Is it possible to make a trial contract with tenants of student rooms?

Investors with student properties in their portfolio are dealing with tenants who typically have no steady income and often live with several people in one property. For this reason, these landlords may have an interest in getting to know their tenants first in practice before moving to an indefinite lease.

With the introduction of the Lease Market Transition Act, it has become possible to conclude a temporary lease once, in the case of room rentals for up to five years. The landlord can have such a lease terminated on the agreed date by sending a "notice." Sending that notice should be seen as a standard of decency, according to the legislature. The tenant thus knows for sure that the landlord wishes to hold him to the end date agreed upon in the lease. The law requires the landlord to give the tenant written notice of termination at least one month before the end date. The lease then terminates automatically on the agreed upon end date.

Only once

The fixed-term lease can only be entered into once. Thus, the landlord may not offer multiple fixed-term leases to the same tenant. After all, this would undermine the tenant's rent protection under the law.

Practical case study: first a three-month lease

Recently the District Court of Midden-Nederland dealt with an issue in which the landlord rented out rooms on a large scale. According to the landlord, the practice was to first enter into a lease for three months with the tenants. This period explicitly served as a trial period. If the rent subsequently went smoothly during this three-month period, the landlord omitted the notification, so that the lease automatically changed to a permanent lease.

One day late

In this way, the landlord had entered into a lease with a tenant who, for the first three months, caused a nuisance to the other tenants and, in addition, did not pay the rent due on time. The landlord wished to terminate the lease for these reasons. However, the landlord sent the required notice one day late, not on Jan. 31, 2017, but on Feb. 1, 2017.

Indefinite time

The court ruled that the notice had not been sent in time and that, for that reason, the lease had changed to an open-ended lease. Indeed, according to the court, the tenant was entitled to trust that the landlord wished to continue the lease for an indefinite period of time and did not wish to take advantage of the option to have the lease terminated on the date initially agreed upon.

Eviction denied

The court also held that the nuisance alleged by the landlord was irrelevant and rejected the claimed eviction because the reasons for termination do not play a role in the termination of a fixed-term lease. In addition, the court said, the landlord's practice of concluding so-called trial contracts is contrary to the purpose and spirit of the possibility of concluding fixed-term leases. These contracts are only intended to allow for fixed-term rentals - i.e., not to allow for a trial period.

Strange statement

In my opinion, this last consideration by the court is at odds with the observation that the very reasons for termination of the lease should not play a role in the termination of a fixed-term lease. Since only a "notice" is required for the termination of the lease, the court should, in my opinion, not include these reasons in its assessment.

Judge has no stick to beat with

In short, the (lower) case law seems to consider important, in appropriate cases, how a landlord uses fixed-term leases. The legislator's intention with these contracts is to make temporary rentals possible, not to facilitate trial periods. However, the courts have no real stick to beat with if the landlord does use the leases in this way. After all, strictly speaking, the landlord does not need a reason to terminate the fixed-term lease. The discussed ruling illustrates that he does have to fully comply with the legal requirements, such as sending the required notice in time.