Affordable Rent Act passed by the Dutch Lower House - Drastic consequences for tenants and landlords!

Affordable Rent Act: what will change?

In short, the Affordable Rent Act brings, among other things, the following changes to the current rental law for housing:

• A housing category will be introduced that falls between the current regulated and liberalized housing: the medium-price category. This is the independent living accommodation that, based on the point allocation from the housing valuation system (WWS), corresponds to a maximum allowable rent between € 879.66 (the liberalization limit as of January 1, 2024) and € 1165.81 per month (the maximum rent limit for 186 points as of July 1, 2024) or if a starting rent price has been agreed upon that lies between these amounts. In principle, the same rent rules apply to this new housing category as to current regulated housing, subject to a few exceptions;
• Tenants of current deregulated housing will have greater opportunities to have their rent reviewed by the Rent Tribunal. They will no longer have to submit a request to this effect within six months of entering into the lease;
• The WWS will be revised, as a result of which, among other things, minus points will be awarded for low energy labels and the WOZ-cap will be updated;
• The landlord will be obliged to inform the tenant about the point allocation of the rented housing;
• The point allocation from the WWS will become mandatory for all independent accommodation with a point allocation of less than 187 under the Good Landlord Act and therefore enforceable under administrative law. If the rent is too high, the municipality can impose an administrative fine of up to €23,750 on the landlord for a first offense;
• The maximum annual rent increase percentage becomes administratively enforceable for all rental properties. For a rent increase above the percentage applicable to the property, the municipality may impose an administrative fine of up to €23,750 on the landlord for a first offense.

Adopted amendments: what else will change?

The following amendments were adopted by the Dutch Lower House on this matter:

• The review option of service charges by the Rent Tribunal will be extended to all housing tenants, including deregulated housing, whereas currently this is only the case for tenants of housing in the regulated sector;
• Landlords who are repeatedly ruled against in new proceedings before the Rent Tribunal will owe higher fees of successively € 700, € 1,400 and then the actual costs of the Rent Tribunal for the proceedings;
• The rent surcharge for national monuments in the WWS will be increased from 30% to 35%;
• The increased new construction surcharge of 10% on the maximum rent in the WWS will be limited to a term of twenty years;
• The application of the new construction surcharge of 10% will be extended to all new homes built before January 1, 2028, whereas this moment was previously January 1, 2026;
• It will be legally enshrined that poor energy labels lead to substantial downgrading of the home. For energy label E it concerns a point reduction of 4, for energy label F of 9 and for energy label G of 15;
• If the tenant and landlord agree on preservation measures and an appropriate rent increase to go with them, raising the property above 186 points, this does not result in the tenant's rent protection being eliminated.

What's next?

Importantly, many of these changes include so-called respectful transitional law. This means that these changes do not directly affect current rental agreements. However, if the rental property was rented for a rent above the current liberalization limit, while the property falls into the current regulated segment based on the point count, many of the new rules will still apply to the current rental agreement after one year.

The Affordable Rent Act in the form adopted by the Dutch Lower House also still requires the approval of the Dutch Senate before it can become law. The Dutch Senate does not have the ability to further amend the passed bill. It can only adopt or reject the bill.

Do you have questions about what the Affordable Rent Act will mean for you as a landlord? Then feel free to contact Alain de Jonge (06-20010584/a.dejonge@ploum.nl) or Anton van den Heuvel (06-51189793/a.vandenheuvel@ploum.nl).