Making property more sustainable is a topic that concerns many landlords. When making a rental property more sustainable involves major renovation work, it may be necessary for the tenant to temporarily move out of the rental property. In such cases, Article 7:220(5) of the Dutch Civil Code stipulates that the landlord of residential accommodation must contribute to the costs incurred by the tenant as a result of the move. Each year, the minister sets a minimum contribution for the relocation and furnishing allowance. At present (February 2024), the allowance is set at €7,156.
Housing associations are also faced with the question of whether a relocation allowance is payable in the event of large-scale renovation of residential complexes. Landlords are looking for solutions. For example, they make use of “replacement homes” where tenants can temporarily move to during the renovation, or they look for ways to carry out the work as much as possible “in an inhabited state”, for example by providing emergency facilities. In these cases, is a tenant entitled to a relocation allowance?
In 2022, the Supreme Court answered this question in the negative in a situation where the landlord offered a replacement home (ECLI:NL:HR:2022:493). If a tenant of a rented property is forced to move in the event of renovation and the landlord offers a fully furnished and decorated replacement property, the tenant cannot claim the minimum contribution to removal and furnishing costs as referred to in Section 7:220(5) and (6) of the Dutch Civil Code. However, this must be a reasonable and appropriate solution, taking into account the tenant’s personal circumstances. This requires a tailor-made solution. Even if the tenant chooses not to make use of the reasonable and appropriate provision in that case, they cannot claim the minimum contribution.
At the end of 2023, the Supreme Court ruled on the question of whether a relocation allowance was payable in the case of a renovation “in an occupied state” where it was not possible for an individual tenant to remain in the rented property (ECLI:NL:HR:2023:1215). The planned renovation in the residential complex took place in the rented properties for a short period of time and the intention was that the tenants could continue to live there. The tenant in question lived and worked from his rented property. However, working from home was not possible during (part of) the renovation work. For this reason, the tenant stayed with friends for a short period of time, taking only a few personal belongings with him. His household effects remained in the rented property.
According to the Supreme Court, in this specific case, additional circumstances made it necessary for the individual tenant to move out, taking into account the tenant’s personal work situation. The fact that it was not necessary for most tenants in the complex to leave their rented accommodation during the renovation does not alter this. Nor does the fact that the tenant only took a few personal belongings with him alter the conclusion. The fixed relocation allowance, which is mandatory under the law, must be paid to the tenant in such a case. The situation in which a tenant is forced to move to their own accommodation but does not incur any removal costs cannot be compared to the situation in which the landlord provides alternative accommodation in order to avoid removal costs for the tenant. In line with the 2022 ruling, the Supreme Court does note that no claim for relocation allowance could be made if the landlord had provided reasonable and suitable accommodation that enabled the tenant to carry out his work, which in the present case would mean offering the tenant reasonable and suitable workspace. This also applies if the landlord has made a reasonable offer to this effect, but the tenant has not accepted this offer.
In short, a distinction is made between two cases:
(i) It is necessary for the tenant to vacate the rented property due to renovation. By providing a fully furnished and upholstered replacement home, the landlord has made reasonable and appropriate provision, which means that the tenant does not have to incur any removal and redecoration costs. In this case, the landlord is not liable for the fixed removal costs compensation referred to in Article 7:220(5) of the Dutch Civil Code.
(ii) It is necessary for the tenant to vacate the rented property due to renovation. The landlord has not made provision as referred to in (i). In this case, the landlord is liable to pay the fixed relocation allowance, even if the tenant does not incur any moving and furnishing costs or incurs costs that are less than the minimum contribution. In that case, the mandatory nature of the relocation allowance scheme and the fixed nature of the minimum contribution mean that the tenant is at least entitled to this, regardless of the actual costs incurred.
These rulings show that it is important for landlords to draw up a well-considered plan of action prior to the renovation that is tailored to the personal circumstances of the tenants. It may happen that, in the case of the same renovation work in a building with several tenants, one tenant is entitled to a relocation allowance because there is a need for this specific tenant to move, but another tenant is not entitled to this allowance because there is no need for this tenant to move. If the landlord wishes to avoid paying the relocation allowance, it is advisable to make a customised renovation proposal tailored to the tenant’s personal circumstances, offering a “replacement home” and/or “replacement workspace” in the event of a need to move. A general offer that is used for all tenants may not provide a solution in all circumstances and may result in the minimum contribution to removal and furnishing costs still being payable.
If you have any questions about this, please contact Désirée Dexters or one of the Paulussen property and tenancy law specialists at our Maastricht or Heerlen office.
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