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A rental agreement for residential property can only be terminated on a few grounds specified by law. One of these is 'urgent personal use'. Does this also apply if the use involves renting the property to a third party? This question was central to a ruling by the Amsterdam subdistrict court published on 31 March.
Ymere, a housing foundation, rents social housing to people who cannot provide suitable housing for themselves due to low income or other circumstances. There is a significant shortage of social housing in Amsterdam. The average waiting time for a social rental home is over 13 years.
One of its tenants buys first one, then a second, and even a third property, which he in turn rents out for amounts between €1,200 and €2,500 cash, without providing proof of payment.
When Ymere discovered this, it terminated the lease on the grounds of urgent personal use. This personal use consists of wanting to rent the property again to a person within its target group. The current tenant would no longer fall within that target group as he owns two (the third property had since been sold) properties.
The question is whether a lease for social housing can be terminated on the grounds of urgent personal use because the tenant owns two (other) properties. Ymere must make it plausible that it needs the rented property so urgently for personal use that, considering the interests of both parties, it cannot be required to continue the lease. The subdistrict court thoroughly examines this concept.
Personal use does not only mean use by the landlord themselves, but also use by someone else if it serves the statutory objective of the landlord. Renting to specific target groups can also fall under this. These are sometimes regulated by law (for example, renting to students or disabled people). In such cases, a lease can be terminated if a tenant no longer belongs to the special target group. The target group 'people eligible for social housing' is not specifically mentioned in the law. However, the legal regulation is not exhaustive. The fact that some target groups are separately included in the law does not exclude other target groups from falling under the provision of personal use.
Ymere is obliged under the Housing Act to rent homes to people who cannot provide for their own housing needs. This is also its statutory objective. The tenant in question no longer belongs to this target group, as he now owns two, previously three, properties. According to the subdistrict court, rental law provides sufficient room for an appeal to personal use under these circumstances.
The next question is whether this use is also 'urgent'. Ymere has stated that it urgently needs the property to meet its statutory objective. The waiting time for a social rental home is 13 years. For a good distribution of social housing, Ymere has an urgent interest in terminating a lease if a tenant also owns a property.
In contrast, the tenant has argued that Ymere should build more homes. In this way, it can and must meet the demand for social housing. The subdistrict court does not agree with this. Even if Ymere were to build more homes, this does not affect the question of whether renting a property to a tenant who owns two properties falls outside its objectives and whether this means Ymere urgently needs the property.
The tenant has also argued that his properties are rented out and that if he has to leave his rental property and live in one of his properties, his tenants will be homeless. The termination of the lease therefore does not lead to an increase in the housing stock. This may be true, according to the subdistrict court, but Ymere rents homes at relatively low prices. The tenant's tenants pay a rent in the middle or high segment and presumably do not fall within Ymere's target group.
Both parties have stated that they have an interest in using the property. Ymere has an interest in having as many homes as possible available for people without housing and with a low income who depend on social housing and often have a long waiting list. If the property becomes available, it provides a new social rental home for a housing seeker. The tenant's interest is in retaining his relatively affordable rental home.
Ymere's interest weighs more heavily. The tenant has two alternatives. His interest is therefore limited to having affordable housing. This is insufficient compared to Ymere's socially relevant interest.
A claim to terminate the lease on the grounds of urgent personal use can only be granted if suitable housing is available. Suitable housing does not need to be offered. According to the subdistrict court, this is the case. The tenant has disputed that his two properties meet the definition of suitable housing because he rents them out (and they are therefore not available) and that the costs of the properties are higher than what he can pay based on his income (and his properties are therefore not suitable), but he has not substantiated his claims and has not provided rental agreements. His claim that he has no written rental agreements is implausible, but in any case, the consequences must remain with him. Based on all this, the subdistrict court terminates the lease on the grounds of urgent personal use.
'Use' is therefore interpreted broadly. The application of this termination ground is thus broader than is sometimes thought.
For questions about rental law, contact Per van der Kooi, Attorney at law Rental Law.
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