From 1 July 2024, significant changes have been made to rental law. Two new laws have come into force: the Affordable Rent Act and the Fixed Rent Act. What do these laws mean for tenants and landlords?

Affordable Rent Act

The Affordable Rent Act aims to ensure that rental housing remains affordable for middle-income households. Due to the housing shortage, high rents are regularly disproportionate to the quality of housing.

Housing rating system

To improve the position of tenants, the Affordable Rent Act regulates that the point system (Housing Rating System) will also apply to rental houses in the middle rental segment. This should ensure that tenants will pay an average of €190 per month less for their homes.

There will be three categories of rental agreements:
- social rent (maximum initial rent of €885.55; up to 143 points)
- intermediate rent (maximum initial rent of €892.08 to €1,165.81; 144 to 186 points)
- and the deregulated rental/free sector (initial rental price higher than € 1,172.31; 187 points or higher)

For all leases concluded on or after 1 July 2024, landlords must adhere to the maximum rent according to the point system of the Housing Rating System. This Housing Rating System is of mandatory law for tenants and landlords in the low and middle rental segment. From 1 January 2025, landlords are obliged to include a point system in new contracts.

In addition, the Housing Rating System will be modernised. For instance, energy labels will be weighted more heavily. Houses with energy labels A and B get extra points, while a lower energy label (E, F, or G) leads to a points deduction. In addition, the landlord may implement an appropriate rent increase if the house is made more sustainable and outdoor areas are better valued.

Rent review

Within six months of entering into the rental agreement, a tenant can submit the rental price to the Rent Commission for review. The Rent Commission will then test the property against the Housing Rating System. If the property does not fall above the liberalisation threshold, the rent will be reduced.

For existing rental agreements, the transitional law stipulates the following.
Houses that already fall below the liberalisation threshold already fall within the social sector and therefore also under the Affordable Housing Act. In these cases, the tenant can apply to adjust the rent according to the new Housing Rating System.

For houses with a price above the liberalisation limit, but which fall within the social sector in terms of quality, a transition period of 1 year applies (i.e. until 1 July 2025), during which the landlord must reduce the rent in accordance with the new point system. After 1 July 2025, if the rent is too high, the landlord risks a fine. In this case, the tenant can always go to the rent commission to have the excessive rent adjusted, in case the landlord has not reduced the rent by 1 July 2025. The tenant is then not bound by the six-month deadline.

For properties that belong to the middle rental sector in terms of quality and have agreed a corresponding rent, additional rent protection will only apply when entering into new leases. As this is a rental agreement from before 1 July 2024, the Affordable Rent Act for existing rental agreements does not apply to these middle rentals.

The new law therefore has far-reaching implications for landlords. A rental agreement entered into before 1 July 2024 may still fall under social rent.

Fixed Leases Act

With the entry into force of the Fixed Leases Act, a fixed lease has again become the norm. The conclusion of temporary leases that end automatically is, in principle, no longer possible.

Temporary housing leases can, in principle, only be terminated by mutual consent, by dissolution or by termination on limitative grounds (such as bad tenancy). A terminated lease will only end when the court has irrevocably decided so, unless the tenant agrees to the termination. This will make the route for termination almost the same as indefinite-term leases, the only difference being that a fixed-term lease will have the additional requirement that it cannot be terminated by a date earlier than the end date.

Exceptions

However, it remains possible to temporarily rent housing without rent protection to specific target groups listed in the ‘Decree on specific groups of temporary leases’, such as:
- Persons who want to live temporarily in another municipality within the Netherlands for their studies or are from abroad and are studying in the Netherlands;
- Tenants who have to live elsewhere temporarily due to urgent works or renovation;
- Persons coming from social care or in a social emergency situation with a demonstrably urgent housing need;
- Tenants with a second -chance- rental agreement;
- Persons who, as surviving relatives of a deceased tenant, cannot continue to rent the accommodation in which they had their main residence at the time of that tenant's death, pursuant to Section 7:268 of the Civil Code. (This also applies to children aged 16 and over whose parents die);
- Persons with one or more minor children, who no longer maintain a permanent joint household with the other parent of those children and who wish to continue living in the vicinity of their children.

Grounds for termination

Furthermore, a new ground for termination has been added for partners who start living together. Those who do not yet dare to sell may temporarily rent out the property. If the cohabitation fails, urgent own use can be invoked and if the cohabitation is successful, the lease can be terminated to sell the property rent-free.

In addition, the ground for termination ‘urgent own use’ has been extended.

The tenancy agreement may provide that the tenancy will be terminated if the property is needed after a certain period for a relative by blood or marriage in the first degree. Again, this must be agreed in advance and the termination will have to be ordered by the court. The judge will test whether the blood relative's interest outweighs the tenant's interest.

Current temporary contracts

Temporary leases concluded before the new law takes effect will continue until the termination date. In principle, the tenant must then move out. When extended, the contract becomes an open-ended contract.

Would you like to know more or do you have questions or need advice about 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!