Correct use of the right tenancy agreement model of utmost importance

Tenancy law governing residential properties is highly complex. This is mainly due to the high number of legal regulations and because many of them contain mandatory law. This means that if the tenancy agreement differs from the law, the party it suits – usually the tenant – may ignore the tenancy agreement and invoke the law. If two parties effect a tenancy agreement between them, this means that they cannot always be certain that what has been agreed is also legally enforceable.

Mandatory law
The reason for the enforceable nature of many legal regulations is that the legislator believes the tenant to occupy a weaker position in general compared to the landlord, leading to the tenant requiring (legal) protection. This legal protection chiefly governs termination of the tenancy agreement and the amount of rent.

Legislation changing constantly
Another aspect that makes tenancy law so complex is the fact that the law is constantly changing. Take, for instance, the points system used to calculate the maximum rent. This system was drastically altered under the second Rutte government: the value for the purposes of the Valuation of Immovable Property Act (WOZ) has been used in this system since 2015. In expensive areas (i.e. with high values for this act) this has led to many homes no longer coming under the points system. These homes may be let at market rents. It is therefore important that the tenancy agreement includes arrangements for regularly adjusting the rent to the market level (quite apart from annual indexation).

Temporary tenancy agreements
Another example of a recent far-reaching change to the law: since 1 July 2016, it is possible to let self-contained residential properties for a maximum of two years. Tenants enjoy no security of tenure in this type of tenancy agreement. If the landlord so wishes, the tenant has to vacate the property once the agreed tenancy period has expired. The two-year tenancy agreement does not need to be terminated. Yet the landlord does have to notify the tenant of the end of the tenancy in good time.

A special type of tenancy agreement needs to be concluded for this type of temporary let. Otherwise there is a risk of it involving a standard tenancy agreement, under which the tenant does enjoy full security of tenure.

Incorrect contract, major consequences
It is therefore of the utmost importance that the correct tenancy agreement is concluded in each situation. A tiny error can have major consequences. Let me give you a pertinent example.

A legal ruling from a few years ago involved the following case. A tenancy agreement stated a rent of €1,100 per month, including furniture, soft furnishings, kitchen appliances and washing machine. The basic rent and the amount for furniture etc. were therefore not listed separately. At the request of the tenant, in accordance with the law the rental assessment committee subsequently set the rent at €200 per month and the amount for furniture etc. at about €50 per month. The €200 per month was a legal punitive cut to the maximum legally-permitted rent on the residential property, which was €360 per month. The landlord had consequently got into financial difficulties (higher costs than rental income) and had turned to the courts. He demanded that the rent be adjusted to €360 per month and the additional costs to €240 per month. He invoked reasonableness and fairness and the right of ownership protected under the European Convention on Human Rights. He could expect little assistance from Dutch tenancy law. The judge did not rule in his favour.

This landlord made a major error in the tenancy agreement for which he ended up paying dearly but could easily have avoided.

A good contract is worth its weight in gold
Interhouse uses tenancy agreements that are drawn up and regularly updated by lawyers at Hielkema & Co, each time changes to the law require this. There are several models that have been further refined over the past 20 years and can be used in different situations, such as:

  • a standard tenancy agreement for an indefinite period;
  • a temporary tenancy agreement for a maximum of two years;
  • a temporary tenancy agreement in which at the end of the rental period the landlord will take up residency in the property and the tenant has to vacate it;
  • a temporary tenancy agreement under the Vacant Property Act.

Interhouse knows which model can best be used in which situation, and more importantly how it needs to be used.

Interhouse employees receive regular training to this end from lawyers at Hielkema & Co. Hielkema & Co attaches great value to its long-standing alliance with Interhouse.

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