Unfair lease terms: request for rent increase suspension denied

Recently, several courts have struck down so-called “unfair rent increase clauses” in residential rental agreements. Courts have ruled differently on the consequences of unfair rent increase clauses in rental agreements. Because of this diversity, the District Court of Amsterdam submitted preliminary questions to the Supreme Court. These questions were previously discussed in this article. Nevertheless, not everyone could wait for the answer to these questions and over five hundred tenants jointly started summary proceedings at the District Court of Rotterdam to suspend the rent increase from July 2024. This article will discuss this ruling.

‘Unfair rent clause’?

Recently, doubts have been raised about the way a significant number of landlords raise their rents. For example, many leases include a provision whereby the rent increases annually in line with inflation, plus a possible surcharge. This surcharge is often between 3% and 5% of the monthly rent. It is up to the landlord to decide whether to charge the surcharge. This very freedom of choice leads to ‘arbitrariness’ for tenants, according to the courts. This rent policy is considered ‘unfair’ and, according to the courts, would violate the European Directive on unfair terms in consumer contracts.

What is the case about?

Over five hundred tenants demand in summary proceedings that rent increases be suspended as of July 1, 2024 because of the aforementioned unfair rent modification clauses in their leases. The tenants believe that landlords should not raise rents until the Supreme Court answers the preliminary questions presented to it regarding these provisions. In addition, tenants demand that rent increases already collected by landlords as of July 2024 be refunded or offset against the next lease term.

No urgent interest

For a claim to be granted in summary proceedings, there must be an urgent interest. Cases in which a judgment on the merits cannot be awaited may be awarded in summary proceedings. The Subdistrict Court ruled that the tenants did not meet this requirement because they had not made sufficiently concrete what (urgent) interest each individual tenant had in suspending the rent modification provision. The tenants’ general assertion that many of them are at risk of financial hardship due to a rent increase announced or already implemented is too vague and, moreover, not supported by documentary evidence. It was the tenants’ responsibility to indicate, on a tenant-by-tenant basis, why, in their case, proceedings on the merits cannot be awaited, but they failed to do so. For this reason, the tenants’ claim cannot be granted.

Conclusion

For now, we must wait for the suspension of rent increases and the Supreme Court’s answers to the preliminary questions. This may perhaps be different if a tenant fleshes out his individual interests in suspending the rent modification provision.

Questions?

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