Unjustified rent increases in the free sector

The subdistrict court has previously ruled that some rent increases in the free sector were unjustified. This was because of an “unfair term” in the rental agreement. This stems from the European Directive on unfair terms in consumer contracts. The court announced in early October 2023 that it intended to submit so-called preliminary questions to the Supreme Court in two cases. The final questions are currently being submitted to the Supreme Court. This article will highlight the preliminary questions, following the article published by the Judiciary.

What are preliminary questions?

A preliminary question is a question of law by a court to the Supreme Court regarding the interpretation of a rule of law. This need may exist when the Supreme Court has not previously ruled on the issue in question. Thus, the Supreme Court only decides the question referred for a preliminary ruling and does not rule on the case. But the answer to the question often does affect the outcome of the case.

Content of the questions

A rent increase clause is a clause in the lease that allows the landlord to implement a rent increase. In two separate cases, the court submits five questions to the Supreme Court. These questions relate to the scope and consequences of nullifying such an unfair rent increase clause. Based on the views of the parties involved, an additional question is submitted to the Supreme Court. Namely, whether the rent increase clause should be considered unfair and the relevant criteria in this assessment.

The five questions

Below is a summary of the questions put to the Supreme Court by the Amsterdam court in this regard:

• Question 1A: Can a rent increase clause in a lease providing for an annual surcharge on the rent of up to 3% above the indexation pursuant to the consumer price index, be regarded as an unfair clause and what are the criteria to be applied in assessing this, or at least which points of view are relevant in this respect?
• Question 1B: If a rent increase clause provides partly for an increase based on the statutory regulation or an increase on an objective ground such as a price index figure and partly for an additional rent increase that qualifies as unfair, should the clause be annulled in its entirety, or is only the unfair part voidable?
• Question 2: Does an unfair rent increase clause void the indebtedness of any increase from the start of the lease and for the future?
• Question 3: In such a case – even if the tenant has not come forward in the proceedings – must the court itself check what has been overpaid from the start of the lease and deduct that amount from the claimed rent arrears?
• Question 4: Can the landlord invoke statute of limitations when the tenant reclaims the overpaid rent increases,
• Question 5: or is there any other ground to put a limitation on the period over which the tenant can reclaim the overpaid rent increases?

Conclusion

Pending the Supreme Court’s ruling on these questions, it is important for landlords to be aware of these developments. In addition, landlords should ensure that leases comply with applicable laws and regulations on this point in the meantime. It is unknown how long the Supreme Court’s ruling will take.

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