As of July 1, 2024, the rules for (re)leasing residential property have changed. There are also developments in jurisprudence and in the tax field that affect landlords. Through this diptych, we inform you about them. In this first part we will discuss the legal developments. You can read the second part in the next Govers Signaal and on our website. In addition to the Govers Signal article, this website article highlights the long-awaited Supreme Court ruling on rent increase clauses.
Fixed rent contracts and affordable rent law
As of July 1, two new laws in the field of housing (rental) came into effect: the Fixed Lease Law and the Affordable Rent Law.
Starting point: fixed contract
The Fixed Lease Law stipulates that new residential leases are indefinite. However, temporary leases entered into before July 1, 2024 will remain valid. There are some exceptions to the law. For specific target groups, a temporary lease can be concluded for up to two years, for example for students, divorced parents or second-chance tenants. In addition, temporary leases based on existing exceptions remain possible, such as:
- Temporary rental under the Empty Homes Act,
- short-term rentals, such as vacation homes,
- target group contracts, where a property is rented to a specific target group. The contract can be terminated when the tenant no longer belongs to the target group (e.g. student or campus contracts).
Extended termination options
Under the Fixed Lease Law, the termination options are somewhat expanded. For example, after an agreed term, the landlord may terminate the rental in order to let the rental home be occupied by parents or children. Also, after an agreed term (of up to two years), the landlord may sell the property under certain conditions. This agreement may only be made once. For both termination options, this must be explicitly stated in the rental agreement, including a concrete term.
Maximization of rents and indexation
The Affordable Housing Act links rents to the housing assessment system (WWS). This WWS assigns points to a property based on factors such as surface area and energy label. The number of points determines the maximum rent.
- For homes up to and including 186 points (mid-rent homes), the maximum rent according to the WWS will apply to new contracts from July 1, 2024.
- For housing up to and including 143 points (social rental housing), existing contracts require the rent to be adjusted if it is incorrect. For new contracts, landlords must inform the tenant of the point calculation.
Furthermore, the annual increase in rent is capped and linked to the collective bargaining agreement wage trend.
Enforcement
Tenants can have the rent reviewed by the Rent Commission, which gives a binding ruling.
Tenants of social and mid-rent housing can also go to the Rent Commission for other disputes. Municipalities will have an enforcement role and must set up a hotline. From January 1, 2025, they can impose fines of up to €100,000.
Recent case law: rent increase clauses
In addition to all the developments mentioned above, 2024 saw much litigation over so-called rent increase clauses. These are provisions that give landlords the right, in addition to annual indexation, to increase the rent of a property by a certain percentage. According to several subdistrict courts, such a provision was an unfair clause. In that case, such a provision in a lease is null and void, and that has major consequences for landlords. The clause is then deemed to have never existed. A tenant could then reclaim years of overpaid rent from the landlord.
Clarity
On November 29, 2024, the Supreme Court, the highest court in our country, clarified this issue. A storage clause of up to 3% (on top of an annual indexation) is not an unfair clause, according to the Supreme Court. The landlord has an interest in such a clause to be able to compensate for cost increases that exceed inflation. The tenant can easily oversee the financial consequences of such a clause. While this may be different in individual cases due to additional circumstances, with this Supreme Court ruling, landlords generally no longer need to worry about having to roll back rent increases.
In conclusion
As you have read, as of July 1, 2024, a lot has legally changed for landlords. Do you want to know how these developments will affect your position? Contact your relationship manager, using our contact form on the website, or call our general phone number 040 - 2 504 504.