Contractual co-tenancy and the separation rule: a follow-up

You can read the previous article here. Tenants who rent together but wish to separate can initiate a court procedure based on this article, where it is requested that the tenancy relationship be allocated to one of them. For the other, the tenancy agreement ends.

On April 12, 2023, the District Court of The Hague ruled in line with this that if contractual co-tenants agree on who will leave and who will stay, then they cannot be required to start a procedure to invoke the separation rule. An agreement between them may suffice under certain conditions. In the following, I will discuss the ruling of April 12, 2023, and its implications for the landlord’s position.

The case

The ruling of April 12, 2023, concerned a couple who rented a home together; contractual co-tenants. About a year after the start of the tenancy agreement, their romantic relationship ended. For criminal reasons, the co-tenants were not allowed to be in contact with each other, which is why one of them terminated the tenancy agreement and moved out of the property. The other tenant remained living in the property.

Following this departure, rental arrears accrued. The landlord involved both co-tenants in a legal proceeding, seeking a joint judgment against the tenants for payment of the rental arrears and ongoing rent. The landlord argued that the tenants were jointly liable for payment of the rent under the tenancy agreement. The termination by or departure of one of them did not change this. The District Court did not agree with this position.

The ruling

The District Court ruled that based on the Supreme Court’s 2021 ruling, contractual co-tenants could invoke the separation rule of Article 7:267 paragraph 7 DCC, allowing a judge to allocate the tenancy agreement to one of them upon request. The departing tenant is then released from their (payment) obligations under the tenancy agreement. Such a decision by the judge has an effect on the landlord, according to the Supreme Court.

The question that arose on April 12, 2023, was whether contractual co-tenants must also initiate such a judicial procedure if there is no dispute between them regarding who will leave and who will stay. Referring to relevant literature and case law, the District Court ruled as follows:

“4.10 The District Court – in line with this – is of the opinion that [defendant 02] could terminate the tenancy agreement on her part under Article 7:267 paragraph 7 Civil Code when her relationship with [defendant 01] ended and she vacated the leased property. [Defendant 01] and [defendant 02] were in fact in agreement that [defendant 01] would stay in the leased property and [defendant 02] would leave.

Contrary to [ZRI: landlord]’s argument, [defendant 01] and [defendant 02] cannot be required to initiate a judicial procedure regarding who can stay in the leased property when there is no dispute between them.”

The District Court considered mutual agreement between tenants sufficient for the application of the separation rule. There is no basis to require tenants to seek recourse to the court if they already agree on the outcome of the procedure.

Further restricted position of the landlord

In a previous article, I already wrote that the position of the landlord has been significantly restricted by the Supreme Court’s 2021 ruling. A landlord who knowingly entered into a tenancy agreement with multiple tenants and could therefore hold several individuals accountable for rent payment may lose their tenant(s) through a relatively straightforward (default) procedure. Neither the landlord nor their interests are involved in this process.

The ruling of April 12, 2023 further restricts the position of the landlord by determining that judicial intervention is also not required for terminating the tenancy agreement for one (or more) co-tenants. Tenants can simply decide this among themselves; an agreement between co-tenants, with termination of the tenancy to the landlord by one of them, is sufficient.

Whether this ruling actually marks a new direction remains to be seen. There has been no appellate decision where the Court of Appeal expresses its view on how the separation rule was applied by the District Court. Nonetheless, the ruling is interesting for contractual co-tenants and highly relevant for their landlords.

Conclusion

On April 12, 2023, it was ruled that contractual co-tenants who wish to separate cannot be required to initiate a procedure to invoke the separation rule of Article 7:267 paragraph 7 DCC if there is no dispute between them regarding who will leave and who will stay. Under certain circumstances, they can determine this themselves; no consent from the landlord is required, nor judicial intervention.

More information?

Do you have more questions about contractual co-tenancy or the separation rule of Article 7:267 paragraph 7 DCC? Please feel free to contact us.