Some 540 tenants who live in non-rent controlled property are heading to court to stop CBRE and property manager Nationale-Nederlanden from putting up their rents on July 1.

According to the Financieele Dagblad, it is the first time such a large group of tenants have used jurisprudence to challenge their landlords. The group wants to the court to freeze their annual rent increase, now that several district courts have called a halt to the way big institutional investors are acting.

The dispute surrounds rental contracts with a standard clause stating that the rent will rise by inflation plus and optional amount which varies from landlord to landlord but is usually between 3% and 5% of the monthly rent.

Investors such as Bouwinvest, Amvest, ASR and Vesteda have all lost cases brought by tenants who argue that the annual rent increase is both “unfair” and in conflict with European consumer protection rules. This, they say, has led to free sector tenants for years being confronted with rents that are too high.

The Supreme Court is currently looking at the arguments used by lower courts to find in favour of tenants. Until that ruling, the tenants say, they should not have to pay any rent increases – determined by the government to be a maximum of 5.5% this year.

“You cannot expect tenants to pay a rent increase on July 1 which is based on what courts have said is an unfair rental contract clause,” their lawyer Danish Siddiqui from Forsyte Advocaten told the paper.  “That would be unacceptable. Our demand is simple. Forgo the rent increase until the Supreme Court has given clarity.”

Both CBRE and NN have confirmed receiving legal papers but have declined to comment further, the FD said.

But lower courts have ruled that there needs to be a “clear and transparent” explanation of how and why the landlord is invoking the extra clause and say the current situation is both unfair and in contravention of EU consumer protection regulation.

Landlords argue the courts have gone too far in scrapping both the optional increase and the increase for inflation. If the Supreme Court upholds that position, landlords say it will cost them billions of euros.

Since 2021, the government has restricted the maximum rent increase in the non-rent controlled sector to inflation plus 1% or the average pay rise plus 1%, whichever is lower. 

MPs recently voted to continue this process up to 2027.