Temporary leases disappear: What You Need to Know

A significant initiative bill was passed in the Netherlands on 14 November 2023: the 'Fixed Rental Contracts Act'. This law, which is expected to enter into force on 1 July 2024, brings significant changes to rental agreements. In this blog, we discuss the main points of the new law and what it means for tenants and landlords

1. Return to Indefinite Term Leases:
The new law makes indefinite rental agreements the norm again. Temporary leases, such as those of 'two years or less' for independent living accommodation, will disappear.

2. Transitional law:
Existing leases are still covered by the old law. The new law will apply to leases agreed after its expected entry into effect on 1 July 2024.

3. Extending Temporary Rentals on Other Grounds:
Other forms of temporary rentals, such as on the basis of diplomatic clause and target group contracts, will continue to be possible.

5. Additional Ground for Termination for Cohabitants:
Addition of a new ground for termination for situations where a property becomes available after cohabitation.

6. Conditions for Ground for Notice for Cohabitation:
To prevent abuse, landlords must meet specific conditions, such as a one-time use of this clause and entering into a marriage or partnership within three months of the end of the lease term.

7. Compensation in case of Abuse:
Landlords who later prove they did not intend to use or sell the property themselves must pay damages to the tenant.

8. Temporary Leases 'Two Years or Shorter' only in case of Justifiable Interest:
Temporary leases will continue to be possible if there is a legitimate interest, e.g. for students, care dependency, emergency seekers, and exchange homes

9. Exceptions for Certain Target Groups:
Specific target groups, such as students and tenants with urgent work, can still get temporary contracts under certain conditions.

10. Landladyrent:
A motion was submitted to explore ways to expand opportunities for landlady rental.

11. Evaluation provision:
The law includes an evaluation provision, requiring an independent evaluation within five years after its effective date.

This new law brings significant changes to the rental market in the Netherlands. It restores the norm of indefinite leases and introduces specific conditions for different situations. Tenants and landlords would do well to keep up with these changes and, if necessary, seek legal advice to consider adjustments to their leases.*