Published on: 5 August 2024

How to avoid a fine as a landlord

The previous administration rapidly changed the rental market dramatically. Very recently, as of July 1, 2024, two important new laws came into effect. These are the Fixed Leases Act, which makes indefinite term rent contracts the norm again, and the Affordable Rent Act, which means that the rental price for mid-rent properties no longer can be freely determined by the parties.

Because of these two new laws, which have been in the news a lot, landlords and property managers are in danger of losing sight of the duties contained in the Good Landlord Act (“Wgv”), which took effect July 1^st, 2023. This while the transition period for the Wgv for existing rentals has now expired and failure to comply with the duties can have far-reaching adverse consequences. My colleague and tenancy law specialist Koen Wanders previously wrote articles about these laws, click on the hyperlinks to read more about them.

Too often in our network we still see landlords who are not yet ready and do not comply with the obligations under the law. This while we already receive many requests from tenants who are well aware of what they are entitled to under the law.

In this article, therefore, as a warning, I explain through examples that there is work to be done if you are a landlord, even if you are a private individual with a pre-existing tenant.

Professionalization

The legislator’s goal in introducing the Wgv was to professionalize landlords and managers. According to the Dutch statistics office figures, some 1.2 million homes are rented out in the private sector in the Netherlands. The landlords of these homes vary widely in professionalism, but the vast majority of landlords (over 300,000 private individuals) rent out only 1 home.

Furthermore, the legislator noticed that there are sometimes distressing cases in the housing rental market, where landlords abuse their position of power by discriminating, intimidating their tenants, and tenants are unaware of their rights. The Wgv is designed to address those problems.

Landlords under pressure

However, the point is that it is not easy for all landlords to follow all the rules precisely. Getting a good grasp of what is not allowed, what is required, or what is necessary is an art in itself. Private landlords almost always have a busy job in addition to their role as a landlord, not to mention family. Being expected to act like a professional landlord is quite a burden.

It is no wonder, then, that the supply of rental housing in the private sector has recently begun a sharp decline. If you already have a tenant, it is far from always possible to get rid of them. Also, it is now often not possible to get rid of a rented property without serious damage. The Affordable Housing Act has also made it less lucrative to rent out a mid-rent property. As a result, there is less interest from investors in homes for rent.

Prevent a report, be proactive

Many landlords will have to deal with the new law. They will have to read up and act quickly and adequately. Many landlords work with old model contracts, which are no longer adequate. For example, old models usually do not take into account:

the fact that there is a maximum security deposit of two times the bare rent and the deposit (to the extent not retained) must be repaid within a period of 14 days; and
the rules regarding the application of service charges, including the price charged for providing the rented property furnished.

As of January 1, 2024, pursuant to the Wgv, a tenant hotline has been set up in all municipalities. There, tenants can file complaints against you if you do not comply with the duties under the Wgv. It is important to avoid being reported, because before you know it, your name will be on the cover of the file on the desk of a municipal enforcer!

Written rental agreement and disclosure

One of the pillars of the Wgv is that the landlord is obliged to inform the tenant of his rights. Pursuant to the Wgv, therefore, all rental agreements must be in writing. For most landlords, this is already the case.

What many landlords have not yet done is provide the mandatory information about the tenants rights. Now that the transition period for existing rentals is over all landlords really should have done so by now. If you have not yet provided your tenant with an information sheet you risk being reported by your tenant to the municipal hotline.

Rental Permit

The Wgv also introduced the possibility for municipalities to introduce a permit requirement for renting out houses. In Amsterdam, no Wgv rental permit is required, although there was already another permit requirement for renting out rooms if one dwelling is occupied by 3 or more persons who do not form a household.

However, a rental permit requirement has already been introduced in other municipalities. For example, Wgv rental permit is required in large parts of Leiden. In The Hague and Rotterdam, the rental permit is mandatory in the parts of the city where rental problems have been previously identified, for example in Laakkwartier Oost and West in The Hague and in Carnisse in Rotterdam.

In areas where the rental permit requirement was introduced, landlords of existing leases have/had 6 months to apply for a permit. For some cities that deadline has now passed, and for others the end of the deadline is fast approaching. If you rent without a permit in an area where you do require a rental permit, you are in violation of the law and risk being reported.

Need an update? Call right away!

The rules described in this article are not everything that is new and mandatory from the Wgv. If after reading this article you are concerned about whether you are properly complying with the new rules, don’t wait until your tenants file a report and the enforcers come knocking on your door. You may have already heard from your tenants.

Then call us right away, or fill out our contact form, and our experienced attorneys will help you get a grip on things. We will give you the tools you need to continue to fulfill your role as a landlord in accordance with the law. With the support of our tools and the opportunity to ask us questions, you will be up to speed within a day.