On Tuesday, 23 March, the Act was passed by the Dutch Senate. The new act will enter into force on 1 May 2021. Under the new act, starting 1 May 2021, the maximum annual increase that is permitted for rents in the liberalised market will be that year’s inflation plus 1 percent. This means that any arrangements between landlords and tenants that provide for a rate of increase that exceeds this cap will become invalid. This is seen as a considerable constraint on the principle of freedom of contract.
The new act will remain in force for three years, starting on 1 May 2021. It will be reviewed within two and a half years after its introduction to decide whether it should remain in effect beyond the initial three-year period. During that time at least, any clause in a tenancy agreement will be invalid in so far as it results in a higher rent increase than is legally allowed.
Read the publication ‘Cap on rent increases in private sector confirmed’ here
