Dutch Housing Market: 540 Tenants Challenge Rent Increase by CBRE and Nationale-Nederlanden

In a groundbreaking move, Dutch tenants take legal action to stop rent hikes, following recent court rulings against institutional investors. Stay updated with the latest developments.

A group of 540 Dutch tenants residing in non-rent controlled properties are taking legal action against CBRE and property manager Nationale-Nederlanden in an effort to prevent a rent increase scheduled for July 1. This marks the first instance of such a large group of tenants utilizing jurisprudence to challenge their landlords, as reported by the Financieele Dagblad. The Dutch tenants are seeking a court order to freeze their annual rent hike, citing recent rulings by district courts that have halted the practices of major institutional investors.

The dispute revolves around rental agreements containing a standard clause stipulating that rent will increase by inflation plus an optional percentage, typically ranging from 3% to 5% of the monthly rent, varying among landlords. Investors like Bouwinvest, Amvest, ASR, and Vesteda have faced legal defeats from tenants arguing that the annual rent hikes are unjust and violate European consumer protection regulations. Tenants claim that this has resulted in free sector tenants paying excessively high rents for years.

The Supreme Court is currently reviewing the arguments put forth by lower courts in favor of tenants. Until a ruling is reached, the tenants argue that they should not be subjected to any rent increases, capped by the government at a maximum of 5.5% this year. Lower courts have emphasized the need for a transparent explanation from landlords regarding the invocation of the optional clause, deeming the current situation unfair and non-compliant with EU consumer protection laws.

Landlords contend that the courts have overstepped by eliminating both the optional increase and the inflation-based increase. They warn that upholding this stance could result in significant financial losses amounting to billions of euros. Since 2021, the government has limited the maximum rent increase in the non-rent controlled sector to inflation plus 1% or the average salary increase plus 1%, whichever is lower.

The legal battle between tenants and landlords over rent increases in non-rent controlled properties highlights the ongoing struggle for fair housing practices and consumer protection regulations. The outcome of the Supreme Court's deliberations will have far-reaching implications for both tenants and landlords in the Dutch rental market.