Sale Of The Rented Property

The rule of thumb is: sale does not override lease. The new owner is bound to the existing lease agreement. Be extra alert when you need to transfer the rented property empty, because you have sold it in the meantime. Even when a tenant has agreed to cooperate in the empty transfer at sale, they can make things very difficult for you. A tenant is usually not required to leave the property, so, before signing the contract of sale, always have the tenant (and partner) sign a letter of cancellation in which the tenant declares they will leave the property before a certain date. Even more important: before renting out your property, check if the tenant can be required to vacate the property.

All-In Rent Is Prohibited

Please note: NEVER let out on the basis of an ‘all-in’ rent.. Even when the property is worth more than 143 points, the tenant can ask the rent assessment committee to create a separation between (basic) rent and service costs. In this case, the committee is to fix the (basic) rent at 55 per cent of the maximum rental price limit for the property, even if the property is worth more than 143 points, and can be let out for a price higher than €647.53. This rent deduction can never be made up.

Frequent Misconceptions Regarding Property Leasing

1. An expat is not entitled to the rental rights to which a Dutch person is entitled. Dit is niet waar. The law applies to everybody, so it also applies to an expat. A foreigner can exercise exactly the same rights as those of a Dutch tenant.

2. By renting the property fully furnished, I can charge a considerable amount of extra rent, enabling me to let out a property of less than 143 points for a commercial rental price. Dit is niet waar. You need to charge a rent based on the number of points. New furniture may be written off over a maximum of 60 months. This means that in exchange for renting out new furniture with a purchase price of €10,000, for example, you can charge an additional amount of up to € 167 per month. When the furniture is older, this amount is considerably lower, as the replacement value of the furniture applies in this case. In the event of leasing in the liberalised sector, make sure you create a breakdown between the (basic) rent and the compensation for furniture (and other goods and services), and that you do not set the rental price for furniture too high. Price protection applies to service costs and costs of rented furniture, and a tenant is entitled to claim back overpaid rent.

3. Fully furnished letting allows me to let temporarily. Dit is niet waar. Renting out property bears no relation to whether or not you are allowed to rent out temporarily.

4. I can use the service costs to considerably increase the basic rent. Dit is niet waar. Service costs for cleaning the staircase, or gas, water and electricity, for example, must always be assessed realistically and settled annually on the basis of the actual costs. As a property owner, you are required to provide the tenant with insight into these costs. You are not allowed to make any profit here whatsoever.

What You Must Remember

1. Many private properties have a mortgage. Most mortgage agreements contain a clause forbidding you to let out without (written) permission from the mortgage lender (rental clause). We shall not check with your bank, irrespective of whether or not there is permission. It is your own responsibility to arrange this permission (in writing) with your bank prior to letting out your property.

2. You must notify your insurer. Notify the insurer of the buildings, your inventory and any other parties of the fact that you are going to (temporarily) let out your property.

3. Check if you need prior permission from the Homeowners’ Association or from the Cooperative Association.

4. Verify with your tax advisor the fiscal consequences of renting out your property.

Temporary Hiring On The Basis Of The Vacancy

Temporary letting is also possible with a permit granted by the Mayor and the Executive Board of the municipality, based on vacancy law. You can request this permit when you fail to sell the property, for example. The property must be let for a minimum of six months. The permit is granted for two years with an option for a renewal of up to five years. In the event of temporary letting, a tenant cannot rely on rental protection on the basis of vacancy law. The lease agreement must comply with formalities which need to be strictly observed. The terms, too, must be taken into account. We can be of assistance here.

Do you want to know more about the vacancy law and how we can help you here? Then click on this link.

Temporary Rental And Property Caretaking

More often than not, a lease agreement for living space is a contract for an indefinite period of time, even if the agreement stipulates a term of, for instance, a year. Do you, as a property owner, want to arrange a temporary lease agreement with the certainty that the tenant will actually (have to) vacate the property upon expiry of the agreement? Then this obligation to vacate the property must be included in the lease agreement, and the original occupant must return to the rented property when the agreed lease has expired. This means that you can only temporarily rent out a property when you go abroad for a period of time, for example, and want to return to your property after this period. Or when you have bought a house which is not (yet) habitable, but it is after expiry of the lease. Providing tenants with opportunities to renew the lease makes your intentions to return to your property considerably less definite, and the options for achieving termination of the lease are considerably weakened as well. Should you decide not to return to the property after all, the tenant is no longer required to leave. The formalities that serve to provide you, as a property owner, with the best possible terms, require strict coordination.

Sub-Letting

If the tenant wishes to temporarily sub-let the property to a third party, permission from the property owner is needed. We do not supply sub-letting services.

Property Caretaking (Only For The Municipality Of Amsterdam)

Does your property score below 143 points and does it require a housing permit? Then apply for permission for property caretaking from the municipality before temporarily letting out your property; this also applies if you bought your property in the free sector at the time. This does not mean that the property can always be let out in the free sector (without a housing permit), not even if the property is not an investment but a purchase for personal use. It may be necessary in this case to apply for permission from the municipality for property caretaking. We can be of excellent service here.

Property caretaking can only be applied for once. The terms for which property caretaking applies vary in every situation. Below you will find an overview of the reasons recognised by the municipality of Amsterdam for granting permission for property caretaking (with the maximum term):

- Working or studying abroad (maximum of 2 years)

- Prolonged nursing care (maximum of 2 years)

- Prolonged travel (maximum of 2 years)

- Detention (maximum of 2 years)

- Trial cohabitation (maximum of 1 year)

- Repatriation (maximum of 1 year)

- Other compelling reason

Please note:

You must enter a rental price in the ‘application for property caretaking’, including a compensation for goods and services to be supplied. This way, the basic rent and the limit for the housing permit can be calculated. This information is not decisive in respect of your tenant. A tenant is always entitled to turn to the rent assessment committee to have the agreed rental price tested for reasonableness. The ruling of the committee (and, if necessary, of the sub-district court in the event of an appeal) determines the eventual rental price. In short, even though the municipality approves the lease for a certain rental price (including service components), you still run the risk of the tenant going to the rent assessment committee, and, depending on the points evaluation, successfully enforcing a rent deduction. We can give you advice with respect to the completion of this form.

Insurances

An important and often underestimated aspect is the insurance of the rented property. The owner should ensure the property is insured against fire or exterior damage (homeowners’’ insurance). Are you a member of a Homeowners’ Association? Then this insurance is organised by this association. Often, a so-called ‘rental clause’ is included in this insurance. This means that the homeowners’ insurance is also valid when you rent out the property. Carefully check this, and when in doubt, contact the relevant insurer. Are you not a member of a Homeowners’ Association? Then peruse your insurance policy and, if necessary, take out new or different insurance.

A fully furnished lease often involves ‘inventory insurance’ which may be mistaken for household insurance. With many insurers, the household insurance is not valid in the event of leasing, as this insurance is taken out in your name. The insurance can often be easily converted to inventory insurance, which is valid in the event of property leasing. Here too, we advise you to look into this beforehand with the help of your insurer, in order to prevent unpleasant situations. The tenant is responsible for the insurance of items they bring into the house.

Points System

We urge everyone to have property points counted before letting out a property. This way, you can build in the risk factors and you can determine whether or not you want to improve the property, enabling you to offer the property in the free sector. We have good experiences with reports by the companies listed below.

Duresta (It is also possible to request an energy label here)

Adres: Ukkelstraat 2a

5628 TE Eindhoven

085 - 40 111 66

info@duresta.nl

Ing H. Rinckes Huurzakenbureau

Burmanstraat 3/HS

1091SG Amsterdam

020-6939300

Beco Woonbemiddeling

Jekerstraat 41- hs

1078 LX Amsterdam

020-6646672 / 020-6764663

info@becowoonbemiddeling.nl

Assessment By The Rent Assessment Committee

The rent assessment committee is an independent body that makes decisions in disputes between tenant and property owner about, for example, rent increase, rent deduction or an annual settlement of service costs with regard to non-liberalised rental prices. The committee also passes judgement about any defects and rent deduction (as long as the defects have not been fixed). Tenants and property owners can turn to the committee with any questions pertaining to renting or letting property.

Source: www.huurcommissie.nl

Rent Assessment Committee

In theory, you are free to agree on any rental price with the prospective tenant. However, the tenant always has the right to have the agreed rental price assessed by the rent assessment committee within six months of the start of the lease agreement. If the rent assessment committee concludes that (based on the number of property valuation points) the rent is too high, the rent must be scaled back to the maximum rent level. In addition, the property owner must reimburse the tenant for the overpaid rent. It is possible to lodge a timely appeal against a verdict by the rent assessment committee at the sub-district court, even though it is also bound to the property valuation system. If the initial rental price is too high, the damage may amount to thousands of euros, aside from the question of whether or not a housing permit was required.

After six months of a property lease at a liberalised rent to the same tenant, the rent is liberalised and there are no longer any risks for you with respect to the rental price (please note: there may still be risks concerning the housing permit). This only applies if the rent has been calculated correctly and if you did not agree on an all-in rental price. We have the expertise to arrange this for you in the correct way.

Housing Permit

In grote steden, waaronder Amsterdam, geldt een Huisvestingsverordening. Goedkopere en kleinere woningen mogen niet verhuurd worden zonder dat huurder of gebruiker in het bezit is van een huisvestingsvergunning. Iedereen die zich hier niet aan houdt is strafbaar en loopt het risico dat de Gemeente In big cities, including Amsterdam, a housing regulation is in force. Cheaper and smaller properties cannot be let out if the tenant or user does not hold a housing permit. Anyone not complying with this regulation may be punished by law and runs the risk of receiving a cease-and-desist order or an administrative fine (in the future) from the Municipality of Amsterdam of up to €18,500, and for the tenant this amount is €340. This risk is to be avoided!

As of 1 January 2013, the system is considerably simplified. If you have a private rental property with a basic rent that is below the liberalisation limit (€681.02) you can rent out to anyone provided:

- The combined income does not exceed €43,000

- The tenant is over 18

- The tenant legally resides in the Netherlands.

Want to know more about how this is organised for the Amsterdam property market?

Then click here.

Additional Rent For Monuments

For properties registered as a monument or protected town or cityscape, additional rent may be charged. As a rule, you can add 30 per cent for a property with monument status and 15 per cent to a property falling under the protected town or cityscape scheme. In Amsterdam, for example, the sloping inner ring (all areas which are part of the Singelgracht) is classified as protected cityscape. Click here Click here to read more about this scheme.

Extra Points On The Basis Of The Energy Label

An adjusted valuation for insulation also applies as of January 1, 2012. You can apply for an energy label for your property on the basis of which you are awarded points. Of course, energy saving properties are awarded more points than properties which score lower in this respect.

Click here for an overview of points per label; contrary to what has been reported in previously launched plans, supplying a tenant with an energy label is not mandatory. Thus, for owners of small and well-insulated properties, it is certainly worthwhile having an energy label set up in addition to a points system.

The Property Valuation System / Points System

Throughout the Netherlands a valuation system for rental properties - also known as a points system - is used in order to determine the quality of the rental property. In brief, the maximum rent for cheaper and smaller, less luxurious properties is fixed using this system. Points are mainly awarded on the basis of surface area, quality and the energy label of the property in question.

Rental Price Liberalisation

If the initial rent (for lease agreements after 1 July 1994) is above the rental price liberalisation limit (this is the same as the maximum rental limit of the Housing Benefit Act), the rental price protection is largely non-applicable for the tenant. As of 1 januari 2013 , the limit is fixed at € 681,02 This rental price can be agreed upon if the property is worth 143 points or more. In this situation, parties are free to agree on the amount of the (basic) rent. There should be a breakdown between the rent and (the advance on) the monthly contribution for the Homeowners’ Association towards service costs. The service costs are to be paid annually on the basis of expenses actually incurred by the property owner. The rent may be increased once every twelve months.

Is the price below the rental price liberalisation limit? Then the tenant can commit the property owner to observe the maximum rent indicated by the property valuation system. See this tabel. A tenant of a property with a liberalised rental price is entitled to rental protection at the end of the lease period, and also if the property is fully-furnished or semi-furnished.

Extra points In Areas With Housing Shortages:

As of 1 January 2012, a property owner is entitled to a maximum of 25 extra points; these so-called "Donner points" (named after Minister Piet Hein Donner who introduced this piece of legislation) are valid in areas of housing shortages; these are areas where there is a high demand for housing, but where relatively few houses become available.

Rental properties in municipalities that are part of these areas are awarded a maximum of 25 extra rental points. Click here for a link to an overview of the areas with housing shortages.

A property with a WOZ value (valuation of immovable property) similar to or lower than €2,900 per square metre is awarded 15 extra points. A property with a higher WOZ value per square metre is awarded 25 extra points.

Property valuation:

In any case, properties in areas of housing shortage are awarded 15 extra points. In order to determine if the property will be awarded 25 extra points, you need to:

- Determine the most recent WOZ value of the property. This value is listed in the most recently issued WOZ decision, or can be requested from the municipality.

- Determine the surface area of the property. Please note: the surface area is determined using the property valuation system! Points system for independent housing Form

The WOZ value is divided by the surface area. An example of a property in Amsterdam: € 200,000 / 50 m2 = € 4,000. If this amount exceeds € 2,900, the number of points can be increased by a maximum of 25 extra points.