Temporary leasing via the vacancy law
Please note! Contrary to recent reports in the media, rental brokers other than those proposed by the banks can also assist you in letting via the vacancy law. We can also be of excellent service here.
In the Netherlands, tenant protection is well-organised. The tenant derives rights from the Dutch civil code. This means that, in principle, it is not easy for a property owner to unilaterally terminate a lease agreement. The Vacancy Law makes it possible to temporarily let certain categories of properties and buildings, whereby a number of compelling rental protection provisions do not apply.
How does the vacancy law work?
Article 15 of the Vacancy Law provides the property owner with the option of temporarily letting out empty properties and buildings. The first paragraph of article 15 contains a list of cases to which the arrangement of temporary renting and letting applies. In all other cases, the arrangement of temporary renting and letting does not apply. The following housing categories can be rented out temporarily on the basis of the Vacancy Law:
• Living space in a property intended for sale which:
-Has never been occupied before (newly built house);
-has been fully or largely occupied by the owner in the twelve months before the property became unoccupied (or, where property was transferred less than a year ago, has been occupied by the owner ever since);
• In the ten years before the property became unoccupied, it has not been (fully or partly) rented out for more than three years
• Living space in a rental property intended for demolition or renovation.
• Living space in a building intended for communal housing, caring or nursing, provision of accommodation, administration and/or education, which is in anticipation of another purpose;
In the event of temporary renting and letting in accordance with the Vacancy Law, the rental protection provisions from the Dutch civil code are not applicable. However, the lease agreement must be entered into for a minimum period of six months, and a minimum notice period of three months applies for the property owner. For the tenant, the maximum notice period is one month.
Temporary leasing on the basis of the Vacancy Law requires a permit from the municipality in which the living space is located. The permit is valid for a maximum of two years. At the request of the owner or steward of the living space, the permit can be renewed one year at a time, but the total duration must not exceed five years.* The lease agreement is automatically terminated when the permit expires. When a renewal of the permit has been applied for, and no decision has yet been taken, the lease agreement will continue until a decision has been made. The permit must include information pertaining to the maximum rent. The lease agreement must be in writing and must clearly state that temporary leasing based on the Vacancy Law applies, and it must also state the term for which the permit has been granted, and what maximum rent is listed in the permit.
How do i apply for a vacancy law permit in Amsterdam?
You can apply for a permit for a temporary lease at the department for Housing, Care and Community (Dutch abbreviation: WZS). You can use the form for this purpose.
You will need to send the following; when a property intended for demolition or complete renovation is involved: a document indicating that the property is actually going to be demolished or completely renovated within two years. Permission from the city council in the form of a demolition or construction permit. In the event that the property is for sale:
– A valuation report detailing the free market value or a selling instruction to a broker.
– A document indicating you have not rented out the property for longer than three years over the past ten years.
– When a smaller property is involved, proof of awarded points may be additionally required.
WSZ will make a decision about your application within eight weeks. When you are granted the permit, it will be sent to you. It lists the maximum rent you are allowed to charge.** The permit is valid for two years. Upon expiry, it is possible to renew by one year at a time. The maximum period for temporary lease is five years. The permit allows you to rent out your property to any interested party. This is different for housing corporations. They are only allowed to let properties with a basic rental price of up to and including €681.02 to persons with an income of up to €34,229. Please note: the number of the permit and the period for which the permit is granted must be entered in the lease agreement. Costs: The permit costs €154.50 (tariff for 2012). This amount is payable when it is clear whether or not the permit will be granted. We are happy to assist you with the application and we generally get it granted more quickly than a private individual.
*The Dutch government intends to make it easier for property owners to temporarily let out a property which is for sale. This is for instance the case when you wish to buy a new house yourself or when you have already bought one. The plans are as follows:
– The property owner is free to determine the rental price in the event the property is for sale. At this point in time, the municipality sets the maximum rent in the permit it issues, and this price is determined by the points system for rental properties**
– Municipalities are not allowed to make demands on the temporary leasing of properties for sale not listed in the Vacancy Law;
– Properties intended for demolition and renovation may be rented out for a maximum of seven years, rather than the current five years. This is because restructuring projects have sometimes been severely delayed due to the economic crisis;
– Empty buildings without a purpose, such as office buildings may be rented out as living space for ten years instead of five years. This prevents vacancy where projects have been delayed due to the economic crisis;
– Property owners are allowed to apply for a permit for temporary lease more than once, provided that there is at least five years’ worth of regular occupation between both applications (by an owner-occupant or by a tenant with a normal lease agreement with rental protection).
Because of these plans, the Vacancy Law will be changed. This legislative proposal was sent to the Dutch Lower House on 11 October 2012. Once the Lower House gives its assent to the proposal, only the Senate has to give its assent. It is expected that the amendments will come into force on 1 July 1 2013. You can read the entire proposal here.
**For free sector properties, a maximum rental price to be determined by the municipality is not applicable.
To conclude: Some answers to frequently asked questions about the vacancy law:
Can only housing corporations use the vacancy law?
No, the owner of the property can apply for a permit. ‘Owner’ refers to the person authorised to make available for use a property or building. This may be a social or private owner, but it may also be a private property owner or project developer. In the assessment of what may be required from the owner, it may be relevant to know who this owner is.
Can only independent properties be temporarily let on the basis of the Vacancy Law?
The law refers to living space in a property or building. This means that independent properties (rooms) too can be temporarily let on the basis of the Vacancy Law.
What are the assessment criteria for the application used by the municipality?
The municipality tests the application according to the criteria from article 15 of the Vacancy Law:
a. The permit is requested for a living space category indicated in article 15, paragraph 1;
b. The living space is empty;
c. The owner cannot reasonably be expected to make the building or the property available for public housing in any way other than by entering into one or more lease agreements on the basis of the Vacancy Law;
d. The owner must demonstrate that the property for rent will be sufficiently occupied, taking into account the circumstances and options.
When do we refer to vacancy?
The definition of vacancy in the Vacancy Law is: ‘the disuse or disuse by virtue of a professional or personal right as well as a use with the apparent intent to undermine the workings of this law’. For the granting of a permit on the basis of the Vacancy Law, it is not necessary for the property to be unoccupied for a considerable amount of time, for example six months or a year. The mere fact of the property being unoccupied will suffice.
What to do if the prospective tenant is not yet known?
In the permit application, the identity of the prospective tenant must be provided. If this is not yet known, then it may be determined in the permit that the municipality will be notified of the tenant’s identity at a later date (for example by means of a copy of the rental agreement).
What can the tenant do in the event that the property has defects?
While determining the maximum rental price, the municipality may take into account (maintenance) defects present in the property. The tenant can also go the rent assessment committee if they notice defects and think the rent is too high. After all, the Implementation Act for rental prices of properties is in force here.
Who can draw up a list of points?
The municipality itself can draw up a list of points with the help of the appendix to the Decision Rental Rates for Housing. The municipality can also take a list of points drawn up by the owner as its starting point, or it can consult a rental broker or the rent assessment committee. In Amsterdam, a list of points is required for non-free sector properties in case of doubt. You need to supply this yourself. We cannot assist you with this.
Are there separate demands for the lease agreement?
The municipality may point out to the applicant that the lease agreement must comply with the following conditions:
a. The lease agreement must have a duration of at least six months.
b. The notice period for the tenant must not be longer than one month.
c. The notice period for the property owner must not be shorter than three months.
d. In any case, the lease agreement expires the moment the permit loses its validity.
e. The rent must not exceed the maximum amount which is determined in the permit. In the event that the tenant and the property owner agree on a higher rent, the rental price determined by the municipality and listed in the permit is applicable.
f. The lease agreement must be recorded in writing.
g. If applicable, the tenant must comply with the rules which are part of the local housing regulation.
How do I renew a permit?
The owner may apply for a renewal of temporary lease by means of an application form for renewal of temporary lease from VROM (Dutch Ministry of Housing, Spatial Planning and the Environment (Appendix II to the Regulation forms for Vacancy Law). The municipality may renew the duration of the permit by one year each time it is due. The law doesn’t stipulate anything about the number of renewals, but the total renewal is five years at most. The application for renewal of the permit is assessed in the same way as the original application for renewal of the permit, except for the vacancy requirement, needless to say.
What happens if the property is still occupied after expiry of the temporary rental permit?
When the property owner lets the tenant stay in the property when the permit for temporary lease has expired, a normal lease agreement arises. The property owner cannot rely on the exception to the rental protection. The property owner must be aware of this. There is no need for the municipality to enforce here!
Other forms of ‘temporary lease’
The tenancy law in the Civil Code assumes lease agreements of indefinite duration. The tenant can always cancel the rent, but the property owner is bound to a number of specific cancellation grounds when they want to cancel the rent. A form of temporary lease is the so-called ‘interim rent, where the property can be temporarily let and the original occupant (owner or tenant) can return to the property after a period of time (7:274 paragraph 1 sub b jo. Paragraph 2 Civil Code. Another form is renting to a special target group (handicapped people, elderly people, students/campus contracts), where the rent can be cancelled when the tenant is no longer part of that target group (7:274 paragraph 1 sub c jo. paragraph 3 sub b-c of paragraph 4 Civil Code). The use of a service apartment or care home, too, can be easily terminated. Anti-squatting does not involve leasing, but a usage agreement (loan agreement, 7A:1777 Civil Code). A lease relationship is not involved, as making the property available for use by the user does not require compensation here. As soon as compensation is required, leasing is involved. Reimbursement of expenses (costs of gas, electricity and water) is possible. Finally, there can be lease assuming use of living space, which, by its nature, is short-lived (7:232 paragraph 2 BW). Classic examples are the use of living space as a holiday home or temporary housing. In such cases, the tenancy law for living space is not applicable, so the rental protection is not applicable either. In the event of planned renovation or demolition, instead of temporary lease on the basis of the Vacancy Law, the rent of living space can be cancelled due to urgent personal use for renovation (7:274 paragraph 1 sub c jo. paragraph 3 sub a Civil Code), for the execution of a development plan (7:274 paragraph 1 sub e Civil Code), or when a municipal property for demolition is concerned (7:232 paragraph 4 Civil Code).