Property rentals

There are three main types of property which can be rented, each of which is governed by specific rules and regulations:

• residential property;
• retail premises and other commercial space which is accessible to the general public;
• other types of property.

Residential property is subject to the most stringent regulations. Tenants generally enjoy significant protection, although slightly less so in the case of fully furnished property and certain short-term rentals. A tenant can only be evicted in exceptional circumstances. Even if a tenant rents a home under a short-term tenancy agreement, there are circumstances in which that agreement will be automatically converted into an agreement for an indefinite period.

 

Where the initial rent exceeds a certain threshold amount, the property is deemed to be in the ‘deregulated’ sector whereby the standard rent control mechanism (a points-based system) does not apply. Landlord and tenant are free to agree an appropriate rent between themselves. The threshold amount is called the rent-control ceiling and is reviewed annually on 1 January.

 

Retail property is also subject to a degree of tenancy protection. In principle, a lease is for a minimum term of five years. The lessee has the option to renew for a further five years and is therefore assured of a tenancy of at least ten years.

 

Other types of property are subject to very few restrictions.

 

It is important that a lease or tenancy agreement includes all essential information, for example:

• the term and expiry date of the agreement;
• the exact specifications of the property concerned, including fixtures and fittings;
• the amount of rent payable, whether a rent increase may be applied, and if so when and how;
• whether improvements to the property will result in a higher rental charge;
• whether the lessee or tenant is entitled to purchase the property at the end of the lease period or tenancy, and if so how the price payable will be affected by rental payments made in the past;
• whether the lessee or tenant is permitted to make modifications to the property, and who is to pay what costs;
• how the lessee or tenant can be compelled to meet his obligations;
• whether sub-letting is permitted.

 

Almost all mortgage deeds include a ‘no-rent clause’. This means that as long as the property is subject to a mortgage, it may not be let to a third party without the bank’s prior express permission. Any violation of this restriction can result in the bank demanding repayment of the loan. And in case of a forced sale of the property, the lessee or tenant will be evicted.

 

The Vacant Property Act (Leegstandswet) allows certain categories of residential and other property to be let on a temporary basis, in which case some of the otherwise mandatory tenancy protection measures do not apply. Subject to permission from the local authority, you can rent out a residential property on a temporary basis for a minimum of six months, with a minimum of three months’ notice of termination by the landlord, and a maximum of one month’s notice by the tenant.

The local authority will only grant permission if:

• the property would otherwise stand vacant;
• the property is not listed for sale and cannot be let indefinitely;
• it can be established that the property will in fact be used for residential purposes;
• a written tenancy agreement is produced and signed.

 

Please contact us if you require further information about property rentals. We shall be pleased to offer advice.

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