NL: Preliminary questions on unfair rent increase clauses

 

In our newsletter of September last year, we wrote about a recent ruling by the Amsterdam District Court in which it was ruled that the agreed rent increase clause (in the case of renting out residential accommodation) is unfair on the basis of the European Unfair Terms Directive. This statement is not an isolated one. Since 2023, the Amsterdam District Court has a new policy regarding the assessment of rent increase clauses in residential rental agreements against the European Unfair Contract Terms Directive. According to the court, this review must be carried out ex officio, so also if the tenant does not invoke the directive or if the tenant does not appear in the proceedings. The clause is also annulled in its entirety if it is an "unfair" term. The clause is therefore also annulled if the term is only partially unfair.

The (financial) consequences of this ruling and this policy can be enormous for landlords. In the judgment we discussed, the rent increase clause consisted of two parts, an increase based on the consumer price index (the CPI) and, on top of that, the landlord had the option of increasing the rent by 5%. The Subdistrict Court ruled that the rent change clause is "unfair", which means that the clause is completely disapplied. The whole clause was therefore defeated. Whereas, in principle, a clause that explains how the adjustment of the rent is calculated and is based on the CPI is considered 'fair'. The consequence of this ruling is that the landlord has never been able to invoke the clause, the rent has been unjustly increased for years, the tenant has paid too much rent and the landlord cannot increase the rent in the future.

The Amsterdam District Court seems to be aware of the consequences of its ruling and its policy. Apparently, the court is also not entirely sure whether the approach is legally correct and has asked the Supreme Court preliminary questions (question about an interpretation of a rule of law).

The following questions have been put to the Supreme Court:

Question 1A: Can a rent increase clause in a lease agreement that provides for an annual surcharge on the rent of a maximum of 3% above the indexation under the consumer price index be regarded as an unfair term and what are the criteria to be applied in the assessment of this, or at least which points of view are important in this regard?

Question 1B: If a rent increase clause provides partly for an increase on the basis of the statutory scheme or for an increase on an objective ground such as a price index figure and partly for an additional rent increase that can be regarded as unfair, must the clause be annulled in its entirety, or is only the unfair part voidable?

Question 2: In the event of an unfair rent increase clause, does the liability for any increase lapse from the start of the lease and for the future?

Question 3: In such a case, even if the tenant has not reported to the proceedings, does the court itself have to check what has been overpaid from the start of the tenancy agreement and deduct that amount from the claimed rent arrears?

Question 4: Can the landlord invoke prescription if the tenant reclaims the overpaid rent increases?

Question 5: or is there another ground for limiting the period during which the tenant can reclaim the wrongly paid rent increases?

It is still unknown when the Supreme Court will answer these questions. We will keep you informed. Would you like more information about what may and may not be agreed (with consumers) or a check of your current contracts and (general terms and conditions)? We are happy to help you.

 

For further information, please contact:

Tim Boer, Partner

Labré advocaten, Amsterdam

e: tim.boer@labre.nl

t: +31 20 3052030

 

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