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Developments in the Dutch rental market

Developments in the Dutch rental market

The rental market in the Netherlands has recently changed a lot. And (speaking December 2015) we expect that the developments in the Dutch rental market will continue to take place in the coming months. With this mail/article/letter, I would like to inform you about the main changes and their impact for you as our client.

  1. Verdict supreme court

The supreme court in the Netherlands has brought in a verdict in October 2015 that housing agents who advertise properties and/or are in one way or the other in direct contact with the landlords are supposed  to work as representatives of the landlord. Even if there is no agreement between the housing agent and the landlord, or the real estate agent is not actually paid by the landlord, working like this means that they will only be able to send an invoice to the landlord and not to the tenant. So commission costs will never be due if the real estate agent works or is supposed to work for the landlord.

  1. Administration costs

Related to the above, are the administration costs. New Dutch legislation will prohibits the common practice of invoicing these. From now on, if the real estate agent works for the landlord, only real costs may be invoiced to the tenant. You may think of painting works that have been done on your authorisation, or the  parking permit costs.

The name of the invoiced costs (administration costs, handling fee, contract costs, real estate fee, etc) is not relevant for the question if the invoice has a legal basis. All services that fall under the interference of getting a rental contract signed fall under the commission. And the commission in this case is due for the landlord.

What is inclusive in this commission for the landlord?

Dutch law says the following:

  • Finding a suitable house for the tenant;
  • Finding of suitable tenants for a property;
  • Gaining and giving information about properties;
  • Home viewings together with the tenant;
  • Negotiations with the tenant about the rental price and the other contract conditions;
  • Making and sharing the rental agreement;
  • Explanation of the rental agreement before its signing.
  1. In practice

It is most probable that it will take some time before the rental real estate market has become used to the above developments. We already see that real estate agents no longer show other real estate agent’s offer on their websites.  Moreover, real estate agents may be reluctant to show their own offer during tours .

Some real estate agents may press you to pay administration costs because they have ’10 other potential tenants who are willing to pay’. We want you to know that most administration invoices lack a legal basis, but we cannot withhold you from making a payment if you feel that this is necessary to get the house that you want.

  1. Future

Although it is difficult to forecast the future, I will share Settle Service’s ideas about this. We think that the rental real estate market will become comparable to the Dutch buyer’s real estate market, where the roles, responsibilities and costs for the agents on buyer’s and seller’s behalf are completely transparent and clear.

Either a real estate agent will become 100% tenant oriented, or they will truly become the landlord’s representative. The real estate agent who works for the tenant will no longer also have his own database of home owners/houses. The agent working on behalf of the home owner will no longer search for properties for the tenant.  This will take some time, but we think that this will be the future.

We expect that some real estate agents will be putting (financial) pressure on future tenants to get a property. This will come to an end once the law and its consequences have become fully clear to all parties involved.

  1. Settle Service

Settle Service offers a number of home finding programmes. Main goal is always to find the best solution. We will advise you on the best choices. Please read our blog about saving costs in 2016 for more information about the programmes.

If you have any questions, please do not hesitate to contact me.