Good Landlord Act: an overview of the obligations that landlords of residential property must meet.

The "Good Landlord Act" (the "Wgv") has been in effect for some time now. As we wrote in our earlier blog, this law contains far-reaching obligations for landlords and rental intermediaries of living space to behave as 'good landlords'. In addition, the powers of municipalities under this law have been expanded to prevent and counter undesirable landlord behavior. On January 1, 2024, the last parts of the Wgv came into effect.

In this blog, we will provide an overview of the exact obligations that landlords of residential property must now comply with. This will include a focus on the most important parts that came into effect early this year.  

Rules of good landlordism

Applicable to whom?

The rules from the Wgv apply to all parties involved in the rental process of living space. These include (sub)lessors of regular living space, lessors of accommodation to labor migrants and letting agents. There is a limited exception for housing corporations. Unlike for "regular" parties, enforcement of the Wgv lies with the Housing Corporation Authority instead of the municipalities, and in the case of housing corporations a municipality has no authority to introduce a permit requirement. We discuss the licensing requirement later in this blog.

What rules?

Based on the Wgv, a landlord must at least comply with the following obligations (see Articles 2 and 3 of the Wgv):

Landlords should have a process to prevent housing discrimination‍

Landlords must have a practice when publicly offering a rental property to prevent housing discrimination. The practice must meet the following criteria:

• there should be a clear, transparent and non-discriminatory selection procedure. These should also be communicated when housing is publicly offered;
• the rejected prospective tenants must be explained why another tenant was chosen.

Since Jan. 1, 2024, the modus operandi has been:

• must be in writing;
• must be known to all and for this purpose must be made public in any advertisement of the housing offered or on the landlord's website;
• must be current/maintained by landlord and thus must be updated as experience in its use necessitates; and
• must be made known to employees of the landlord and/or broker.

Note: the ROZ has prepared a guide on its website that landlords can use when drawing up a transparent selection procedure.

There is a ban on (sexual) harassment

A landlord must refrain from any form of intimidation. This is already prohibited under criminal law, but based on the Wgv, it has now also become possible for municipalities to take action against landlords guilty of harassment.

The rental agreement must be in writing

Although it remains possible under private law to enter into an oral lease, it is the landlord's duty to put these oral agreements in writing.

There is a maximum security deposit of two months' bare rent

The amount of the security deposit may not exceed two months' bare rent. The landlord must repay the security deposit within fourteen days of the end of the lease, unless there is (i) a delay in payment of the rent, service charges and/or the energy performance fee and/or (ii) uplift damage. Note that only the aforementioned cost items may be deducted from the security deposit by the landlord. The remainder of the security deposit must be repaid by the landlord within thirty days of the end of the lease, in which case there is then an obligation to provide a full cost breakdown.

There is a prohibition on charging double mediation fees to the tenant

If the landlord works with a rental agent, the landlord must pay the brokerage fee. The rental agent may not also charge these costs to the tenant.

Landlord is prohibited from charging service charges in any manner other than as required by law

The landlord may only charge the service charges as mentioned in Articles 7:259 and 7:261 of the Civil Code (see the Service Charges Decree for which services may be charged in any case). Furthermore, the landlord must provide a full cost breakdown annually and only the actual costs incurred may be charged through the service charge. Thus, no profit may be made.

There is a duty of information on landlord

The landlord, insofar as they are not already included in the lease, has a duty to provide written information to the tenant in a clear and understandable manner about his legal rights and obligations with respect to the leased property. These include:

• the legal rights and obligations with respect to the leased property;
• the contact information for the municipality's hotline (more on this later);
• the contact details of a contact point to which a tenant can turn in case of questions or problems related to the leased property;
• in the case of a security deposit, the amount of the security deposit, the manner and periods in which, upon termination, the tenant's claim against the landlord with respect to the security deposit shall be determined;
• The tenant's payment obligation with respect to the application of service charges; and
• Article 1 of the Good Landlord Regulations lists a number of other topics on which the landlord must provide tenant information.

Note: the ROZ has published on its website a "template for the provision of information under the Good Landlord Act," through which this information requirement can be met.  

This information requirement applies not only to leases entered into after July 1, 2023, but also to leases entered into before July 1, 2023. For the latter category of leases, based on transitional law, the required information must be provided to the tenant no later than July 1, 2024.

Additional requirements when renting to migrant workers

When renting to migrant workers, the following two additional requirements apply:

• the rental agreement must be recorded separately from the employment contract. The purpose of this requirement is to make the migrant worker less dependent on the employer in terms of housing; and
• the landlord should ensure that information is provided in a language preferred by the migrant worker, unless another language can be used that he understands and in which he can communicate clearly.

Note: Based on the definition of "labor migrants" used in the Wgv, this refers to labor migrants whose main residence is in a member state of the European Union.  

Role of municipalities

Mandatory hotline

As of January 1, 2024, it is mandatory for municipalities to have a low-threshold hotline where undesirable rental behavior can be reported anonymously and free of charge. If necessary, municipalities can do this jointly. If the municipality receives a report, it may decide to take enforcement action. It can also choose to refer the matter to, for example, the legal desk or the rent assessment commission.

Permit required to rent?

In certain areas where livability is under pressure, municipal councils can impose further requirements on a landlord for certain categories of housing through a rental ordinance, including the requirement that a dwelling may not be rented out without a rental permit (see Article 4 of the Wgv). This permit may then also include further conditions, such as, for example, a maximum permitted rent. Among others, the municipality of Leiden, The Hague and Rotterdam have now implemented such rental regulations in some areas. It is therefore advisable for landlords to check whether there is such a rental ordinance showing that there is a permit requirement.

Municipal councils additionally have the option of including in a general rental ordinance a permit requirement for renting accommodation to labor migrants. Such a permit is not area-specific.

Enforcement

To enforce the Wgv, municipalities have acquired far-reaching powers, as also described in our earlier blog. In short, violating rules of good landlord practices can lead to revocation of the rental permit, an order under penalty to undo the violation and/or a fine of up to EUR 90,000 for a repeated violation. For repeated violations, the municipality may also decide to take the property into management or have it taken into management by a designated manager such as a housing corporation. The landlord then temporarily has no control over the rental of his property, but does bear the costs of management.

Conclusion

All in all, the Wgv brings with it the necessary obligations for a landlord and the municipality has been given far-reaching powers to ensure that these rules are actually pursued. Naturally, we are happy to assist you as a landlord to ensure that you actually comply with both the obligations under the Wgv and any ordinance.

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