The Good Landlord Act: what changes have been made?
On 1 July 2023, the Good Landlord Act (hereinafter: Wgv) entered into force. The Act contains regulations for landlords of regular housing, landlords of accommodation for labour migrants and letting agents. The purpose of the Act is to prevent undesirable letting practices and protect house seekers, labour migrants and tenants.
The new law explains what is meant by ‘good landlordship’. The Wgv focuses on seven points that all landlords, letting agents and housing associations in the Netherlands must comply with.
- First, landlords should refrain from any form of unjustified discrimination. To this end, the landlord should use a clear and transparent selection procedure. When publicly offering housing or accommodation, the landlord should use and communicate objective selection criteria. The landlord should also justify its decision for the selected tenant to the rejected candidates.
- The landlord must refrain from any form of harassment. Efforts are being made to prevent landlords from charging excessively high rents, threatening not to renew a temporary lease or wrongfully not refunding the deposit.
- The deposit may not exceed twice the basic rent. In principle, the landlord is obliged to repay this deposit to the tenant within 14 days of the termination of the lease.
- The rental agreement must be in writing so that landlords cannot escape the legal rent protection regime.
- The landlord should also provide certain information to the tenant in writing, including the tenant’s rights and obligations in respect of the leased property and the contact details of a point of contact to which the tenant can turn in matters concerning the leased property.
- The landlord may only charge service charges by the legal rules on the subject. This is to prevent landlords from using service charges as a revenue model.
- The letting agent may not charge tenants double mediation costs. Currently, this is already prohibited, but on top of this, municipalities now also have the opportunity to actively enforce this.
Under the Wgv, municipalities are given various possibilities to take enforcement action against landlords. For instance, municipalities can institute a rental permit. Through a letting regulation, a municipality can introduce this permit obligation. A licence obligation can only be introduced for an area where this is necessary to protect tenants or to maintain liveability. Landlords must apply for a permit before letting, and in the case of existing leases, they have six months to still apply for the permit.
Order under penalty or administrative fine
Besides the possibility of establishing a rental permit, the Wgv provides municipalities with another far-reaching enforcement power. If the Wgv is breached by the landlord, the municipality can impose an order under penalty or an administrative fine. For a first violation of the law, a fine of up to €22,500 can be imposed. For a repeated offence within four years of the first offence, this fine can rise to €90,000. A third offence within three years may result in the landlord being obliged to hand over the property to the Municipal Executive.
In addition, every municipality must set up a hotline to report undesirable landlord behaviour. By 1 January 2024, municipalities must have the hotline operational. This hotline enables tenants in an accessible way to file a complaint about undesirable behaviour by their landlord. This makes the hotline a crucial pillar for municipal enforcement.
The Wgv strengthens the position of the tenant on the one hand and brings many obligations for landlords on the other. However, most of the rules of the Wgvv only apply to leases concluded after the date of entry into force of the Act. In contrast, the obligation to provide written information to tenants applies not only to new leases, but also to existing ones. Landlords must provide this information to all tenants by 1 July 2024. A one-year transitional arrangement therefore applies.
Do you have questions about drafting or amending lease agreements or other issues concerning lease law? Then contact one of our lawyers by mail, telephone or fill in the contact form for a free initial consultation. We will be happy to think along with you.