Dutch Senate supports Fixed-Term Lease Contracts Act: What does this mean for tenants and hosts?

The Dutch senate has approved the Fixed-Term Lease Contracts Act. We have actively been lobbying in the interests of students and Homestay rental, and with success!

It took a while, but the Dutch Senate has also approved the Fixed-Term Lease Contracts Act. This law is designed to provide tenants with more security and better protect their rights. This is good news for tenants, but it raises the question: 'Will I still be able to rent out a room temporarily in the future?'

The answer is yes. With the current housing shortage, it is important that we encourage Homestay rentals, especially for students. That's why we have been advocating in The Hague for exceptions for students and Homestay rental in recent times. And with success! In this blog, we will explain what this law means for tenants and landlords.

Background of the law

This private members' bill, drafted by Members of Parliament Nijboer (PvdA) and Grinwis (CU), aims to limit temporary lease contracts. The law proposes to make fixed-term lease contracts for an indefinite period the norm again, providing tenants with more security and better protection. Although exceptions are still possible (more on that later), this decision marks a significant shift in the Dutch rental market.

The law was already passed by the Parliament in May 2023, but the Senate was the final hurdle. Due to the BBB withdrawing its support at the last minute (after voting in favor in the Parliament), the fate of the law depended on the CDA. Initially, there were doubts there as well, but after the Senate adopted a motion from the CDA, the faction eventually agreed.

Exception for renting to students

In the current bill, an amendment has been adopted stating that temporary lease contracts should not be the norm but can be used if a justified interest exists. This means that certain groups can still enter into temporary lease contracts. The effect of this amendment will be decided by governmental decree, which is currently under revision. In this decree the exact groups will be defined.

One of the groups that are proposed to be included are international students and possibly also Dutch students or people who temporarily work in another municipality within the Netherlands. If the governmental decree is accepted, it means that temporary contracts will continue to be allowed for international and possible also for Dutch students.

In addition, exceptions have been made for tenants coming from social housing or experiencing a social emergency situation with an urgent housing need. The lease can also be terminated if someone wants to move back into the property after staying abroad or wants to let close family members reside in the property.

Expanding possibilities for Homestay rental

The CDA had expressed concerns that the abolishment of temporary lease contracts would hinder Homestay rental. After a motion submitted by the CDA was adopted, the party eventually agreed. This motion calls on the government to investigate how the possibilities for Homestay rental can be expanded, for example by extending the trial period from 9 months to 2 years.

It should come as no surprise that we at Hospi Housing are strong advocates of expanding the possibilities for Homestay rentals. Since our start in 2019, we have been working towards fewer regulations and more promotion of this form of housing. We have ensured that Homestay rental is permit-free in almost all municipalities, that more housing associations allow Homestay rental, and that the national government actively promotes Homestay rental.

Impact on tenants and landlords

Since 2016, temporary lease contracts were promoted to increase the private rental market, but this did not have the desired effect. Tenants often experienced stress and uncertainty, knowing that they could end up on the streets or face rent increases after a temporary contract of two years.

The approval of the law means that new lease contracts will generally be for an indefinite period now. For tenants, this means more security and stability in their housing situation. They are better protected against frequent moves and unexpected rent increases.

For landlords, this law may require some adjustments. It is important to stay informed about the new rules and ensure that lease contracts comply with legal requirements. At the same time, exceptions for specific situations - such as renting to international students - most likely continue to be allowed, and the law emphasizes the importance of Homestay rental.

Which contracts can I use as a landlord?

Even after the law comes into effect, as a host, in some cases you can still choose from two types of contracts: a fixed-term contract and an indefinite-term contract, with the first 9 months serving as a trial period. In another blog, we will provide more information about these different types of contracts and which one is most suitable for your situation. If you have doubts or questions, always reach out to Hospi Housing for personal advice.

Effective date of the law

The law will come into effect womewhere in 2024 and will apply to new lease contracts. Existing temporary contracts can continue to exist. More details about the exact implementation and effective date will be announced later.

We will continue to keep you informed about developments in The Hague and changes in laws and regulations. If you would like to have a personal conversation, please sign up here for a time that suits you!