For houses with a considerably high rental price (710+), different rules apply and landlords have more freedom te ask a certain rental price or increase. These houses are considered to be in the ‘free market’.
A ‘free market’ rental contract?
In order to determine if your rental contract follows the regular rental protection tenants have, or whether these different rules apply you should find out if your rental contract is ‘liberalized’. Only liberalized contracts fall in the free market. Rental liberalization means that a landlord has a lot more freedom to determine the price of the rent and the rent increase to be implemented. The maximum rental price limits do not apply to liberalized rental contracts and the landlord is not bound by the annual maximum rent increase percentage.
A liberalized contract exists if the basic rental price is above the liberalization limit that applies at the start date of the rental contract. The basic rent is the price you pay for the use of your apartment, excluding the costs for utility costs and other services provided by the landlord. A contract for a room (a rented accommodation with a shared kitchen or a shared toilet) can never be liberalized.
What is the liberalization limit?
Every year the government determines what the liberalization limit is. Below you will find an overview of the liberalization limits as they applied in the relevant years:
|From 2015||€ 710.68|
No maximum rental prices in the free market
There is no maximum rental price limit for a liberalized rental agreement. This means, in short, that the landlord can ask any rent that he wants. The market determines, let’s say, the rent.
The maximum percentage for rent increase does not apply
For regular rental contracts, a landlord is allowed to increase the rent once per year with a percentage set by the government (please note that this is only allowed if he charges a lower rental price than the legally permitted maximum!). This maximum percentage does not apply to liberalized rental contracts. For these contracts the landlord can increase the rent by the percentage agreed upon in the rental agreement.
The Rental Committee (Huurcommissie)
If a tenant and a landlord of a liberalized rental agreement have a dispute about the reasonability of the rental price or about the service costs overview provided by the landlord, they are not able to start a procedure at the Rental Committee. The Rental Committee is not allowed to take decisions regarding free market contracts.
The landlord or tenant of a liberalized contract have to start a procedure at the subdistrict court if they want a verdict about a certain legal subject. The only exception to this rule is the situation in which the rental contract states that the Rental Committee is allowed to make a verdict upon this specific contract.
Exception 1: Start a procedure in the first six months of your rental contract
A tenant can ‘escape’ a rental liberalization by starting a procedure at the Rental Committee within the first six months of his rental contract. The Rental Committee will then decide what the maximum rental price is for the rented property. This is done on the basis of a legal point system. If the Rental Committee decides that the maximum rental price is below the liberalization limit of € 710.68, then the rental price will be reduced retroactively. As a result the rental agreement is not liberalized and this way the regular rental protection rules will apply to the rental contract.
Lisa is renting an apartment with a basic rental price of € 800,= per month, starting the 1st of September 2018. After four months, at the beginning of January 2019, she asks Frently to start a procedure at the Rental Committee to reduce her rental price. The Rental Committee decides that the maxium permitted rental price of her apartment is € 600,= per month. As a result Lisa’s rental price is reduced retroactively. At the 1st of September 2018 the liberalization limit was € 710.68. Since € 600.= is below the liberalization limit, Lisa’s contract is not liberalized and therefore the regular rental protection rules apply.
Exception 2: Temporary contracts
In the case of a temporary rental contract, a tenant is able to start a procedure at the Rental Committee up until six months after the end of this rental contract.
Henry is renting an apartment with a basic rental price of € 1.000,= per month, starting the 1st of January 2018. He has a temporary rental contract of one year that is not automatically extended after the year expired. After thirteen months, at the beginning of February 2019, he asks Frently to start a procedure at the Rental Committee to reduce his rental price. The Rental Committee decides that the maxium permitted rental price of his apartment is € 700,= per month. As a result Henry’s rental price is reduced retroactively. At the 1st of January 2018 the liberalization limit was € 710.68. Since € 700,= is below the liberalization limit, Henry’s contract is not liberalized and therefore the regular rental protection rules apply.
Exception 3: All-in rental prices
Rental contracts that mention an all-in rental price can never be liberalized. Therefore the regual rules of rental protection always apply to these type of contracts. No matter the price.
Tom is renting an apartment with an all-in rental price of € 1250,= per month, starting the 1st of January 2010. At the beginning of March 2019, he asks Frently to start a procedure at the Rental Committee to reduce his rental price. At the 1st of January 2015 the liberalization limit was € 647.53. Since Tom’s rental price is an all-in rental price, there was no basic rental price known at the beginning of his contract. For this reason his contract is not liberalized and therefore the regular rental protection rules apply.
A lot of contracts are in the free market although they should not be!
Unfortunately, it is very often the case that a landlord unlawfully charges a rent above the liberalization limit in order to prevent a tenant from being able to reduce his rent after the six months period has passed. Therefore it is very important that whenever you found a new apartment, you contact Frently to check the maximum permitted rental price as soon as possible.
Do you pay more than € 710.68 basic rent? And are you still within the first six months of your rental agreement? Or do you have a temporary contract? Contact Frently to see if your rental price can be reduced!