Tenant in arrears of more than 3 months, nevertheless no rescission

Tenant in arrears of more than 3 months, nevertheless no rescission

The tenant of a property owned by housing corporation Stichting Goed Wonen in Gemert has allowed rent payment arrears of almost 7 months to accumulate. Goed Wonen is therefore going to the cantonal court and is progressing termination of the lease. The subdistrict court granted the housing corporation's claim. According to established case law, the mere occurrence of three months of rent arrears is sufficient to terminate the lease. The tenant appealed. The Court of Appeal ‘s-Hertogenbosch Sets aside the district judge's ruling and upholds the lease. What was going on here? Lawyer Myrthe de Vries and lawyer Mika Veldhuis, both specializing in rental law, explain what went wrong.

Rent arrears lead to dissolution of lease agreement

The law states that any failure to perform a contract is enough to terminate that contract. So this also applies to a rental agreement. The law also states that the shortcoming must not be too minor. Case law has ruled that a default is not minor if there is rent arrears of three months or more. If this is the case, the dissolution of the lease is usually granted. Nevertheless, the Court of Appeal upheld the lease in this case.

Debt relief decree requires notification of rent arrears (early warning)

The crux is in the Municipal Debt Relief Decree. Pursuant to Article 2 thereof, Goed Wonen, as landlord, should have reported the existence of rent arrears to the municipality. This is also called early warning mentioned. The Subdistrict Court had not taken this into account and based the dissolution solely on the amount of rent arrears. The Court of Appeal considered that Goed Wonen's failure to report the rent arrears could be taken into account when determining whether the tenant's default was of sufficient weight to justify dissolution of the lease.

Rent arrears not reported: no termination of lease agreement

Because early signaling as referred to in the Decree did not take place, the possibility that debt assistance could have contacted the tenant afterwards was not utilized. In doing so, the Court of Appeal found it likely that if the rent arrears had been detected and reported, debt assistance might have been called in. In this way, the mounting rent arrears could have been stopped sooner. The Court of Appeal found that the failure to report was a serious circumstance that could be attributed to the housing corporation. Therefore, in this case, the rent arrears alone do not justify termination of the lease.

Landlord must report rent arrears

This is not the first time landlords have been caught flat-footed for failing to report rent arrears. That happened earlier in a ruling by the district court judge Zeeland-West Brabant and the district judge of the Amsterdam court. Those rulings also determined that failure to report a rent arrearage to the municipality is grounds for rejecting the claimed rescission.

Lawyer for dissolution of lease

As a landlord, do you need help reporting rent arrears to the municipality or have questions about dissolving a lease? Then please contact up with the tenancy law lawyer of Lexys Lawyers. Who knows exactly when and especially how to report rent arrears to the municipality. We can also advise you at an early stage on how to terminate the lease agreement with bad paying tenants.