Over the past year we have seen more International students who rent their living space through so called short stay agreements. Such agreements were a lot less common a few years ago. This trend immediately raises a number of questions, such as what is a short stay agreement exactly? How long is short? Why this sudden increase? What is wrong with regular contracts? In order to answer these questions we have first looked at the legal meaning of short stay contracts. Last week we discussed what the legal consequences of short stay contracts are, what the risks are, and whether these risks should be considered acceptable. This week we will focus on the role of the municipality, who is closely involved in the development of housing for international students.

In the summer of 2018 it slowly became clear that there would not be sufficient space to house the students for the new academic year. Especially for students coming in from abroad, it appeared almost impossible to find a place to live. They usually arrive later and all in the same short period. Furthermore they lack a network in the city and often face some cultural and language barriers that make it harder. Extra housing options for this group had to be created on a very short term, and they were. Specifically with regard to the housing for international students, the mayor and alderman of Groningen stated that international students should have the same rights as Dutch students. Moreover they said that lessors of such living spaces were to respect the lease price protection and that international students should be able to step to the Huurcommissie in case of conflict. (1) Over the past year however, we have seen an increase lease contracts based on short stay. The mayor and alderman have been aware of this from the beginning.

As explained in part 1, short stay agreements aim to circumvent the protection of tenants. The rental prices are not protected, service costs do not have to be settled, and legal conflicts can only be decided on by a judge of the Local Court. Moreover tenants cannot count on lease protection. A lease agreement for a residential space in the Netherlands is in principle for an indefinite period. There are basically only two other variations on this. One is an agreement with a maximum duration that ends on an agreed date. In that case, the tenant does retain the right to terminate the agreement earlier if he or she wishes. The other option is a an agreement with a minimum duration in which the tenant can only terminate the contract after the agreed date. In the latter case, the tenant does retain the right to stay for an indefinite period if he or she wishes. With the short stay agreements, lessors no longer feel bound by this choice. A fixed date is set for both parties on which the contract ends. The mayor and alderman are aware of this and argue in defense of these contracts. The main argument is that lessors can hereby count on renting out their apartments or studios for a longer period of time without any risks of vacancy. (2) Lessors can thus play both exceptions to the lease protection. That is something that every lessor would want! The law for the lease of residential spaces however, aims for balance and equality between lessor and tenant. The consequence is that for agreements with a maximum duration, vacancy is an occupational hazard. That the municipality accepts that lessors protect themselves at the expense of tenants is a slap in the face of international students. It is also the wrong message to all fair lessors who play by the law and hence accept the potential risks of business. The municipality considers the risk of vacancy to be greater when it comes to international students compared to Dutch students. (3) Alternatively it can also be argued that International students are a lot less mobile. One who goes abroad for one or two semesters without furniture is a lot less likely to move in that period. Especially not if the living space meets decent standards. What the exact chances are of international students moving from one place to another under normal circumstances is hard to say. However, the moral question it begs is whether this chance justifies such an exceptional position for lessors. In short stay agreements, the lessor’s financial risk of vacancy is passed on to the tenant. They cannot get out of their contract and its financial obligations if they, for whatever reason, want or need to move out.

This limit these contracts put on mobility is not in line with the vision of the city. The municipality has the desire to create an inclusive undivided city in which International students offer a valuable contribution to the city and mingle with the local population. These goals are stated in Convenant BouwJong 2.0, a document the municipality drew up in cooperation with, among others, the university and several housing corporations, in order to determine its vision and plans for housing of young people in the future. Agreements that give international students a minimum and a maximum duration at the same time do not contribute to this vision. It keeps them locked in their living spaces and prevents them from moving on into regular living spaces among Groningers if an opportunity presents itself. If this trend continues, the 1500 or more students that are accommodated with special solutions cannot integrate the way the municipality would like to. Not because they do not want to, but because their contracts won’t let them. A Phd student can be leasing a living space for two year or more based on a short stay agreement. (4) That is comparable to hiring people year after year on short term contracts. It is disrespectful and it also seems like the wrong thing to do for a city with ambitions that wants to attract and to maintain talent. Apart from taking short stay agreements for granted at the cost of rental protection, the municipality also shows little regard for the law when it comes to rental price protection. For the accommodation of international students in which it is involved, it poses the condition that the prices should be reached based on good value for money. (5) For several living spaces with short stay agreements we visited in Groningen (not all related to the municipality), the maximum rental price based on the law for the lease of residential spaces was lower that the price tenants actually paid. Why the municipality chooses to demand good value for money, thereby automatically taking the liberty of deciding what good value for money is, is unclear. One could just apply the law for the lease of residential spaces and determine the maximum prices based on its points system (WWS). The municipal board has put itself in a tough split. On the one hand it says that international students should have the same rights as normal tenants, but on the other hand it defends the use of short stay agreements, which explicitly attempt to take away these rights. This raises the following question: who is the vulnerable group in this situation, international students or the lessors? Should International students be able to count on the same rights as their Dutch counterparts or should lessors be exempted from their regular responsibilities because of a potential risk of vacancy?

In November 2018, members of the city council have filed the motion “Short stay or are there other options”. Therein it requested the board to investigate, before the end of March 2019, whether there are alternative options for short stay contracts, what the policy towards such contracts should be for the municipality, and how the position of the tenant in such contracts can be improved. The board has said to answer these questions after the summer of 2019, because they had not finalized their researched in time. Unfortunately that seems too late to have an impact for the academic year 2019-20. That the board takes so much time for investigation is rather remarkable. With the new law for increased mobility on the lease market from 2016 (Wet Doorstroming Huurmarkt), there have been some changes in the law for the lease of residential spaces. An important adjustment in order to create more flexibility was the creation of the option for the aforementioned lease agreements with a maximum duration (article 7:271(1) BW). Then Minister of Housing and State Services Stef Blok considered this necessary because “who comes from abroad to work or study here, should be able to find a place to live for that period.” (6) In other words, the lease agreement with a maximum duration was created specifically for this situation. This possibility for agreements with a maximum duration was not there yet in 2015. As a consequence, the Minister observed that lessors tried to file their contracts under article 7:232(2) BW, i.e. short stay. There were however great objections to this. In particular the lack of lease protection and lease price protection were considered undesirable by the right liberal Minster. (7) In other words, the means now used by lessors in Groningen because lease agreements with a maximum duration are not ideal for them, are exactly the means the law aims to eradicate It must be stressed once more that despite that short stay is agreed upon in contract and the municipality chooses to accept it, this does not mean that this type of contract is legally valid. “By its nature of short duration” is simply not a form of agreement one can choose, but one that can only be confirmed by a judge. In principle, a tenant of a residential space has the right to lease (price) protection, except if it would be senseless for a tenant to appeal to that. (8) By considering short stay agreements as a given, the municipality takes a lot of liberty and contributes to normalizing something that should only be used with great restriction because the great potential for abuse. (9) The question the municipality looks to answer with regard to the desirability of short stay agreements is already answered. The legislator and the elected representatives in parliament are clear about this. Offering contracts for residential spaces as short stay agreements should be avoided, even when it is aimed specifically at international students. Lessors have to work within the possibilities the law for the lease of residential spaces gives them, because it aims to balance the interests of lessors and tenants. Instead of struggling to find ways to justify the use of short stay agreements, it might be more useful if the municipality accepts this is not the way to go and devotes its time and energy to ensure fair rental practices.

While the situation is begging for more clarity, the municipality takes an ambiguous position. It seems to be stuck between its desire to guarantee the rights of international students on the one hand, and protecting the financial interest of lessors on the other hand. When it comes to the desirability of short stay agreements, it does not take an explicit stand. This is not surprising given the sensitivity and complexity of the topic and the various interests at stake. In the end it of course not up to the municipality to determine whether short stay agreements are legally correct or not in the first place. That decision can only be left to the judge.
Of course it is not the case that the municipality is involved in all complexes in Groningen where short stay agreements are used. Some corporations have been doing it for years and new independent "hotels" are popping up in the city. Be that as it may, there are good reasons for the municipality to denounce its tolerant attitude towards short stay, if preventing Groningen from becoming one big hotel alone were not enough. The argument it uses so far serves solely the interest of lessors, while the rights of tenants seem to be disregarded entirely. The agreements also go against the vision for the future as carried out by the municipality. And last but not least, the short stay agreements are the complete opposite of what the legislator had in mind for these particular situations. The mayor and aldermen have an interest in the short stay constructions, but they are looking for a compromise that is legally simply not possible. Nevertheless, the municipality is an important partner in many housing projects for international students and as such it could perhaps make an effort to create a set of conditions that create more balance and clarity between lessors and tenants. This will be easier if there is a shift from the strict legal context to the question of fairness. One can think of transparant pricing according to the points system and contracts without contradictions. We would be glad to help out.

Referenties: (1) Beantwoording vragen ex art. 41 RvO van Groenlinks over internationale studentenhuisvesting in Groningen, Schriftelijk antwoord van burgemeester en wethouders van Groningen aan de leden van de raad van de gemeente Groningen, 29-8-2018. (2) Beantwoording van aanvullende vragen ex art. 41 RvO van Groenlinks over internationale studentenhuisvesting in Groningen, Schriftelijk antwoord van burgemeester en wethouders van Groningen aan de leden van de raad van de gemeente Groningen, 25-7-2018. (3) Idem. (4) “ One year with SSH” UK Magazine 28-1-2016. (5) Beantwoording vragen, 29-8-2018. (6) Memorie van toelichting Wet doorstroming huurmarkt versie Raad van State , 22-12-2015 p3. (7) Idem, p14,15. (8) Handelingen Tweede Kamer 1979-79 , 5026. (9) Idem.

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