The past year we have seen an increasing number of international students in Groningen who rent their room or studio with a short stay contract. Such contracts were used a lot less earlier. This trend raises a number of questions, such as what is a short stay contract exactly? How long is short? Why this sudden increase? What is wrong with regular contracts? In order to answer these questions we will first look at the legal meaning of short stay contracts. We discuss what the legal consequences of a short stay contract are, what the risks are, and whether these risks should be considered acceptable. Next week we will focus on the role of the municipality.

Although it is often presented as the core term of the contract, the English term short stay is obviously not present anywhere in the Dutch Civil Code. As such it carries no legal value in itself. In contracts, the term short stay is therefore usually accompanied with references to article 7:232(2). This article is the first article in the part of the civil code that regulates the lease of residential spaces. It states that the entire section “does not apply to lease agreements concerning the use of residential spaces which use by its nature is of short duration.” A rental agreement in the sense of this article thus falls completely outside the scope of the laws for the lease of residential spaces. What exactly we should understand as “use by its nature of short duration” is not further specified. Both the nature of the space and the nature of its use can be subject to debate. The meaning of short term is rather subjective as well and very much dependent on who you ask. An urban planner might consider temporary houses that will be removed after ten years as short term, while for a student who lives in such a house for the entire three years of his/her bachelor, it might feel like a long time. Some cities have defined short stay in an administrative sense and curbed the timespan. Such definitions for the purpose of administrative law are however completely separate from the relation between lessor and tenant under civil law. Furthermore, many motivations to come to such a definition have been negated by the Wet Doorstroming Huurmarkt (2016), a law that aims to improve flexibility and flow within the lease market. In absence of a clear definition in the Civil Code, one can look at case law in order to gain an understanding of its meaning. In the past there have been verdicts concerning the question whether certain short stay contracts should or should not be regulated by the law for the lease of residential spaces, but they are not unequivocal. Verdicts fall to both sides and the details of the cases are too specific to lead to general conclusions. To interpret the meaning of the article we should therefore look at the parliamentary history to see what the original intentions of the legislator were.

From the parliamentary history we can conclude that the legislator intended the article to be applied only in highly exceptional circumstances and with great restraint. Former Minister of Justice De Ruiter, responsible for the implementation of the article, called it “an exception of very limited meaning” and one that should be “interpreted with great restriction”. (3) The duration of an agreement is herein not what matters most, but the nature of the residential space and its use. In 1979 when the implementation of the law was debated in the Dutch parliament, members of the parliament already expressed their concerns about the possible abuse of the exception by lessors. (4) It was feared that the article would be used by lessors to enjoy the benefits of leasing without taking the responsibilities. If the legislation for leasing of residential spaces is neutralized by the exception, a landlord is not bound by maximum rental prices. Furthermore he is not obligated to settle the annual service costs and it is a lot harder for tenants to force the repair of damages. In case conflict arises, the tenant cannot turn to an accessible institution like De Huurcommissie, but will have to go straight to Local Court. Such a procedure requires more knowledge, more money, and more time. In his response, the Minister put the parliament at ease. It would have to be overly clear to everyone that it is not a case of regular residence and that the question of entitlement to rental protection is irrelevant. Eventually it would be up to the judge to decide, but given the abundant clarity that should not be a problem. As obvious examples the Minister mentioned a hotel room or a holiday cabin, for which it would be “senseless” to appeal to rental protection. But what when it comes to the residential spaces that house international students in Groningen? Unfortunately, the situation feared by Parliament forty years ago, is increasingly becoming a reality in Groningen when it comes to large scale lease of residential spaces to international students.

If the actual duration is not of principal importance for the question whether something should be considered short term in the sense of article 7:232(2), how about the nature of the residential space and its use? Various rental agreements for international students in Groningen carry “Short Stay” or “Short Stay Agreement” as a title with reference to article 7:232(2). Often the contracts also contain passages that explicitly mention that the residency of the tenants has “predominantly the character of a hotel” or that the accommodation “would compare with (…) a holiday cottage/vacation home”. In addition to a hotel, the residential spaces are sometimes also described as an emergency shelter or as both at the same time. Be aware that we are not talking about the tents and school buildings that temporarily sheltered students last year. We are talking about the residential space they choose to live in for months and for which they have a contract. Some contracts also explicitly state that regular rental protection does not apply. There is a clear attempt to keep the agreements out of reach of the law for the lease of residential spaces. That it is stated as such in the contract however, does not make this a legal establishment of the lease relation. Minister De Ruiter foresaw in 1979 that the exception would only apply if the temporary nature was obvious and comments that “it is not so that the case is settled once the lessor simply states that on that ground the entirety of rental regulations is not applicable.” (5) On the contrary it can be argued that the apparent necessity the lessor feels to state this so explicit and so often, is a sign that the situation is not that obvious at all. What is even more remarkable is that, despite the explicit reference to the article that is meant to keep the agreement outside the laws for the lease of residential spaces, the contracts at the same time contain many references to very specific parts of this law. This is not the way the law for the lease of residential spaces works. It is not a pizza fantasia which can be put together according to the taste of the lessor by picking the elements from the Civil Code that are most beneficial. When drawing up a contract, parties do have a some freedom and some choices, but there are limits and certain choices by definition exclude others. This way a fair balance between lessor and tenant is guaranteed. Moreover, the explicit references to the law that regulates the lease of residential spaces in a way confirms the character of the rented space as such. Apart from imbalanced, the explicit attempt to exempt them from rental legislation while at the same time incorporating elements of that same rental legislation, makes the short stay agreements very ambiguous, contradictory, and unclear.

To justify an exceptional legal position, the contracts state that the residences are used as a hotel and/or emergency shelter. A hotel and emergency shelter evoke rather different images so what is the actual situation? This is different for each complex. There are hotels that use short stay agreements. Spaces are rented for a longer time without lease protection based on the argument that it is a room in a hotel. Such a case can be made if the facilities that make a hotel (e.g.: breakfast, fitness, reception, roomservice, housekeeping) are present. In addition, one should be able to rent a room in a hotel, also for shorter periods. Over the price the hotel pays the required taxes and the guests should be charged tourist tax. This is however not the case in many residential spaces for international students. The fact that a room is furnished or that there is a 24h-service or janitor present does not make a hotel out of a residential complex even if it is stated as such in the agreement. It does not in itself justify the use of article 7:232(2) according to the local judge either. (6) There is no possibility to rent a room for the weekend in most cases, nor is there roomservice or housekeeping. Here it can be said as well that the more explicit mentions are made of its lodging character, the more it begs the question why it must be stated so often. Apparently it is not that clear. However the lessor seems to have a significant interest in creating that appearance. A resident in a student complex also behaves different than a hotel guest. A student does his/her own groceries, celebrates his/her birthday, and may have an occasional guest overnight, something that most hotels do not allow. Furthermore students are registered on the address and receive their mail in their own personal mailbox. One can think of more examples, but the point is that the contract paints a picture that does not always correspond with the reality and the experience of the residents. What is similar in the short stay complexes is that you cannot leave your room or studio. Agreements are made for an exact time period. In between you cannot get out of the contract, something that would be possible under a regular contract for a fixed time in the sense of the Civil Code article 7:271 lid 1. On a regular bases you can find advertisements of students who are looking for other students to take over their room in their “hotel” for the remaining period of time. Apart from this being a rather strange situation and an example of the imbalanced relation, including an element of a fixed time and other reasons for termination, are also an indication that the neither the nature of the rented space nor the nature of its use are in itself to be considered temporary. (7) If it were, such a fixed time would be uncalled for.

The law in itself gives little clarity about the exact use of “use by its nature of short duration”. Jurisprudence on the subject is not unequivocal because verdicts are based upon very specific grounds in each case. Eventually the judge will have to decide for each individual situation, based among other things on the purpose of the law, whether an appeal to “use by its nature of short duration” is legal. The absence of proper definitions means that disputes are almost impossible to solve without going to court. There is a lot of unclarity for both lessors and tenants. That is a shame because unclarity is most often the source of conflict and not in the interest of both parties. Because of this unclarity, the increased use of short stay agreements is not a good development. The assertiveness and frequency with which short stay is mentioned in contracts and advertisements, as it were a title with direct legal consequences and legal value, is dust in the eyes of tenants. The contracts jump to legal conclusions that are presented as given, even though an appeal to article 7:232(2) will not be assigned easily by any judge. The ease with which lessors nevertheless use it to try to claim an exceptional position on the lease market is dangerous because it is contrary to the intentions of the legislator. It is undesirable because it takes away all the rights of tenants without verifiable argumentation. When a dispute occurs, the only solution is to ask the local judge for a verdict. This is a high threshold for an international student and one that poses a great contrast with the regular lease protection tenants can rely on.

References:
(1) E.g.: Maastricht in Leidraad Short Stay (2012) and Amsterdam in Beleidsnotitie Short Stay (2009). (2) We will discuss the meaning and the purpose of this law in depth in part 2. (3) Handelingen Tweede Kamer 1978-79 , 5026. (4) Idem. (5) Idem. (6) ECLI:NL:GHAMS:2015:1924 3.2.. (7) Idem 3.2.2.

Wednesday 14 August: Introduction
Wednesday 21 August: The legal context of short stay agreements
Wednesdag 28 August: The role of the municipality
Wednesday 4 September: Conclusions on the desirability of short stay contracts in Groningen