This month, the Lower House passed the bill on good landlordism. One of the consequences of this bill is that landlords will be restricted in the amount of the security deposit when letting residential property. In future, landlords will only be allowed to charge two months' rent as a deposit for a property. Tenants must also be given more information about the amount and conditions of the deposit.

Purpose of the bill
The bill on good landlordism gives municipalities more opportunities to protect tenants from abuse. The bill provides a basic standard for good landlordism. What good landlordism entails is laid down in a standard with a number of general rules covering the entire rental process. These include preventing and countering discrimination and intimidation, the duty to put the tenancy agreement in writing and the duty to inform the tenant about some matters, such as the tenant's rights and obligations regarding the leased property. In addition, this law allows municipalities to impose a rental licence. Thus, municipalities can impose additional requirements on the landlord when it comes to the maintenance of the property and the maximum rent of regulated rental properties.

Earnings model
Many housing landlords see the security deposit as a revenue model. In this earning model, landlords abuse the way the deposit is settled and tenants' unwillingness to proceed to litigation. Tenants often withhold the deposit when the deposit is actually meant for repairing damage, for example, or tenants often have to wait a long time for a refund of the deposit. DENK MP Stephan van Baarle therefore came up with the proposal to have a maximum deposit laid down in the Good Landlord Act to protect tenants.

Current situation
At the moment, there is no statutory regulation that specifically addresses the requirements that a security deposit for housing must meet. Under current law, a deposit is allowed. To test whether the amount of the deposit is common, Article 7:264 paragraph 2 of the Civil Code is used to determine whether it is a non-reasonable advantage for the benefit of one of the parties.

Legislative amendment
Van Baarle's adopted amendment to the Bill on Good Landlordship sets a legal maximum on the security deposit: namely a maximum of twice the rent. Landlords must also actively inform their tenants about the amount of the deposit and repay the amount in principle within two weeks if the tenant leaves again. This period may be longer if there is damage to the property or if the tenant has not yet transferred the rent.

The proposal sees the addition of Article 261b in Book 7 of the Civil Code:

1. The tenancy agreement may stipulate that the tenant owes a deposit as security for what has been agreed in the tenancy agreement.
2. The deposit shall not exceed twice the rent referred to in Article 237(2).
3. The rental agency shall refund the deposit within fourteen days of termination of the rental agreement, unless
- there is damage as referred to in Article 218, in which case the lessor shall refund the remaining deposit within thirty days of termination of the tenancy agreement, after deducting demonstrable costs incurred to repair the damage;
- the tenant has not yet paid the rent due, as referred to in article 237, paragraph 2, service charges, as referred to in article 237, paragraph 3 or energy performance compensation, as referred to in article 237, paragraph 4, in which case the lessor shall refund the remaining part of the deposit within thirty days of termination of the tenancy agreement, after deducting these costs still due by the tenant.
4. The landlord shall notify the tenant in writing of a set-off as referred to in subsection 3, providing the tenant with a full cost breakdown.

Now that the Lower House has agreed to the proposal, the Upper House has yet to consider it.

Want to know more or have questions about security deposit or your lease? If so, please feel free to contact one of our lawyers without any obligation. We will be happy to assist you and keep you informed of further developments!