COVID-19: Dutch government measures for residential properties

Below we examine the measures introduced by the Dutch government to help tenants of residential properties.

No evictions or mortgage enforcements up to 1 July 2020

A joint statement agreed on 7 April 2020 between the Dutch government’s Minister for Environment and Housing Minister van Veldhoven, the Dutch Banking Association (de Nederlandse Vereniging van Banken), the National Mortgage Guarantee (de Nationale Hypotheek Garantie), the Association of Insurers (het Verbond van Verzekeraars) and the Association of Homeowners (Vereniging Eigen Huis) stated that there will be no evictions or mortgage enforcements up to 1 July 2020 for residential tenancies. This is an agreement between the above parties and not a legislative enactment.

The statement ensures that:

• there will be no non-consensual house sales before 1 July 2020, apart from very limited exceptions such as the tenant carrying on illegal activities; and
• mortgage lenders will collaborate with homeowners/borrowers for practical solutions such as the deferral of mortgage payments.

Homeowners are expected to proactively seek financial support from municipal, tax or, insurance authorities such as the Employee Insurance Agency (Uitvoeringsinstituut Werknemersverzekeringen).

The Temporary Act on Extension of Temporary Tenancy Agreements

The legal framework for temporary tenancy agreements under the Dutch Civil Code (DCC)

Under section 7:271, para.1 of the DCC, temporary tenancy lease agreements may be concluded without the tenant enjoying rent protection/security of tenure:

• for a maximum period of two years in respect of self-contained accommodation, trailers and pitches; and
• for a maximum period of five years in respect of non-self-contained accommodation.

In order to terminate the tenancy agreement, the landlord must notify the tenant in writing, giving notice of a minimum of one month and a maximum of three months. 

If these notice timelines are not adhered to, the tenancy agreement will be automatically continued for an indefinite period with the tenant enjoying full rental protection/security of tenure under the terms of the agreement.

The rationale for the Temporary Act on Extension of Temporary Tenancy Agreements

Acknowledging the practical and social distancing difficulties of moving properties during the current pandemic, Minister Van Veldhoven for Environment and Housing introduced the emergency Temporary Act on the Extension of Temporary Tenancy Agreements (the 'Temporary Act'), which was submitted on 6 April 2020. This was enacted by the Dutch Parliament on 16 April 2020.

The Temporary Act extends temporary tenancy agreements within the meaning of section 7:271, para.1 of the DCC without creating rental protection for tenants.

The scope of the Temporary Act

Material scope: exclusively applicable to fixed term rentals for residential accommodations within the meaning of section 7:271, para.1 of the DCC

The Temporary Act applies to specific fixed-term tenancy agreements within the meaning of section 7:271, para.1 of the DCC, entered into:

• for a maximum period of two years in respect of self-contained accommodation; and
• for a maximum period of five years in respect of non-self-contained accommodation.

The Temporary Act therefore does not apply to target groups contracts (doelgroepencontracten) within the meaning of sections 7:274a to 274f of the DCC, or short-term tenancy agreements (huurovereenkomsten naar zijn aard van korte duur) within the meaning of section 7:232, para.2 of the DCC.

Temporal scope of the Temporary Act

The Temporary Act applies to tenancy agreements ending between 1 April 2020 and 1 July 2020 but also provides for the possibility of extending these timelines through an order in council, if required.

Since the corona-related measures came into effect in the Netherlands on 12 March 2020, the Dutch government is of the opinion that, if the tenant has been notified prior to 12 March 2020, the tenant already had time to look for other residential accommodation and therefore an extension of the tenancy agreement can only be agreed upon in consultation with the landlord.

How is an extension of the tenancy agreement under the Temporary Act achieved? 

The Temporary Act provides for both the tenant or the landlord to propose an extension of the tenancy agreement of up to three months until 1 September 2020.

The landlord must respond within one week of receipt of the tenant’s proposal to extend the tenancy agreement extension if they wish to object to the proposal. 

If the landlord does not, the tenant’s amendments are incorporated into the (amended) tenancy agreement.

Grounds for rejection by the landlord

The landlord may refuse the proposed extension of the tenancy agreement if the landlord:

• has sold the property to a third party and undertaken to transfer the ownership of the residential accommodation to that third party free of that tenancy;
• has relet the property and the new tenancy arrangement has started;
• wishes to occupy the property and has no other residential accommodation;
• wishes to renovate the property, which cannot be done without terminating the current tenancy agreement, and has undertaken with third parties to make the accommodation available unoccupied; or
• wishes to demolish the property and has provided an undertaken to third parties to make the accommodation available unencumbered by tenancy or other rights of use.

The landlord will need to show they entered into these commitments before 1 April 2020, and require the lease to end and the property to become unoccupied.

Within one week from receipt of the tenant's request, the landlord may refuse in writing to agree to the extension of the tenancy agreement on the ground that the tenant has not behaved as befits a good tenant (eg criminal activities, nuisance). This is a common reason to terminate a tenancy agreement.

Tenant’s court remedies for extension of the tenancy following landlord’s rejection 

The tenant may ask the court to extend the tenancy agreement if the landlord refuses to grant an extension.

The court will consider all relevant facts and circumstances and the interests of both parties. It will grant the tenant’s request if the landlord has wrongfully invoked one of the grounds for refusal or considers that the tenant's interests should prevail in this case. 

Factors that will be taken into account include whether the tenant has been able to look for other residential accommodation in the current circumstances. The court also has the power to extend the tenancy agreement by a different time period than requested.

Decisions by the court are not subject to appeal.

The National Mortgage Guarantee extends support to homeowners during the corona crisis

On 22 April 2020, the National Mortgage Guarantee (de Nationale Hypotheek Garantie) (the NHG) published a statement that extends support to homeowners/borrowers.

All homeowners who have taken out a mortgage with NHG and who are unable to bear the mortgage costs due to the corona crisis are allowed to have mortgage arrears of up to 9 per cent of the original mortgage amount, while still retaining NHG.

Mortgage lenders can offer houseowners solutions, while still maintaining the safety net offered by the NHG. Granting and repaying arrears will be on the basis of an agreement between the mortgage lender and the houseowner/borrower.