NL: The limits to renovation options for tenants

 

A slow flow in the housing market makes existing tenants creative. With modifications and renovations to the current rental home, a tenant can independently increase his enjoyment of living without having to look for a new home. In principle, the landlord must grant permission for such adjustments. If the landlord refuses permission, the persistent tenant can apply to the court for an authorization. This was also the case in a recent judgment of the District Court of Amsterdam, in which the tenant tried to enforce the construction of a dormer window through the courts (District Court of Amsterdam 19 July 2024, ECLI:NL:RBAMS:2024:5775)

Case:

The tenant of social housing had asked the landlord for permission to build a dormer window over the entire width of the top floor. With the dormer window, the attic could be inhabited by the daughter, who had outgrown her 6 m² children's room. Because it was difficult for the tenant to rent or buy another home, the change was the only way to achieve a better living situation. The change would add value to the home and would have no structural objections, according to the tenant. The expectation would also have been raised that the landlord would grant permission and the landlord had previously allowed dormer windows in the residential complex.

The landlord argues that the attic space has not been rented out as a living space and that there are indeed structural objections (for example, having to move the central heating boiler). The landlord fears a divestment due to the undoing of previous insulation measures and additional maintenance costs, without a house price change in return. After all, the landlord wants to continue to rent out the leased property as a rental property in the low-end segment in accordance with its objective as a housing corporation. With the expansion of the living space, the house might rise above the low segment, and the landlord wants to prevent that.

Legal framework:

A tenant may always make changes to the leased property as long as they can be undone without significant costs (Article 7:215 of the Dutch Civil Code). These changes do not require the landlord's permission. All other changes to the rented property do require permission from the landlord (in the case of accommodation, a decision must be given within eight weeks). If the landlord refuses this permission, the tenant can apply to the court for authorization to be able to make changes to the leased property. The court is obliged to grant the authorization if the modification does not harm the leased property and/or leads to a decrease in value. If the modification is necessary for efficient use and/or increases the enjoyment of the home, and if the landlord cannot raise any serious objections, the court may also grant the authorization. The landlord must then accept the change, as must the mortgage lender, if any. Please note: the tenant cannot request retroactive authorization for a change that has already been made.

As  can be seen from the case outlined above, an enforced authorization poses risks for the landlord. In addition to the arguments mentioned by the landlord, the landlord may be obliged to compensate the tenant for the addition of value to the leased property, the landlord's renovation plans (solar panels) may be thwarted and there is a risk of setting a precedent for other tenants. An enforced authorization for renovation can therefore have significant legal consequences.

Of course, it is preferable to reach an agreement with the tenant before initiating legal proceedings. There are a number of possibilities for this, for example agreeing to conditions such as a rent increase, including a guarantee for restoration to the original state or excluding compensation for the improvements made. Make sure that the contractual agreements are in line with the Housing Valuation System.
If the landlord does not agree to a proposed change, it is in the landlord's interest to clearly articulate this refusal. After all, the refusal and substantiation can be included in a later procedure.

Has the tenant initiated proceedings? Then it comes down to a weighing of interests, in which the judge looks favourably at improving the enjoyment of the tenancy. It is important for the landlord to demonstrate that the change will lead to a decrease in the value of the leased property and/or that it will harm the rentability. The landlord would do well to also claim an appropriate rent increase, should the court nevertheless approve the proposed change.

In the case cited above, the court rejected the tenant's claim. The main reason for this was the landlord's objective as a housing corporation, which obliges it to provide sufficient social housing. As a result of the expansion, the fixed costs and maintenance costs for the rental property would increase, while the landlord could not counteract this in view of its objective. Thus, the landlord could not be expected to agree to the proposed amendment. Because the change was also not necessary for the efficient use of the leased property, the court considered the interests of the landlord to outweigh the interests of the landlord in this case.

 

For further information, please contact:

Ramon Ridder, Partner

Labré advocaten, Amsterdam

e: ramon.ridder@labre.nl

t: +31 20 3052030

 

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