Rent increases: liberalised sector cap and shorter limitation periods

On 1 May 2021, the Rent Increase Cap for Liberalised Tenancy Agreements Act (Wet maximering huurprijsverhogingen geliberaliseerde huurovereenkomsten) was introduced. Among other things, this Act capped annual rent increases for an initial three-year period. A legislative amendment has now extended this cap with effect from 1 May 2024. Further, a shorter limitation period for rent increases will be introduced with effect from 1 July 2024. Stay informed of these developments with this concise news update.

Extension of rent increase cap

With effect from 1 May 2024, the cap on annual rent increases under liberalised tenancy agreements has been extended to 1 May 2029. From 1 May 2024, all rents in the liberalised market can increase by no more than the inflation rate plus 1 percentage point, except if the inflation rate exceeds wage rises (negotiated wages); in that case, the rise in negotiated wages plus 1 percentage point will be used. As has already been the case since 1 May 2021, a clause in the tenancy agreement will be null and void insofar as it results in a rent increase exceeding this statutory maximum.

In addition, the extension of this Act means that in the years to come landlords will still be unable to enforce a rent increase by means of a reasonable offer for a new tenancy agreement (consisting only of a new rent). A tenant's refusal of an offer of this type does not currently constitute a legally valid ground for landlords to terminate the tenancy agreement.

For the sake of completeness, we also note that the legislative proposal “Affordable Rent Act” (Wet betaalbare huur) is currently under consideration. If this legislative proposal is passed, further rent rules will apply to (part of) liberalised lease agreements.

Reduction of rent increase limitation period

Another major change is the shorter limitation period that will apply to claims for payment of a rent increase. From 1 July 2024, landlords must inform their tenants each year if a claim for payment of a rent increase becomes due and payable. If they fail to do so, their claim for payment of the rent increase will expire one year after becoming due and payable. If they do inform the tenant, the claim in question will expire two years after becoming due and payable. These periods differ from the general five-year statutory limitation period that applies to due and payable claims. The legislature's goal is to prevent unexpected and overdue claims for payment of an increased rent over several years, which, in the legislature's view, can have major financial consequences for tenants.