The Squatting and Vacancy Act (Wet kraken en leegstand) entered into force on 1 October 2010. The aim of the new legislation is both to introduce stricter anti-squatting measures and to reduce vacancy rates still further. As a result of the entry into force of the new Act, various items of legislation including the Dutch Criminal Code and the existing Vacant Property Act (Leegstandswet) were amended with effect from 1 October 2010. According to the legislator, there is a close connection between tackling squatting and tackling vacancy. This is said to explain the need for a more comprehensive approach to the twin problems of squatting and empty properties.

The Squatting and Vacancy Act is intended to provide municipalities and property owners with more ways of preventing property from falling vacant or in any event of ending vacancy as quickly as possible through intensive cooperation between the authority and the owner. According to the legislator, the rights of ownership must be weighed against the public interest in preventing nuisance, blight, urban decay and the decline in value of neighbouring properties. Moreover, the legislator believes that rights of ownership should be weighed against the fact that space is a scarce resource in the Netherlands and structural vacancy is therefore unacceptable.

Changes to the Vacant Property Act

Three chapters conferring new powers on municipalities have been added to the Vacant Property Act (Leegstandswet). One of the new provisions is that the municipal council may introduce a vacancy bye-law. It should be noted that this is a power and not an obligation.

Under a vacancy bye-law the municipal council may determine that where buildings or parts of buildings of certain designated categories, other than residential properties, lie empty the owner must notify the municipal executive (i.e. the mayor and aldermen) if the property remains empty for longer than a period specified in the bye-law (minimum of six months). The phrase ‘buildings or parts of buildings of certain designated categories, other than residential properties’ generally means offices and retail premises. In addition, a municipal authority may decide that the vacancy bye-law will apply only to certain areas of the municipality. Where such a bye-law is introduced the municipal executive will then keep a register of vacant properties. This will list the buildings or parts of buildings notified to the municipality as lying empty. However, the register will also include buildings or parts of buildings listed as empty by the municipality on its own initiative (i.e. without notification from the owner). The municipal council may also provide in the bye-law that an administrative fine not exceeding 7,500 euros will be imposed if the owner fails to discharge the duty of notification.

After receiving notification that a property is vacant, the municipal executive holds consultations on the use of the property with the owner within three months. After these consultations the municipal executive may issue a decision on whether the vacant building is suitable for use. Even if no consultations can take place, a vacancy decision may still be issued. Rights of objection and appeal lie against such a decision.

If the property remains vacant for longer than the minimum period of 12 months specified in the vacancy bye-law the municipal executive may nominate a user to the owner. This user may be either a natural or a legal person. Within three months of the nomination, the owner is obliged to offer the nominated user an agreement for the use of the building. Before this period expires the owner himself may look for another user with whom to conclude an agreement for use. In such a case the user must start using the building or, as the case may be, part of the building within a reasonable period. The municipal executive may include a provision in the nomination decision that the amenities in the building must be restored so that it can once again be put to reasonable use.

The legislator has provided that the agreement to be concluded with the nominated user may be a tenancy agreement, although it may also be a property management agreement. The owner and user are free to make whatever arrangements they see fit, for example about the type and duration of use and the period of notice. In the Explanatory Memorandum to the Act the legislator has provided that the owner is obliged to offer an agreement that is reasonable according to objective criteria. The legislator also assumes that a rent that covers the owner’s costs is reasonable.

If a property falls empty a second time after having been used following a binding nomination, the owner should notify the municipal executive of this within four weeks. If the building has been used for longer than one year after the nomination, this obligation does not apply and the owner has six months within which to give notice.  

What next?

If municipalities actually go ahead and adopt a vacancy bye-law this may have far-reaching consequences for the owner of an empty building or part of a building. What form a vacancy bye-law will take is still unclear as no large municipality has yet adopted such a bye-law. Moreover, implementing such a bye-law is likely to pose problems. For example, it may be necessary to amend the zoning plan before a nominated user can make use of the building or part of it.

Nor are the municipalities uniformly positive about the idea of adopting a vacancy bye-law. Tackling the problem of empty property costs money and requires staffing capacity. The Association of Netherlands Municipalities (VNG) too has stated that it is not in favour of the new Act. Nonetheless, the VNG is producing a guide to the new legislation and a model bye-law. These are expected to be published in March 2011. In its memorandum entitled ‘Vacancy in Amsterdam: promoting use, tackling vacancy’ of 12 January 2011, the Municipality of Amsterdam announced that the municipal executive had decided to exercise the statutory power to introduce a vacancy bye-law. This bye-law is expected to take effect on 1 June 2011. By contrast, the municipal executives of Utrecht and The Hague have stated that they will not introduce such a bye-law, at least for the time being.