contract image

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)

Paralegal Arjan Ang (ang@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.

Service costs for liberalised rent: more freedom of contract for landlord of living space

Earlier we published a blog about a landlord of a free sector property, who had to repay €16,500 to her tenant because she had charged far too much for furnishing and because she had not specified Owner’s Association costs. In the meantime, it seems that a turnaround in case law has taken place and that lessors of houses in the free sector are being given more freedom to make agreements at their own discretion. 

Determination of service costs

In short, service costs are the costs of the property that the landlord charges on top of the basic rent for supplies and services. Landlords are required by law to provide their tenants with an annual overview in which all service costs charged are being specified, including the method of calculation (Section 7:259(2) of the Dutch Civil Code). In practice, landlords of privately owned dwellings do not always use an exact approach when determining the service costs. They have simply included an amount in the tenancy agreement for the service costs which they believe adequately cover their efforts.

Old situation

Determining the service costs by estimation could sometimes be expensive for the landlord in the past. When the tenant challenged the level of the service costs, it was not uncommon for the landlord subsequently to have to pick up the tab because it could not be demonstrated that the service costs charged were related to actual costs. The Amsterdam Court of Appeal ruled on this in 2017:

“The Court of Appeal deems (…) if the parties have agreed an amount for service costs, that amount must be reasonable, in the sense that it must be in reasonable proportion to the value of what is offered for it”.

In other words, the service costs charged by the lessor should be based on actual costs. Therefore, if the tenant could make it clear that the service costs were not based on actual costs, the lessor had to reimburse the service costs that were overcharged.

Current state of affairs

Remarkably enough, the Court of Appeal of Amsterdam has come to an entirely different conclusion on the basis of the legislator’s explanation of Section 7:259 of the Dutch Civil Code and is of the opinion that only when no or incomplete agreements have been made about the service costs, it should be determind that the service costs should be considered to be at least. For the rest, however, the Court of Appeal reasoned as follows:

“In the case of liberalized dwellings (…) contractual freedom with regard to (the level of) service costs (…) is the starting point, just as this freedom in principle also applies to the determination of the rent. (…) There is no need for a relation to the actual costs’.

In short, according to the last judgment of the Amsterdam Court of Appeal, in case of a liberalized dwelling the parties are free to agree on a compensation for service costs at their discretion without necessarily having to make a connection with the actual costs. In short, a landlord may charge €350 per month for the rent of a couch of €300, – provided the tenant has agreed to this.

Note

One may wonder whether the verdict of the court of appeal actually makes much of a difference. After all, even before this ruling it was possible for the landlord of a liberalized dwelling, if he was of the opinion that he was insufficiently compensated for the service offered, to increase the (bare) rent at will, provided the tenant only agreed to the higher rent. This ruling, on the other hand, forms a safety net for those landlords who, in the subdivision between bare rent and service charges, had wrongly included too much of the rent in the service charges.

However, with this ruling one may wonder what the function of the mandatory overview (Section 7:259 (2) of the Dutch Civil Code) still is, with the exception of the service charges part where the final amount is determined afterwards, as is the case for the use of utilities. There was already no statutory sanction for failure to provide an overview, and with this ruling landlords of liberalized dwellings seem to have even less reason to actually provide it, which does not improve transparency towards tenants.

Questions about service costs? Feel free to contact M2 Advocaten.

Lawyer Marius Rijntjes rijntjes@m2advocaten.nl

Paralegal Arjan Ang (ang@m2advocaten.nl)

picture of contract breach

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)

Paralegal Arjan Ang (ang@m2advocaten.nl)

crossing sign

Lease of business premises: Lease contract does not automatically pass in the event of a change in legal form

Starting entrepreneurs often start as a one-man business or VOF (general partnership) and then, when turnover increases, switch to another legal form such as a BV (limited liability company). The lessor is not always informed of this change, let alone explicitly asked for permission. In principle, this means that the lease will not have been transferred to the new legal entity either. What are the possible consequences of this?

An entrepreneur will not always ask explicit permission from the lessor if a new company structure is formed. A lessor will often not make a problem of this. At least, as long as the rent continues to come in.  But the fact that the landlord continues to receive these payments does not automatically mean that the landlord has agreed to the contract being taken over by the new legal form.[1] This distinction is particularly relevant if the new legal form is no longer able to pay the rent as was shown in the following case study.

 Case study

An existing VOF entered into a tenancy agreement with the landlord.[2] The tenancy agreement was concluded for a period of five years and then extended for another five years. During this period, the VOF changes its business structure. The VOF becomes a BV (Limited liability company) and informs the lessor of this by letter. The lessor does not respond to the contents of the letter and continues to receive the rentals transferred by the BV. A few years later the BV goes bankrupt. However, the lessor states that he has never concluded a lease agreement with the BV and holds the former partners of the original VOF jointly and severally liable for the overdue rent payments. The partners argue that the VOF no longer exists and that they also informed the lessor of this by letter. Now that the lessor has not objected in all that time, they have assumed that the lessor has agreed to the takeover of the contract. According to them, the lessor can therefore only appeal to the (bankrupt) BV.

Contract takeover (6:159 Dutch Civil Code)

The court must assess whether in this case a contract was taken over as referred to in Section 6:159 of the Dutch Civil Code. In short, has the lease been legally transferred to the BV? According to Section 6:159 of the Dutch Civil Code, the following conditions must be met for a contract to be taken over:

– A deed in which the tenant transfers his legal relationship to the new tenant;

– Unambiguous cooperation of the lessor in the takeover of the contract (however, this cooperation does not necessarily have to be in writing).

In the case at hand, there was a deed showing that the VOF wished to transfer the lease to the BV, but the lessor never unambiguously cooperated in a contract takeover. It is true that the tenant wrote to the lessor, but the lessor then never explicitly stated that he agreed to a takeover of the contract. The former partners were therefore still jointly and severally liable for the rent arrears.

Incidentally, if a partner leaves the company, he remains jointly and severally liable as long as the lease is continued unchanged by his former partners.[3] It is therefore important for the retiring partner that the landlord explicitly agrees to the contract being taken over by the former partners so that the retiring partner is relieved of his liabilities.

Conclusion

Tenants of business premises would do well to ask the landlord’s explicit consent if they want the lease, and hence the liability, to be transferred to the new legal form. For a lessor, on the other hand, it is important to gain a good understanding of the financial position of this new legal form before agreeing to a contract takeover.

Are you looking for legal support in the transfer of your business to another legal form or has your tenant changed legal form and would you like to seek legal advice? Feel free to contact M2 Advocaten.

Attorney at law Ginio Beij (beij@m2advocaten.nl)

Paralegal Arjan Ang (ang@m2advocaten.nl)

 

1] Hof Amsterdam 12 November 2013, ECLI:NL:GHAMS:2013:5220

2] Rb Dordrecht 30 July 2012, ECLI:NL:RBDOR:2012:BX5073

3] Ho f ‘s-Hertogenbosch 16 September 2014, ECLI:NL:GHSHE:2014:3642

vintage phote grocery store

Business space rental: Deviating terms for retail and catering premises

Tenants of medium-sized business premises (7:290 BW) enjoy more rent protection than tenants of other business premises such as offices (7:230a BW). The idea behind this is that a shop or food establishment usually attaches more value to the specific location, for example for public familiarity. In principle, the tenancy agreement cannot deviate from this rent protection either, unless a judge agrees with the deviating clause. This blog provides an overview of the legal framework surrounding the deviating clause and its durability in court.

Legal framework

The statutory provisions relating to 290 business premises (7:290 to 7:310 Dutch Civil Code) are of so-called semi-prescriptive law. This means that it is not allowed to deviate to the detriment of the tenant. In case it does happen, the deviating clause is in principle voidable. Nevertheless, there may be situations in which not only the lessor but also the lessee has an interest in deviating from what is permitted under the statutory provisions, for example to make a more flexible lease contract possible. Examples of possible deviations:

– Deviation from the statutory lease terms (usually 5+5 years).

– Deviation by agreeing that termination of the lease can take place without notice or judicial review.

– Deviation from the possibility to request a rent review (7:303 BW) after the end of the lease period.

In these cases it is permitted to deviate from the statutory provisions, but the clause will have to be approved by a judge (7:291 paragraph 2 of the Dutch Civil Code). Therefore, a tenant’s consent to deviate is not sufficient. This is to prevent that a tenant can be put under pressure by the landlord to agree to the clause.

The judge uses the following criteria for approval:

– The tenant’s rights are not materially affected by the deviating clause.

– The tenant’s social position is so strong compared to the landlord that he has no need for reasonable protection.

Exception

With regard to substitution (Section 7:307 of the Dutch Civil Code) no approval can be requested for a deviating clause. The possibility for a tenant to sell his business including the rental rights is considered so important that a deviating clause is not allowed. Therefore, the court cannot give its approval to a clause that excludes substitution.

Subsequent approval

In practice, it regularly happens that the parties agree on a deviating clause and do not ask the court for approval. The question is, of course, what happens when the parties later disagree on the derogating clause.  A judgment of the Supreme Court has shown that judicial approval can also be given retrospectively. The question is whether, in such a situation, the court would still be inclined to rule that the tenant’s rights have not been substantially affected now that the tenant sees reason at that moment to want to waive the deviating clause. After all, approval of the deviating clause usually takes place with the tenant’s consent. It seems that the risk for the lack of prior approval lies mainly with the landlord.

Limitation period for reliance on voidability

In spite of the above, there is still an advantage for the landlord if he enters into a deviating clause with his tenant without the approval of the court. Pursuant to Section 3:52 of the Dutch Civil Code, the right of the lessee to invoke the voidability of the stipulation lapses after a period of 3 years after the lessee has invoked this ground for nullification. Usually this will be 3 years after the rental agreement has been entered into with the deviating clause, but under certain circumstances this can also be another time (see this previous blog of M2 Advocaten).

Conclusion

Legal practice shows that court approval depends on many different factors. In a judicial assessment of the deviating clause, the most important thing is that the tenant’s interests are not too much harmed. The tenant’s position is also important. A deviating clause will be less likely to be approved if the lessee is an independent entrepreneur, while in case of an internationally operating chain there will be considerably more room for the lessor to include a deviating clause.

Are you looking for advice in drawing up a deviating clause or a petition for approval of the deviating clause?  Please feel free to contact M2 Advocaten.

Lawyer Ginio Beij (beij@m2advocaten.nl)

Paralegal Arjan Ang (ang@m2advocaten.nl)

Building with store - Herenstraat

Landlord misses out on rent review after renovation of property

An owner of a retail property has his property rebuilt, which increases its surface area. He agrees with the tenant that the rent nevertheless remains the same. If the owner subsequently finds out that his property can now yield much more rent, he wants to have the rent revised (increased). However, the court ruled that he had in fact agreed a rent reduction with the tenant by asking the same rent for a larger space and that at least five years must elapse before the rent can be revised again. The lessor then misses out on many euros in rent. What is the exact situation?

As early as 1974, a retailer enters into a lease agreement for the rent of a retail property with accompanying storage space. In 2014, the property will be renovated, increasing the surface area of the retail space by 26 square meters. It is agreed that the rent will remain the same. In 2015, however, the owner finds out out through a real estate agent that, given the booming property market, his property could now yield tens of thousands of euros more in rent per year. This is also not strange now that the retailer has been paying only steadily more rent since 1974. The owner then asks for a rent review.

On the basis of Section 7:303 of the Dutch Civil Code, it is possible for a landlord (or tenant) to request a rent review. This means that every five years, since the last rent determined by the parties has started or has been claimed in court (or after the end of the first rental period), the current rent can be checked against the average rent of comparable business premises in the area and, if necessary, the rent can be adjusted accordingly.  The owner states that the rent was last adjusted in 2005. More than five years have elapsed since then, so the owner states that a rent review can now be carried out at a more market-based price.

The court ruled differently. Now that the refurbishment in 2014 has increased the retail space by 26 square meters, and the parties have agreed to leave the rent unchanged, a rent reduction has effectively been agreed, according to the court. After all, as a result of the expansion of the retail space, the retailer has paid no less than 15.5% less per square metre. Now that there has recently been a rent change introduced by the parties, the owner can only invoke the rent review from Section 7:303 of the Dutch Civil Code again after five years. Whether the rent has been increased or decreased in the past five years is irrelevant. In short, in this case the owner could not request a rent review again until 2019.

It is somewhat understandable that the owner made a mistake here. After all, the total rent was the same and did not seem to have changed. How could the owner have prevented this? The answer is quite simple. The owner should not have explicitly agreed with the retailer that the rent would not be increased. This concrete agreement is in fact the basis for the opinion that the parties have agreed on a reduction of the rent. The owner should therefore have requested a rent review immediately after the renovation without first agreeing with the retailer that the rent would remain unchanged.

As a landlord, do you want to request a rent review or are you, as a tenant, dealing with a rent review and do you have any questions about this? Please feel free to contact M2 Advocaten.

Lawyer Marius Rijntjes (rijntjes@m2advocaten.nl)

Paralegal Arjan Ang (ang@m2advocaten.nl)

sign for sale and for rent

Does Rent goes before Purchase even when part of the leased plot is transferred?

If splitting the lease leads to a sensible result, transferring part of a leased plot will result in splitting the original lease into two leases. This was recently the case in a Supreme Court case. It concerned the following case.

Of a leased plot with a surface area of 792 m2, a part with a surface area of 241 m2 will be transferred to a new owner. On this particular part there is a building built by the tenant.

The new owner terminates the lease and claims payment of the remaining rental instalments. The tenant takes the position that no lease has been concluded with the new owner and that he owes nothing to the new owner. This raises the question whether the rights and obligations from the lease have (partly) been transferred to the new owner.

It seems to follow from parliamentary history that Section 7:226 of the Civil Code (sale does not break rent) only applies in the event of transfer of the entire property and not in the event of transfer of part of the leased property.  However, the purport of Section 7:226 of the Civil Code is the protection of the tenant, which is that the tenant does not lose his enjoyment of the lease upon transfer of the leased property.

In view of this purport, the Supreme Court has ruled that the transfer of part of a leased property may result in the rent ratio being split into two (or more) leases. It will have to be assessed on a case-by-case basis whether such a division will lead to a meaningful result.

In the present case, the Supreme Court considers that the division leads to a meaningful result, in particular because the building constructed by the lessee is located on the part of the parcel of land that has been transferred. As a result, the transfer of ownership splits the lease into two leases.

Furthermore, the Supreme Court considered that if the lease is split into two leases, it will not be clear to the tenant which part of the rent he has to pay to his original landlord and which part to his new landlord.

The Supreme Court ruled as follows. As long as the tenant has not taken cognisance of the transfer, he will be able to pay the entire rent in full to his original lessor. After taking note of the transfer, this no longer applies. However, the tenant will then be entitled to suspend payment of the rent until the landlords have informed him how the rent is to be split.

Want to know more? Feel free to contact us.

Marius Rijntjes (rijntjes@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

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