The main difference between a fixed contract of up to 2 years and an indefinite contract is the end date and a minimum term.

 

Temporary contracts have a specified end date, this can be desirable to provide future flexibility for property owner. Whereas an indefinite contract does not end unless the tenant terminates. But only with an indefinite contract, the landlord does have the right to set a minimum term. During this minimum period the tenant cannot terminate the lease.

If you are a homeowner, you’ve probably noticed that a lot has changed in tenancy law in 2024. The changes particularly concern temporary rental contracts (contract type B). With the new Fixed Rental Contracts Act, temporary rentals are being heavily restricted and are only permitted under certain conditions. This law came into effect on July 1, 2024.

At Zen Home Rentals, we distinguish between three different types of rental contracts: type A, B & C, which we will discuss below.

Contract Type A – Rental Agreement for an Indefinite Period

As of July 1, 2024, rental agreements for an indefinite period are once again the standard. In principle, this type of contract cannot be terminated by the landlord. In our contracts, we include an initial period (for example, 1 or 2 years). During this period, the tenant also cannot terminate the contract. This can be a significant advantage of Contract Type A. It provides you, the landlord, with the certainty of rental income during that time, and you can be sure you won’t need to look for a new tenant until the period has ended.

Often, a diplomatic clause for the tenant is included in the contract. This means the tenant has the right to terminate the lease during the initial period if he or she starts working more than 50 kilometers away from the property. After the initial period, the tenant may terminate the lease with one calendar month’s notice.

Contract Type A does not allow you, as the landlord, to terminate the lease. This could be a problem if you need the property for personal use or if you want to sell it. Don’t want to be tied to a tenant for too long? Then we recommend renting to expats. They generally stay in the Netherlands for only a few years, giving you a good chance that your property will become available again within a reasonable time.

Contract Type B – Fixed-Term Rental Agreement

Although the new legislation establishes indefinite rental contracts as the standard, there are still sufficient exceptions and special situations in which temporary rental agreements are still permitted.

1. In certain cases, offering a fixed-term rental contract is allowed, specifically for the following groups of tenants:

  • (International) students who temporarily rent in a different city than where they normally live for their studies;

Individuals who:

  • Temporarily live elsewhere due to construction work or renovation of their home;
  • Are separating, can prove they no longer live with their partner, and are temporarily renting a property to live near their child(ren);
  • Are between the ages of 16 and 27 and take over the lease of their deceased parent/guardian who was renting the property;
  • Are given a second or final chance after a previous rental contract was terminated, for example due to nuisance;
  • Can demonstrate they are coming from a social shelter or are in a socially urgent situation;

2. Renting out can be done through a fixed-term rental contract or a so-called interim rental contract. The latter is intended for people who temporarily live abroad for study, work, or an extended trip and plan to return to their home afterward.

Contract Type C – Fixed-Term Rental Agreement – Interim Rental

Are you going abroad for a period of time for work, study, or an extended trip and want to rent out your home during that time? Are you also certain that you want to return to your home once you come back? Then this so-called interim rental contract could be a very good option for you. A major advantage of this type of contract is that the maximum rental period of 24 months does not apply, and the contract can potentially be extended with the same tenant (without the tenant acquiring tenancy rights). During the initial contract period, neither the tenant nor the landlord can terminate the agreement early. An exception may be made by including a diplomatic clause for the tenant, allowing early termination if the tenant is required to move due to work obligations.

After any extension of the contract, the tenant has a one-calendar-month notice period. As a landlord, you can return to your home after the agreed period using the diplomatic clause included in the contract. In the case of an extension, the landlord has a notice period of at least 3 and up to 6 months, depending on how long the tenant has lived in the property. In all cases, you must inform the tenant in a timely manner if you intend to return to the property at the end of the (extended) contract.

Another big advantages of the interim rental contract are flexibility in duration and the possibility of multiple extensions. This is especially useful if you’re unsure how long your stay abroad will last.

So, which rental contract is best for you?

Which contract is best suited for renting out your property completely depends on your specific situation. Perhaps, based on the information above, you already have a good idea of what might suit you best? As part of our services, we offer tailored advice on the most suitable rental contract for your property, preferences, and personal situation.

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