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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)

 

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

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)