Dutch Airbnb rentals get tough treatment
Short-stay rentals typically appear to be regulated at a municipal/regional level and thus differing regulations can be seen within a given country. The serious increase of short stay rental activity in recent years, cities around the world are looking at ways to reform their regulations or have already taken actions to do so.
Scruffy Dutch law discourages landlords
Because the traditional regulatory frameworks were largely designed without these new additions to the short-term accommodation market in mind, there is a danger that they will be ill-adapted to application to Airbnb-style providers or that such providers may entirely fall outside of the scope of the regulatory framework. As a lawyer focused on human rights article 1 EP (European Protocol) comes in the picture, the right to property, in particular the right to derive profit from property recognised by the the European Court in the case Hutten-Czapska vs Poland.
A more social consideration is also used by the Court:
Property, including privately owned property, has also a social function which, given the appropriate circumstances, must be put into the equation to determine whether the fair balance has been struck between the demands of the general interest of the community and the individual’s fundamental rights.
Ban on airnbnb rentals unjusified
In my Dutch law firm we notice a increasing call from property owners that do not accept de local restrictions e.g. in the City of Amsterdam. To my opinion the balance has gone to far in the protection mode and the basic right of the landlord to rent including short stay rent is infringed.
Land Lease of land ownership?
Buying a house without ground lease (erfpacht) in Amsterdam is tough; 80% of the city’s land is owned van the municipality. The municipality of Amsterdam has used land lease (erfpacht) since 1896. More than 200.000 land lease contracts are outstanding in Amsterdam. The origin of ground lease is agricultural though and was introduced centuries ago in the Netherlands.
Dutch Land Lease as planning tool
Land lease or ground lease is an urban planning tool which may give good return on investment. In the Netherlands however due to the banking crisis land lease as an instrument has come under attack. Banks are not so willing anymore to finance house on private landlease. Especially private landlease conditions applying to the lease are criticized. The City of Amsterdam is force to modify their ground lease system. For any legal issues on real estate in the Netherlands don’t hesitate to contact me.
Legal aspects of Ground Lease
Land lease (erfpacht) is a right “in rem” or a “material right” and therefore exists independently of the person that owns the ground lease right. The owner of the land retains the legal ownership of the land and at the same time – under certain lease conditions – transfers the use of the land to someone else. The ground lease transactions in the Netherlands are materialized through a notary. The notarial deed is registered in the Dutch Register (Kadaster) in order to valid. The lessee can sell or assign his ground lease. He is not always entirely free in choosing the person he will sell the lease. The landowner has to give permission for any transfer.
Issues in Dutch book on Ground Lease
In my book on land lease in the Netherlands – 50 Vragen over Erfpacht – (50 Questions on Ground Lease) all issues ground lessees in the Netherlands encounter are dealt with. The book on land lease is published by Kluwer (July 2014) The tricks landowners use to obtain financial gain are listed in the book so lessees can check their ground lease conditions. The book does not only deal with the legal aspects of ground lease but also tackles, amongst others:
– the financial aspect of ground lease
– taxation of the lease in the Netherlands
– valuation of the land used for ground lease
– ground rent
– renewal of the ground lease
– pricing issues of land lease on renewal
– unfair practices of landowners
– compensation of lease upon ending of the ground lease