As a result of the Municipal Debt Relief Decree, an appeal to terminate a rental agreement for housing in the event of three months of rent arrears is no longer self-evident. This decree actually obliges landlords to make an effort to make a tenant aware of the possibilities of debt assistance.
On Jan. 1, 2021, the Municipal Debt Relief Decree went into effect. The decree creates a notification requirement for landlords who fail to pay rent or fail to pay rent on time. Both private landlords and housing associations must comply with this notification requirement.
In the event of rent arrears, a landlord must, according to the decree:
- Make efforts to engage in personal contact with the tenant;
- alert the tenant to debt relief options;
- send to the tenant at least once a written reminder to pay rent arrears;
- in that written reminder offer to provide the tenant’s contact information to the municipality with the tenant’s written consent.
Reporting requirement
If the landlord does not receive a response from the tenant to the offer to provide his contact information to the municipality with the tenant’s written consent, the landlord should proceed with notification to the municipality. After the notification, the municipality may request a cooling off period. During this period, the tenant cannot be required to pay rent arrears. This cooling off period can last up to six months.
There is no penalty for the landlord for non-compliance with the duty to report. However, it does follow from recent case law that when deciding whether dissolution of the lease is justified, the subdistrict court looks at whether the steps in the Municipal Debt Relief Decree have been completed.
Unless formula
Previously, three months of rent arrears were in principle sufficient to have a residential lease dissolved by the subdistrict court. Now, the landlord’s failure to comply with the obligation to report may be a circumstance for which the claim for dissolution and eviction is rejected. In that case, the court applies the unless formula of Article 6:265 of the Civil Code (unless the failure does not justify the dissolution with its consequences). The rule of thumb that three months of rent arrears means dissolution of the lease by the landlord is thus outdated.
As a landlord, do you have problems with your tenant that make you no longer wish to continue the lease? If so, I would be happy to advise you on the options for terminating the lease.
