6 most common mistakes in rental contracts (Tenants and Landlords of homes and apartments)
Our Dutch rental law lawyers in Amsterdam (Landlord-Tenant lawyers) represent landlords and tenants facing a broad range of legal issues. We are often confronted with the fact that both tenants and landlords are insufficiently aware of their rights and obligations. Even many rental agents (verhuurmakelaars) seem to have insufficient knowledge of Dutch rental law. The Dutch Civil Code has many mandatory provisions. It is not legally possible to deviate from these provisions. Many rental contracts contain clauses which are in conflict with these mandatory provisions. That means that these clauses cannot be invoked in a legal procedure in The Netherlands. This leads to several legal problems.
Impossible to terminate the rental agreement
Landlords are at risk of being confronted with unwanted surprises. E.g. It often happens that temporary rental agreements are automatically converted to rental agreements for an indefinite period. This makes it impossible for the landlord to terminate the rental agreement. At the same time, tenants are often unaware of their legal rights. This may cause them to pay too much rent or to agree with the termination of the rental agreement even though there is no (legal) reason to do so. In this article our Amsterdam lawyer specializing in Dutch rental law will give an oversight of the most common mistakes in Dutch rental agreements and landlord tenant conflicts.
The rental price is too high
The ‘Woonbond’ (Dutch housing association) (link: https://nos.nl/artikel/2277509-woonbond-300-000-huurders-te-duur-uit.html) has estimated that 300.000 people in the Netherlands pay too much rent. Both landlords and tenants often are not aware of the fact that in certain cases a maximum rental fee is attached to a specific property.
Landlords are not completely free to decide what price they charge for a rental house/apartment. In the Netherlands each rental house, apartment and room is rewarded with a certain score. This score is based on several factors, such as:
- The (WOZ) value of the property;
- The number of rooms;
- The size of the rooms;
- The facilities (bathtub, heating, etc.).
A maximum rental price is connected to each score. When a room or a(n) house/apartment with a maximum score of 140 is let a landlord is not allowed to charge a higher rental price than the price connected to the score. The aforementioned properties are qualified as social housing properties (sociale huurwoningen)
However, if the score of the apartment/house is higher than 140 the landlord is free to decide the what rental price he/she charges. These properties are qualified as free sector housing properties (vrijesectorwoningen).
The scores of houses, apartments and rooms can be calculated on the website of the Huurcommissie (link: https://www.huurcommissie.nl/en/onderwerpen/huurprijs-en-punten/). If the charged rental price exceeds the maximum rental price of a property the tenant can demand a decrease of the rental price at the Huurcommissie.
The landlord charges an all-in rental price
In the Netherlands landlords are not allowed to charge All-in rental prices. The rental price and the compensation for the service costs need to be separated. Landlords who apply an all-in rental price are at risk of receiving a significantly lower compensation from their tenant.
A tenant can propose a separation of the All-in rental price into a (separate) rental price and a compensation for the service costs. If the landlord does not agree with said proposal the tenant can request the Huurcommissie to determine the individual prices for the rent and the service costs (link:https://www.huurcommissie.nl/en/onderwerpen/rent-reduction). The Huurcommissie will often lower the total compensation for the rent and the additional services to 85% of original all-in rental price. Which means that a landlord will receive 15% less than before.
The service costs are too high
Landlords often cannot freely decide what price they charge for the additional services (such as electricity, internet, furniture, etc.) they provide.
In regards to so called Social housing (sociale huurwoningen) the service costs charged by the landlords need to correspond to the actual costs of the services provided. Since landlords usually charge an advance payment for service costs a yearly settlement of the service costs needs to take place before June 30th of the following year. This means that a landlord is required to provide an overview of the actual costs of the services to his tenant (e.g. by sending a copy of the utility bills). Afterwards, the difference between the advance payments and the actual service costs needs to be settled. Often times the charged service costs are higher than the actual costs which means that a tenant needs to be compensated by the landlord.
If the landlord declines to provide his/her tenant with an overview of the service costs, the tenant is able to start a procedure at the ‘Huurcommissie’ (social housing) (link: https://www.huurcommissie.nl/en/onderwerpen/rent-reduction)or the court (free sector).
The rules in regards to service costs for free sector housing (vrije sector woningen) are less clear. If the rental contract states that the service costs are charged as an advance payment the same rules as for social housing apply.
However, if the contract does not specifically mentions that the service costs are charged as an advance payment the aforementioned rules do not apply. According to a judgement from the Amsterdam court of appeals (2018) tenants and landlords of free sector housing have freedom to agree on the price for the additional services which the landlord provides. This allows parties to agree upon a price that deviates from the actual costs of the services provided.
An incorrect rental period
A property can be let for a temporary period. However, this is only allowed under strict conditions. The house/apartment/room can only be let for a maximum period:
- When a house/apartment (zelfstandige woonruimte) is let, the maximum rental period is 2 years.
- When just a room or part of a house/apartment (onzelfstandige woonruimte) is let, the maximum rental period is 5 years.
If the rental period mentioned in the rental contract exceeds the abovementioned periods, the rental contract is automatically converted to a rental agreement for an indefinite period. Rental agreements for an indefinite period are significantly more difficult to terminate than a rental agreement for a temporary period.
Extension of the temporary rental agreement
Rental agreements often determine that a temporary rental agreement will automatically be extended with another temporary period. E.g. a rental agreement for one year which is extended for another year, unless one of the parties terminates the agreement.
This is in conflict with the Dutch rental law. According to the Dutch Civil Code, it is not possible to extent a (regular) temporary rental agreement with another temporary period. If a temporary contract is extended it will be automatically converted to an agreement for an indefinite period. It is not possible to deviate from this rule. Once the rental agreement has been converted to an agreement for an indefinite period it will become a lot more difficult for the landlord to terminate the rental agreement.
Diplomat clause in Dutch rental contract
When a person who owns or rents a property is temporarily moving abroad they often want to (sub)let their property. In these kind of cases landlords tend to utilize a rental contract with a so called ‘diplomatclause’ to let their property.
Such a clause may offer the landlord the option to move back into his/her own home after the rental agreement expires. However, the diplomatclause is often applied incorrectly which means that the landlord cannot (longer) invoke the diplomat clause.
If it is not possible to invoke the diplomat clause, the rental agreement can only be terminated on the general termination grounds. It is significantly more difficult to terminate a rental agreement on the general grounds than by invoking a (correct) diplomatclause.
Conclusion on mistakes in rental contracts (Tenants and Landlords of homes and apartments)
Mistakes in rental agreements can have severe consequences for landlords since tenants gain a lot of protection from the Dutch rental law. This means that landlords are often confronted with unwanted surprises such as a severe decrease of the rental price or the conversion of a temporary rental agreement to an indefinite rental agreement.
Amsterdam Landlord and Tenant Lawyers
For tenants it is important to check whether his/her rental contract is in line with the Dutch law. If not, the tenant might be able to take legal action against his/her landlord. This might for example lead to a severe reduction of the rental price. We provide legal aid to both tenants and landlords. Are you a tenant and do you presume that your rental contract contains flaws? We can analyze your contract and, if necessary, take legal steps against your landlord.
Disagreements between tenants and landlords
Our Amsterdam team of Landlord and Tenant Lawyers can assist you with the following:
- Residential Landlord, Tenant Law and Agreements
- Landlord & Tenant Disputes
- Residential and commercial eviction
- Illegal Acts
- Litigation and all other legal matters relating to Dutch Landlord and Tenant Law.
Disagreements between tenants and landlords occur frequently in the residential and commercial real estate arena. Therefore, it is important for landlords to receive legal advice before they let a property. If you are in need of a Dutch lawyer, choose one with expertise in landlord-tenant matters. Our Amsterdam specialists have an in-depth knowledge of landlord tenant law. We can advise you on all matters regarding rental law. Has a conflict already arisen? Our Dutch rental law lawyers are also specialized in matters of litigation.
Contact our Landlord-Tenant lawyers in Amsterdam, The Netherlands
If you need advice or counsel regarding a landlord-tenant matter, call our Amsterdam lawyers 0031205221999.