In our Real Estate update for December 2017, we dealt with the first court judgments on the temporary renting out of living accommodation under the (Dutch) Mobility in the Rental Market Act 2015 [Wet doorstroming huurmarkt 2015], which entered into force on 1 July 2016. There is now another judgment to add to the list.
On 10 January 2018, the Subdistrict Court in the Zeeland-West-Brabant district handed down a judgment that was unpleasant for a landlord who was renting out temporary accommodation. In this case, the landlord had bought the dwelling in order to occupy it himself, but during the bridging period he had rented it out for a certain period of time, namely until 1 January 2018. In July and August the landlord informed the tenant that the tenancy agreement would be terminating, followed by issuing official notice [aanzegging] on 28 September, which he repeated on 6 December. At first glance, the landlord seemed to have done everything possible to make the tenant aware that he must vacate the dwelling. He had failed, however, to observe the correct deadlines.
Section 7:271 (1) of the Dutch Civil Code [BW] has provided since 1 July 2016 that Section 7:228(1) of the Civil Code applies to a fixed-term agreement if the landlord informs the tenant in writing of the day when the agreement will expire by no earlier than three months but no later than one month before that specific period has elapsed. In that case, the tenancy agreement terminates by operation of law pursuant to Section 7:228(1) of the Civil Code. If the aforesaid requirement is not met, then the tenancy agreement will be extended for an indefinite period of time.
In this particular case, the landlord should have issued the tenant with notice no earlier than 1 October 2017 and no later than 1 December 2017 to the effect that the agreement between the parties would terminate as of 1 January 2018. These requirements were not complied with. It was established between the parties that the notice was sent on 28 September 2017 and received by the tenant on 29 September 2017. The Subdistrict Court ruled that that was too soon. The subsequent letter of 6 December 2017 was then sent too late. The Court therefore also ruled that the tenancy agreement had basically been extended for an indefinite period of time from 1 January 2018.
The landlord invoked the restrictive effect of the principle of reasonableness and fairness pursuant to Section 6:248(2) of the Civil Code. He referred, by analogy, to the obligation set out in Section 7:668(1) of the Civil Code to issue notice before the end of an employment contract for a period of one year.
The Court found that in applying Section 6:2(2) of the Civil Code it needed to exercise the necessary restraint. It cannot easily be assumed that a provision or requirement included in the law, such as at issue here, does not apply because its application would be unacceptable according to standards of reasonableness and fairness. The Subdistrict Court referred to the parliamentary history, in which the Minister explicitly stated that notice that is issued too early cannot be rectified (Reply to Parliament [MvA], Parliamentary Documents I, 2015/16, 34373, E, p. 7). It should be noted, however, that the page to which the Subdistrict Court referred concerns the issue of whether the omission can still be rectified if the landlord “fails” [nalaat] to issue notice. The answer in that context was: “The obligation for this notice is included in the proposed Section 7:271(1)(second sentence) of the Civil Code. The landlord cannot rectify this failure [to issue notice]. If he fails to do so, the tenancy agreement will be extended for an indefinite period of time (the proposed Section 7:271(1)(third sentence) of the Civil Code). The court basically cannot rectify this situation.”
Whether “failure” should also be understood to mean sending the notice two days too early is open to dispute. Moreover, “basically cannot” [in principe niet] does leave some room for deviation on the grounds of reasonableness and fairness.
The Subdistrict Court’s judgment is an unpleasant one for the landlord in question and makes clear, once more, that landlords who rent out a dwelling temporarily must be sure to issue the tenant with notice at the right time.