25 September 2023

First case law on the Municipal Debt Counselling Decree (Municipal Debt Counselling Decree)

By Marie-Christine Veltkamp-van Paassen

The Municipal Debt Counselling Decree has been in force since 1 January 2021. Under this decree, a landlord of residential property is required to take active action if rent arrears are detected.

The landlord is expected – after a number of prescribed notices to the tenant – to report the arrears to the municipality and provide the tenant’s data. This early detection allows debt assistance to be provided to the tenant if necessary. The question is what impact does the Municipal Debt Counselling Decree have on a claim for eviction due to rent arrears?

What did the court decide?

On 7 July 2022, the Amsterdam court ruled in summary proceedings that the mere fact that the landlord had not notified the municipality meant that the landlord had not made sufficient efforts to find a solution and that the eviction could therefore not be granted. This is something of an oversimplification.

 

Fortunately, subsequent rulings showed more nuance. The main question is and remains whether rent arrears justify termination of the rental agreement. In answering that question, the court may consider the failure to report rent arrears as a circumstance. In ECLI:NL:RBAMS:2022:5830, the eviction was granted, as it was clear in that case that an early warning could not have prevented the accumulation of rent arrears. Also in ECLI:RBROT:2022:8229, the eviction was not granted because the tenant had not allowed the rent debt to accumulate since the summons and he could now concretely indicate how he would pay the accumulated debt. In ECLI:NL:RBROT:2022:9951, it came to a compromise. In this case, the tenant was given a term de grâce of one month to still meet his payment obligation.

Conclusion of the Municipal Debt Counselling Decree

In short: landlords must observe the duty to report, but failure to do so does not immediately mean that eviction cannot be granted. Are you also faced with non-paying tenants? Please do not hesitate to contact us. GMW advocaten is happy to assist you.

Marie-Christine Veltkamp-van Paasen

Marie-Christine Veltkamp-van Paassen

Lawyer / associate partner

Marie-Christine Veltkamp-van Paassen is an experienced real estate lawyer.

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