, and is legal if certain rules are met, such as can be found at https://www.amsterdam.nl/wonen-leefomgeving/wonen/bijzondere-situaties/woningdelen/inwonen/.

The differences are small in these situations and therefore there is little support for maintaining a relationship, because the feeling of legal inequality is encouraged. It is therefore possible that for this reason the municipality sometimes does not take action. One effect of enforcement could be that the residents are evicted. Something that the municipality does not aspire to, since the offence is generally not intentionally committed by the residents, nor by the landlord.

The real excesses, in which there are more adult tenants than rooms or in which fire safety is at stake, will of course be the subject of enforcement action.

As a result of the findings in the study, the municipality has decided to adjust part of the policy and create more clarity. It is the intention that this amended policy will come into force at the end of 2016. (See also https://www.amsterdam.nl/wonen-leefomgeving/wonen/bijzondere-situaties/woningdelen/)

If you are a landlord or tenant, and you have doubts whether you are legally (re)renting, do not hesitate to contact us.

Alicia Schoo
schoo@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)