Defect Book version July 1, 2023 Subscribe to DeepL Pro to translate larger documents. Visit www.DeepL.com/pro for more information. Defects book Rent Commission, version July 2023 Page 2 of 68 Table of contents Foreword .................................................................................................................................4 Chapter 1 - Introduction .........................................................................................................5 Chapter 2 - Legal framework....................................................................................................8 2.1 Defects in a living space .................................................................................................8 2.2 Defects and deficiencies outside the landlord's duty of maintenance.............................9 2.3 Three categories of defects ..........................................................................................10 Chapter 3 - Procedural rules ................................................................................................12 3.1 Review of initial rent (7:249 BW)...................................................................................12 3.1.1 No mandatory defect reporting ...............................................................................12 3.1.2 Examination at initial rent review ............................................................................13 3.1.3 Reference date ...................................................................................................... 13 3.1.4 Effective date of temporary rent reduction..............................................................13 3.2 Rent reduction based on maintenance defects (7:257 BW) .........................................14 3.2.1 Choice .................................................................................................................... 14 3.2.1 Defect Notification ................................................................................................. 14 3.2.2 Submission deadline ............................................................................................. 14 3.2.3 Investigation in case of rent reduction based on defects .......................................15 3.2.4 Reference date ...................................................................................................... 15 3.2.5 Start date of temporary rent reduction....................................................................15 3.2.6 Setting rent.............................................................................................................16 3.3 Repair of defects (Article 4(3) Uhw). ........................................................................... 17 3.3.1 Submit request .......................................................................................................17 3.3.2 Rent Commission assessment ...............................................................................17 3.3.3 Termination of rent reduction..................................................................................18 3.4 Engaging external expert..............................................................................................18 Chapter 4 - Defect categories A, B and C............................................................................20 4.1 Category A - very serious housing defects and deficiencies ..................................... 21 4.2 Category B - serious housing defects and deficiencies ............................................ 26 4.3 Category C - other serious defects to and deficiencies regarding the housing unit itself .................................................................................................................................... 28 Defects book Rent Commission, version July 2023 Page 3 of 68 4.4 Additional provisions for caravans and pitches............................................................32 Chapter 5 - Additional C-list.................................................................................................34 5.1 Table of contents supplementary list Category C......................................................35 5.2 Supplementary list to Category C..............................................................................36 Chapter 6 - Temporary rent reduction .................................................................................56 6.1 Maximum temporary rent reduction...............................................................................56 6.2 Situations where a less severe rent reduction may be ordered ....................................57 6.3 Multiple defects in home................................................................................................61 6.4 No rent increase possible in case of defects.................................................................62 Appendix - Glossary of terms...............................................................................................63 Defects book Rent Commission, version July 2023 Page 4 of 68 Foreword The Rent Commission is an independent administrative body whose duties include ruling on the rent to be charged in connection with defects. In performing this task, the Rent Commission must comply with laws and regulations. In recent y e a r s , the practical elaboration of these provisions has led to implementation policies. The purpose of this defects book is to provide insight into the Rent Commission's implementation policy with respect to the categories of defects and deficiencies that may occur in a rental property and the corresponding rent reduction. It sets out the policies from which the Rent Commission proceeds. The Rent Commission will therefore act in accordance with these policy lines and will only deviate from them, with good reason, insofar as the dispute in question requires this because of disproportionate consequences for the interested party or parties in the event of full application of this policy. Due to new legislation or adjustment of the implementation policy, there will be a new version of the defects book on a regular basis. This version of the defects book applies to the procedure under Article 7:257 paragraph 2 of the Civil Code to those cases where the tenant made the defect notification on or after July 1, 2022. For proceedings under Article 7:249 of the Civil Code, this version of the defect book applies to those cases where the effective date of the lease falls on or after July 1, 2022. The Rent Board, dated July 1 Defects book Rent Commission, version July 2023 Page 5 of 68 Version control The present version replaces the Defects Book dated July 1, 2022. The policy book has been modified in the following respects ï In Chapter 3, the procedural rules are supplemented by procedural rules on three procedures relevant to the defects book: defects procedure (7:257 BW), initial rent review (7:249 BW) and repair of defects (4 paragraph 3 Uhw). ï In Chapter 5, three defects are included in the additional list at Category C: smoke detectors, vermin and asbestos. Defects book Rent Commission, version July 2023 Page 6 of 68 Chapter 1 - Introduction This Defect Book explains how the Rent Commission handles a dispute and reaches a decision when a tenant and landlord disagree on rent when there are defects. The defects book is a policy document of the Rent Commission and plays a role in two proceedings: ï rent reduction on grounds of maintenance deficiencies as follows from Article 7:257(2) of the Civil Code (hereafter BW); ï test initial rent as follows from Article 7:249 of the Civil Code. The legal basis of the defects book can be found in Article 3a, paragraph 3 of the Housing (Tenancy Rates) Implementation Act (hereinafter Uhw) and Article 6, paragraph 2 of the Housing (Tenancy Rates) Decree (hereinafter Bhw). With the defects book, the Rent Commission provides insight into its implementation policy regarding serious defects and shortcomings that may occur in a rental property and the corresponding reduction of the rent. The structure of the defects book is as follows. Chapter 2 contains the legal framework that applies to procedures assessing initial rent (7:249 BW) and rent reduction on the grounds of maintenance defects (7:257 paragraph 2 BW). It discusses the concept of 'defect', which defects the landlord does not have to remedy, and the three categories of defects. Chapter 3 briefly discusses the procedural rules to promote an orderly and expeditious resolution of the dispute. Chapter 4 contains the three lists of defects set forth in Appendix II of the Bhw, with explanations from the Rent Commission. These lists of defects distinguish between categories A, B and C. The list of category A defects are very serious defects and deficiencies. The category B list contains the serious defects and deficiencies. The category C list contains other serious defects and Defects book Rent Commission, version July 2023 Page 7 of 68 deficiencies. This distinction is important given the maximum temporary rent reduction that can be handed down by the Rent Commission. For a Category A deficiency, the Rent Commission may temporarily reduce the rent to a maximum of 20% of the set/regulated rent. In the case of a Category B defect, the Rent Commission may temporarily reduce the rent to a maximum of 30% of the set/running rent. For a Category C deficiency, the Rent Commission may temporarily reduce the rent to a maximum of 40% of the set/regulated rent. The explanation of each defect explains how the Rent Commission explains the different categories of defects as listed in the law. The defects in the C category, unlike the A and B categories, are not exhaustive. The Rent Commission has been given the opportunity to add to the C category. The C category therefore consists of two parts: 1) the other serious defects and shortcomings as follows from Appendix II Bhw and 2) a supplementary C list, drawn up and maintained by the Rent Commission. Chapter 5 contains this supplementary C-list. Chapter 6 discusses the Rent Commission's implementation policy regarding its authority to issue a temporary rent reduction on the rent. Finally, in the appendix we explain some construction terms that appear in this defect book. Defects book Rent Commission, version July 2023 Page 8 of 68 Chapter 2 - Legal framework The Rent Commission's task is to rule on the rent to be charged in connection with defects. In two procedures, namely rent reduction on the grounds of maintenance defects (Article 7:257 paragraph 2 BW) and verification of initial rent (Article 7:249 BW), the Rent Commission has the authority to pronounce a temporary rent reduction if there is a defect in the housing accommodation. This chapter explains what is meant by a defect by the Rent Commission and which defects can lead to a rent reduction. It also discusses which defects and shortcomings are not covered by the landlord's maintenance obligation . Finally, the various categories of A, B and C defects are explained. 2.1 Defects in a living space If there are one or more defects in a rental property, this may be grounds for a rent reduction. 1 In order to assess whether there is a defect, it is necessary to know what is meant by "a defect. According to article 7:204 paragraph 2 of the Civil Code, the definition of a defect is: 'A condition or a characteristic or another circumstance of the leased property that cannot be attributed to the tenant, as a result of which the property cannot provide the tenant with the enjoyment that a tenant may expect upon entering into the contract' Moreover, it is important to know when there is a defect in a residential property. This is further elaborated in Article 7:241 of the Civil Code. This states that "The shortcomings that shall in any case be considered defects shall be determined by or pursuant to an order in council. The provisions laid down pursuant to this article cannot be deviated from to the detriment of the tenant '. In the Bhw, the legislator included the so-called defect lists. These defect lists contain a list of defects that are considered defects in any case and are included in Schedule II of the Bhw. If the tenant, pursuant to Section 7:257(2) of the DCC 1 Article 7:257(2) BW and Article 16 Uhw. 2 See Chapter 6 for more information on the temporary rent reductions that the Rent Commission may issue. Defects book Rent Commission, version July 2023 Page 9 of 68 or submits a request to the Rent Commission pursuant to Section 7:249 of the DCC, the Rent Commission bases its ruling on whether there is a defect that can lead to a rent reduction on the concept of 'defect' as follows from Section 7:241 of the DCC and is concretized in the lists of defects. This follows from Section 7:257(2) of the DCC and is confirmed in Section 1a of the Uhw, where it is explained in the definitions that the term 'defect' means the same as in Section 7:241 of the DCC. This means that the term "defect" in Section 7:241 of the DCC is less broadly defined than the term "defect" in Section 7:204 of the DCC. For the Rent Commission, a defect as follows from the Uhw relates to a more limited category of defects than those that fall under the description of Section 7:204(2) of the DCC. This defect book sets out what in any case is considered a "defect" by the Rent Commission. These defects follow from Article 6 Bhw and Annex II to the Bhw and the Rent Commission is bound by these as well. These defects generally give rise to a temporary rent reduction until the defects are remedied, unless circumstances arise that do not justify a temporary rent reduction. 2 2.2 Defects and deficiencies outside the landlord's duty of maintenance The following defects and deficiencies do not fall under the landlord's maintenance obligation. Therefore, they cannot lead to a temporary reduction of the rent on the grounds of maintenance defects. ï Defects and shortcomings that relate to the facilities installed by the incumbent tenant at his own expense, the so-called self-installed facility. ï Defects and shortcomings whose maintenance obligation according to the agreement between tenant and landlord is the responsibility of the tenant. For example, the incumbent tenant may have expressly accepted the maintenance obligation of a self- installed feature installed by the previous tenant. 4 Annex II Bhw. Defects book Rent Commission, version July 2023 Page 10 of 68 ï Defects and shortcomings of which the repair obligation of minor maintenance according to art. 7:217 BW are for the account and risk of the tenant. The Minor Repairs Decree details when the tenant in a residential property is responsible for minor maintenance. The annex to this decree contains a non-exhaustive list of activities that must be considered minor repairs for which the tenant is responsible. 3 ï Defects and deficiencies attributable to the tenant. For example, a defect may be caused by incompetent or improper use by the incumbent tenant. 2.3 Three categories of defects Annex II to the Bhw identifies three categories of defects: an A, B and C category. These categories describe the defects in which the Rent Commission has the option of temporarily reducing the rent: ï Category A: these are the very serious defects and deficiencies; ï Category B: These are the serious defects and deficiencies; ï Category C: this is a non-exhaustive "residual category" that includes other serious flaws and shortcomings. This distinction is important because it determines the maximum temporary rent reduction the Rent Commission can issue. Read more about this in Chapter 6. The defects in categories A and B are exhaustive. This means that there is no legal basis for the Rent Commission to expand these categories to include other defects and deficiencies. The Rent Commission does provide an explanation of these defects in the defect book. Unlike the A and B categories, the defects in the C category are not exhaustive. 4 In the case of the C category, the Rent Commission has the option of supplementing it with other defects. Annex II of the Bhw uses the following criterion for this purpose: 3 See annex to Article 1 of the Minor Repairs Decree. Defects book Rent Commission, version July 2023 Page 11 of 68 ' Serious defects and deficiencies with respect to the living space that seriously harm the enjoyment of living space but that do not belong to the defects or deficiencies in categories A and B' . This means that the Rent Commission can supplement category C with serious defects or shortcomings that seriously harm the residential property. Category C thus consists of two parts: 1) the other serious defects and shortcomings as listed in Appendix II Bhw and 2) an additional C list, drawn up and maintained by the Rent Commission. The Rent Commission ensures that this supplementary C list is regularly updated with defects that have been pronounced but not yet included in the C list. 5 5 This is in accordance with the explanatory note to the Decree of February 6, 1999, Stb. 1999, 69. Defects book Rent Commission, version July 2023 Page 12 of 68 Chapter 3 - Procedural rules The following discusses the procedural rules at the Rent Commission with respect to the three proceedings where the defects book comes into play: 1) Rent reduction based on maintenance defects pursuant to Article 7:257(2) of the Civil Code; 2) review of initial rent pursuant to Section 7:249 of the Civil Code; 3) remedy defects under article 4 (3) Uhw. 3.1 Review of initial rent (7:249 BW) If the tenant submits a request as referred to in Section 7:249 of the Dutch Civil Code, the Rent Commission will rule on the reasonableness of the agreed rent. 6 In this procedure, the Rent Commission tests two issues. First, it determines whether the agreed rent is in reasonable proportion to the quality of the accommodation. Secondly, the Rent Commission tests whether there are serious defects that were present at the start of the rental agreement and whether these serious defects give reasons to reduce the rent temporarily. 7 The extensive procedural rules of the 7:249 DCC procedure are further elaborated in the policy books on the valuation system for self-contained and non-self- contained accommodations. 3.1.1 No mandatory defect reporting It is not mandatory in these proceedings for the tenant to have reported the defects to the landlord. This is because the landlord can be expected to be familiar with the condition of the property at the time he enters into a new lease. The Rent Commission does expect the tenant to indicate in the petition the defects that were present in the property at the beginning of the lease. The Rent Commission assesses whether there are serious defects as follows from the defects book and, if so, whether the rent is temporarily reduced. 6 Article 11(3) Uhw. 7 Art. 4(2)(a) Uhw jo. Article 12 Uhw. Defects book Rent Commission, version July 2023 Page 13 of 68 3.1.2 Examination at initial rent review The Rent Commission investigates whether there are serious defects in the housing unit. Usually the defects in the dwelling are investigated by an investigator from the Rent Commission, but this is not always possible and/or necessary. For example, the tenant may have moved out in the meantime, the defect has already been repaired, or in some cases the Rent Commission may not have the technical knowledge and/or equipment to investigate the defect. The investigation is limited to the defects that were present at the start of the lease. If it is not possible for the Rent Commission investigator to determine whether the defects were present at the start, this will be noted in the report of investigation. If the defect has already been repaired or the tenant has moved out before an investigation could take place in the living space, documents will be requested from the parties regarding the alleged complaints. On this basis, the existence of a defect is assessed. 3.1.3 Reference date The reference date for the investigation is the condition at the time the lease began. This means that defects that were not present at the start of the lease will not be considered by the Rent Commission. 3.1.4 Effective date of temporary rent reduction The Rent Commission determines whether and, if so, which defects result in a rent reduction and what rent, given these defects, is reasonable. If the Rent Commission grants a temporary rent reduction, the temporary rent reduction will take effect on the effective date of the lease. Defects book Rent Commission, version July 2023 Page 14 of 68 3.2 Rent reduction based on maintenance defects (7:257 BW) If the tenant applies for a rent reduction based on maintenance defects, the Rent Commission will rule on a temporary reduction in rent due to maintenance defects. 8 3.2.1 Choice The tenant must make a choice between submitting its claim for rent reduction due to defects to the Rent Commission pursuant to Article 7:257 (2) of the DCC or instituting proceedings before the Subdistrict Court pursuant to Article 7:207 (1) of the DCC. The proceedings before the Subdistrict Court as ensuing from Section 7:207(1) of the DCC offer more possibilities because the term 'defect' is more broadly defined for this purpose pursuant to Section 7:204(2) of the DCC than for the proceedings pursuant to Section 7:257(2) of the DCC. 3.2.1 Defect Notification The tenant can claim a temporary rent reduction from the moment the landlord was notified of the defects. 9 This is called the defect notice. Here it is important that the tenant can prove the date as of which the landlord was notified of the defects so that the Rent Commission can determine this. 3.2.2 Submission deadline After the notice of defects, the landlord has six weeks to remedy the defects. If the landlord has not remedied the defects within the six-week period, then the tenant can file a petition with the Rent Commission. 10 Example: if the defect notice was sent on April 13, 2023, then the petition can be filed from May 25, 2023. If the tenant receives a response from the landlord within the six-week period stating that the defects will not be remedied, the tenant can immediately file a petition with the Rent Commission. 8 Article 4(2)(e) Uhw. 9 Article. 7:207 para. 1, 7:222 and Article 7: 257 para. 1 BW. 10 Article 7:257 (2) BW jo. article 16 Uhw. Defects book Rent Commission, version July 2023 Page 15 of 68 3.2.3 Investigation in case of rent reduction based on defects The Rent Commission investigates whether there are serious defects in the housing unit that seriously impair the tenant's enjoyment of living space as named in the defects book. 11 Usually the defects in the housing unit are investigated by a Rent Commission investigator, but this is not always possible and/or necessary. For example, it may happen that the tenant has since moved out, the defect has already been repaired or if the Rent Commission does not have the technical knowledge and/or equipment to investigate the defect. An investigation in the living space is then not useful. 12 If the defect has already been repaired or the tenant has moved out before an investigation could take place in the living space, documents will be requested from the parties regarding the alleged complaints. On this basis, the existence of a defect is assessed. The investigation is limited to those defects listed in the defect notification, also known as notice, to the landlord. Other defects not mentioned in the defect notice to the landlord are included only if these defects are of "such a nature or consistency that they should have been known even without notice to the landlord. " 13 3.2.4 Reference date The reference date for the investigation is the condition at the time the tenant sent the defect report to the landlord. 14 3.2.5 Start date of temporary rent reduction The Rent Commission determines whether and, if so, which defects result in a rent reduction and the lower bare rent, in proportion to the defects found. If the Rent Commission grants a temporary rent reduction, the reduction will take effect on the first day of the month following the month in which the tenant reported the defects to the 11 Article 6(2) Bhw. 12 See section 3.3 for more information. 13 Article 16(2) Uhw. 14 Article 16(2) Uhw. Defects book Rent Commission, version July 2023 Page 16 of 68 landlord. 15 Here, no temporary rent reduction can be requested over a period longer than six months prior to the filing of the petition. Example: the defect notice is dated April 13, 2023, and the petition is filed on December 13, 2023. This means that the temporarily reduced bare rent can take effect six months before December 13, namely on the first day of the month following June 13, 2023, being July 1, 2023. 3.2.6 Setting rent When determining the rent in the context of a temporary rent reduction, the bare rent in effect on the last day of the month before the start date of the temporary rent reduction is used . Example: the defect report was made on June 10, 2023. The start date of the temporary rent reduction is on July 1, 2023. The last day of the month before the start date of the temporary rent reduction is June 30. On June 30, 2023, the bare rent is €500.00. A bare rent of €500.00 must be assumed in this case, to which a discount percentage can be applied. 3.2.7 Duration of temporary rent reduction After the defects mentioned in the ruling are remedied, the temporary rent reduction of the bare rent shall no longer apply from the first day of the month following the month in which these defects are remedied. 3.2.8 All-in price If the review reveals that there is an all-in price, this price will first be split by the Rent Commission ex officio into 55% bare rent and 25% advance payment for utilities and service charges, after which the ex officio split bare rent will be temporarily reduced. If no rent reduction is ordered, the bare rent does not have to be determined first and the all-in price is not split. 15 Article 16(3) Uhw 16 Article 16(4) in conjunction with Article 12(5) Uhw. Defects book Rent Commission, version July 2023 Page 17 of 68 3.2.9 Bare rent missing If the bare rent on the reference date cannot be determined due to a lack of data on it, a substantive judgment will be rendered on the defects in the housing accommodation, in which case the applicable rent will not be mentioned in the judgment, but only the defect (if any) and a percentage reduction linked to it. After the ruling, the parties must determine among themselves the amount of money associated with the reduction percentage. 3.3 Repair of defects (Article 4(3) Uhw). If the tenant and landlord have a disagreement about whether the defect has been remedied or not, the landlord can request the Rent Commission to rule on the matter. 16 To do so, the "Notification of Repair of Defects" procedure can be initiated at the Rent Commission. 3.3.1 Submit request If the tenant does not pay the old rent or expresses disagreement with the repair of the defect and the parties do not come to an agreement among themselves, the landlord can file a request with the Rent Commission requesting a ruling on whether the previously mentioned defects have been repaired. 3.3.2 Assessment of Rent Commission If the Rent Commission finds that the defect has been remedied, the ruling will indicate in which month the removal of the defect took place and as of when the applicable bare rent may be charged again. If the Rent Commission finds that the defects have not been remedied or have been partially abandoned, the Rent Commission will state this in the ruling and the temporary rent reduction will remain in effect, or the reduction percentage will change, until the defects have been remedied. Defects book Rent Commission, version July 2023 Page 18 of 68 3.3.3 Termination of rent reduction The temporarily reduced rent will be terminated in the first of the month following the month in which the defects were remedied. The Rent Commission has established as a policy that it is not possible to declare the termination of the temporary rent reduction with effect from a period longer than six months prior to the filing of the request, even if the date of repair is longer back. 3.4 Engaging external expert In many cases, the Rent Commission has sufficient technical knowledge to determine the presence of a listed defect or deficiency. In some cases, the Rent Commission does not have the necessary equipment and/or specialized knowledge to determine the defects. In that case, the tenant (the asserting party) must prove that there is a defect. In this case, the tenant himself (possibly in cooperation with the landlord) must have an investigation conducted by an independent and expert agency to prove the defect. If the tenant cannot provide the so-called expert report, then the Rent Commission will not be able to determine that there is a defect. In this case, the request to i s s u e a temporary rent reduction due to the complaint in question will not be honored. Tenants must, if the Rent Commission's rapporteur cannot determine the defect, have an independent and expert agency investigation conducted for subsequent defect investigations: An acoustic survey related to severe noise pollution or insufficient sound insulation (defects C3 and C7); structural inspection report regarding the functioning of the drain pipe (Deficiency B4); examination of the functioning of technical installations, such as a heating system, elevator or central heating boiler (defects C2, Cqa and Cqc); inspection report of loose wiring and/or inadequate shielding of wiring (defect Cqb1); Subscribe to DeepL Pro to translate larger documents. Visit www.DeepL.com/pro for more information. Defects book Rent Commission, version July 2023 Page 19 of 68 examination for lead content in drinking water (Cqd3). The tenant must prove this defect through an expert report if lead pipes are not visually visible; investigation of insufficient hot water in an individual hot water supply (Cqd1 and Cqd2); examination of the cold water system in connection with an increased risk of legionella bacteria (Cqd4); asbestos inspection report related to the presence of asbestos (X1); investigation of the structural condition of the leased property in the event of nuisance caused by pests (X2); investigation of smoke detector non-function (U1); Expert report on heat nuisance within the living space. Defects book Rent Commission, version July 2023 Page 20 of 68 Chapter 4 - Defect categories A, B and C. Chapter 4 contains three lists of defects, as listed in Annex II of the Bhw. These lists are accompanied by explanatory notes from the Rent Commission. In section 4.1 the category A list, in section 4.2 the category B list and in section 4.3 the category C list. Section 4 names the additional conditions for caravans and pitches. The defects in categories A and B are exhaustive. This means that there is no legal basis to expand these categories to include other defects and deficiencies. The defects in the C list are not exhaustive. Chapter 5 contains the Rent Commission's additions to the C list. In the tables below, the left column contains the text of the relevant defect or deficiency in or with respect to the housing unit. The right column includes an explanation from the Rent Commission to clarify the described defects and deficiencies. The explanation may refer to the relevant sections and articles of the 2012 Building Code. 17 17 Stb. 2011. 416, entered into force April 1, 2012, last amended by the Decree of November 11, 2021.