What does the Fixed Rental Contract Act entail?
As of July 1, 2024, a lot has changed in the realm of rental contracts. Previously, as a landlord, you could offer contracts for both a fixed term and an indefinite term. However, as of July 1, fixed-term contracts have largely been abolished, with some exceptions. Temporary contracts can no longer be offered. This article explains the fixed-term rental contracts law in detail and its implications for you as a landlord.
Definition of fixed-term rental contracts
To understand what the fixed-term rental contracts law entails, we must first look at the definition of fixed-term rental contracts. A fixed-term rental contract is an agreement between a tenant and a landlord for an indefinite period, with a minimum term, often at least 12 months. Unlike temporary contracts, a fixed-term rental contract is established for an indefinite period. Tenants have rent protection from day one.
A fixed-term rental contract offers tenants stability and security. It allows them to create a home and settle in a specific neighborhood or community. For landlords, there are also advantages, such as not needing to find a new tenant every 1.5-2 years. If you are satisfied with the tenant, it is beneficial that they can stay for an indefinite period.
Currently, there is still a contract known as the maximum 24-month contract (also known as type B). This is a contract for a specific period (with a maximum of 24 months, but it can also be shorter) with no minimum rental term. The tenant does not build up rent protection and must leave the property after this maximum period. The landlord then has the opportunity to re-rent the property or possibly sell it. This type of contract was created to ensure mobility in the housing market.
However, the fixed-term rental contracts law ends the possibility of temporarily renting out a property. Indefinite-term rentals will become the norm again. There are, however, exceptions.
Exceptions
There are a few exceptions where a temporary rental agreement can still be applied. The most important are:
Students who are studying in a different place than where they currently live. For example, if someone currently lives in Heemstede but will study in Haarlem, a temporary contract can still be offered. It is important that this person can provide a valid student ID.
Tenants who can no longer stay in their current rental property due to urgent work or renovations.
People with an urgent housing need. These are listed in Article 12, paragraph 3 of the Housing Act 2014.
When you, as an owner, want to temporarily rent out your own home because you are going abroad (for vacation or work).
Additionally, there remains the possibility in some cases to temporarily rent out under the Vacant Property Act.
The options for temporary rentals are becoming more limited. Are you unsure about the possibilities or the right contract for your situation? We can inform you about your situation and help you decide on the best contract to use.