Suppose you rent out a property above the maximum rent limit while this property is not actually in the free sector. Until when can tenants object to this rent and what are the consequences?
First, this: rent protection explained simply
To explain this properly, we’ll first explain to you again when tenants get rent protection. In the Netherlands, tenants ALWAYS get rent protection:
– from every2nd lease
-and/or after 24 months.
We’ll explain that to you in a moment.
From any2nd lease.
Suppose you rent out a property for the fixed term of 1 year. You like it with the tenants and after a year you decide to give the tenant a new fixed term contract for another 1 year. Currently, your tenants have rent protection and you can’t get the tenants out of your property if they want to stay put. And what if the tenants are still in it after 1 year and they haven’t gotten a new lease at all? Then the tenants also have rent protection. A lease does not have to be in writing (there is no “form requirement”). An oral agreement or a tacit renewal also counts as a lease.
After 24 months
The maximum term of the fixed-term lease without tenant rent protection is 24 months. If the landlord wants the tenants out, then the landlord must notify them by written notice no earlier than 3 months and no later than 1 month before the end of the lease that the lease will defenitly end. This seems odd because it is a fixed-term contract, but that is the law. Thus, a fixed-term contract NEVER ends by itself (unless the tenants themselves leave).
When can tenants no longer object to excessive rent?
Now we return to this main question. “When will tenants no longer be able to object to excessive rent?” You do this objection by having the rent “reviewed” by the Rent Commission. Now there are 3 scenarios:
- There is an indefinite rental agreement (a continuing contract)
- There is a fixed-term rental agreement (a fixed term contract)
- There was a fixed-term rental agreement, but it has now been converted into an indefinite rental agreement.
Objecting to rent in the case of an indefinite lease
For an indefinite lease (a continuing lease), tenants can object to the rent in the first 6 months of the lease. Once these 6 months have passed, the tenants can no longer object and there is free sector rent for as long as these tenants are renting the property in question. If the tenants do object and the rent assessment committee rules that the rent is non-liberalized (i.e. not enough rent points for the free sector), then the tenants only have to pay the rent that is determined by the housing assessment system. That’s a maximum of €763.47 per month in rent in the first half of 2022 at the currently applicable limit of 145 rent points. The landlord must then retroactively refund all overpaid rent to the tenants. By the way, if you want to know how to find out what the liberalization limit and the number of rent points are at the moment, read this blog ofours.
Objecting to rent on a fixed-term lease
Usually, when new tenants move in, landlords first give them a fixed-term lease. This can be any duration up to a maximum of 24 months. Sometimes you see a six-month contract, sometimes a one-year contract and often you see a contract for the maximum duration of 24 months right away. With a fixed-term contract, objections work differently. In this situation, the tenants can object to the rent up to 6 months after the termination of the lease.
An example: your property has too few rental points for the free sector. According to the rent point count, you are allowed a maximum of €750 in rent. Yet you are going to rent out the property for €1250 per month. The lease commences on January 1, 2022 for the duration of 2 years. On October 1, 2024, you give your tenants notice by registered mail that the lease is going to stop as of January 1, 2024. The tenants must leave the property, but can still object to the rent they paid at the Rent Commission until July 1, 2024. If the tenants are found to be in the right, then you as the landlord must retroactively repay all overpaid rent to the departed tenants.
Object to a lease that has been converted from a fixed term to an indefinite term
As already indicated: usually landlords start with a fixed-term lease. The moment a fixed-term lease is extended, it always changes into an indefinite-term lease by operation of law. Regardless of what you include in the lease.
The moment a lease is converted to an indefinite term, the tenants have 6 months from that moment to object to the rent. Once these 6 months have passed, the tenants can no longer object and there is free sector rent as long as these tenants are renting the property in question. If the tenants do object and the rent assessment committee rules that the rent is non-liberalized (i.e. not enough rent points for the free sector), then the tenants only have to pay the rent that is determined by the housing assessment system. That’s a maximum of €763.47 per month in rent in the first half of 2022 at the currently applicable limit of 145 rent points. The landlord must then retroactively refund all overpaid rent to the tenants.
An example:
An example: your property has too few rental points for the free sector. According to the rent point count, you are allowed a maximum of €750 in rent. Yet you are going to rent out the property for €1250 per month. The lease commences on January 1, 2022 for the duration of 2 years. You forgot to give timely notice of the lease, so the lease was converted to an indefinite lease by operation of law on January 1, 2024. Your tenants object to their rent at the Rent Commission on May 1, 2024. The Rent Commission will visit and conduct a rent review.
If the Rent Commission finds in favor of the tenants, then you as the landlord must retroactively repay all overpaid rent.
How do I know if my tenants have filed an objection with the Rent Commission?
Then, this. If your tenants file an objection with the Rent Commission, you will be notified of this at all times. This is because you, as the landlord, are also invited by the Rent Commission to be present during the rent review.
How long does it take the Rent Commission to reach a decision?
The Rent Commission takes about 9 months to come up with a report.
What about room rentals?
Room rentals are actually always social rentals (point rentals). That’s because a room is actually always a limited space and will always have too few square feet of living space to result in sufficient rent points. Or it should be a room of, say, 100m2, but that’s not very realistic.
Can I object to a rent commission ruling?
If there is a ruling from the rent commission, then you still have 8 weeks to file an objection with the subdistrict court.