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What is the best rental contract for my property?

What is the most suitable rental contract for renting out my property? That is one of most frequently asked questions from clients.  Maybe you are aware of the fact that in the Netherlands tenants (in some cases) can build up tenancy rights, and thus the right to stay in your property. Even if you need that property, for example for your own use. To prevent this, it is very important to choose the right contract when renting out your home.

If you are a homeowner, you are probably aware of the fact that there are new developments in the field of tenancy law and in particular with respect to temporary rental contracts (contract type B below). In November 2023 the Dutch Chamber approved the new Fixed Rental Contracts Act. By this act temporary rental will be severely restricted and will only be permitted under a number of conditions. It is still not known when this new law will come into effect, but most likely it will be on July 1, 2024.

At Expat Housing we distinguish three different rental contracts; type A, B & C, which we will discuss below. Choosing the most suitable option depends entirely on our specific situation. Please note in addition that the below information reflects the current situation and will no longer be valid when new laws come into effect.

Contract Type A – Rental agreement for an indefinite period

Maybe you are sure you will no longer need your property for your own use in the future? And in addition you are not planning to sell your property? Then contract type A may be something for you. This contract cannot be canceled by the lessor. At Expat Housing we have included an initial period in our contracts. During this period (for example, 1 or 2 years), the tenant cannot cancel the contract either. It means that as a landlord you have the certainty of rental income during that initial period and you know for sure that you will not have to look for a new tenant until this period ends. A diplomatic clause for the tenant is often included in the contract. This clause entitles the tenant to cancel the rent during the initial period if he or she starts working more than 50 kilometers away from the property. After the initial period, the tenant can cancel the rent with a calendar months’ notice.

Contract type A is mainly used by large investors, but could of course also be the rental contract for you. This is if you are sure that you will not need the property in the future and you like the fact that the tenant cannot leave during the initial period.


What is the best rental contract for you?

Contract Type B – Rental agreement for a definite period

There is a good chance that this is the perfect contract for you if you only want to rent out your property temporarily. Contract type B is concluded for a minimum period of 6 and a maximum of 24 months. The lessor cannot cancel the agreement during this rental period. The tenant, on the other hand, always has the option of leaving the property early (with due observance of a notice period).

Contract Type B – Advantages & disadvantages

The big advantage for you as a landlord is that the tenant does not build up tenancy rights and must actually leave the property after the agreed period. As a landlord you have to remind the tenant of the end date of the contract between 1 and 3 months before this end date. If you don’t do this, the contract automatically changes into a contract type A, which means the tenant now accrued tenancy rights.

The major disadvantage of a type B contract is that it cannot be extended as type B. When extended, the agreement automatically changes into a contract type A (indefinite period). This also applies if a first and second contract combined do not exceed the duration of 24 months. Do you not want your tenant to accrue rights? In that case your only option is to look for a new tenant for your property.

Perhaps you want to rent out your property for an indefinite period, but you would like to know for sure what kind of tenant(s) you are dealing with? Then starting with contract type B is also a good option. Are you satisfied with your tenant(s) during this rental period? Then you let the contract continue as contract type A. Are you less satisfied, for example because the tenants cause a nuisance or are behind in paying the rent? Then you can terminate the contract after the agreed period and still look for a new tenant.

Please note that by the new regulations Type B contracts will be severely restricted, with expected starting date of 1 July 2024.

Contract Type C – Rental agreement for a definite period – Intermediate rental

Are you going abroad for a specific period and thus want to rent out your property? Are you also sure you want to move back into your property when you return? If so, an intermediate rental contract could be a very good option for you. A major advantage is that the maximum rental period of 24 months does not apply to this contract. In addition the contract can be extended with the same tenant (without building up tenancy rights). During the initial contract, neither the tenant nor the landlord can terminate the contract prematurely. As an exception, a diplomatic clause could be included here for the tenant. This is in case the tenant is forced to leave the property before the end date due to work.

After a possible extension of the contract, the tenant has a notice period of 1 calendar month. As a landlord, you can return to your home after the agreed period by means of the included diplomatic clause. In the event of an extension, you as a landlord have a notice period of at least 3 and a maximum of 6 months (depending on the number of years that the tenant has lived in the property). In all cases, you must inform the tenant in time if you want to return to the property at the end of the (extended) contract.

Contract Type C – Advantages & disadvantages

The major advantages of the intermediate rental contract are flexibility in duration and the option to extend the contract (several times). Of course this is great if you are not yet sure how long your stay abroad will last. With this contract it is very important that you really have the intention to return to your property. If you do not return to live there, the diplomatic clause does not apply and the tenants could in theory protest against the termination of the contract.

So… what is the best rental contract for you?

Which contract is best for renting out your property depends entirely on your unique situation. Based on the above information you might already have a good idea of the best contract for you. Part of our service is providing rental contract advice tailored to your property, wishes and situation.

For now, it looks like till 1 July 2024, you can rent out your property without any problems via the above rules and contracts. Do you want to rent out from 1 July 2024 onwards? We advise you to give us a call, so we can advise you based on the latest regarding rental contracts.

Do you want to know more about what is involved in renting out your property? You can read about this in the blog ‘How do I rent out my property to expats in Amsterdam?’. In addition you can take a look at our rental packages, or you can contact us!

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