Initial rent assessment by the rent tribunal: what does it mean for landlords?

Since the entry into force of the Affordable Rent Act on 1 July 2024, the assessment of the initial rent by the Rent Tribunal has become more relevant than ever. For landlords in the regulated segment, it is important to know when a tenant can submit a request for assessment, how the Rent Tribunal evaluates the fairness of the rent, and what the consequences are if the rent is found to be too high.

When is an assessment of the initial rent possible?

The Rent Tribunal can assess the initial rent at the tenant’s request, but only within specific time limits:

• For an open-ended tenancy agreement: within six months after the start date.
• For a temporary tenancy agreement concluded before 1 July 2024: up to six months after the agreement has ended.
• For temporary tenancy agreements for specific groups of tenants concluded after 1 July 2024 (for example, international students or co-parents): up to six months after the agreement has ended.

Note: It is not possible to circumvent this assessment by, for example, introducing a new tenant into the existing contract through substitution. The Rent Tribunal will look at the actual commencement of the tenancy agreement, regardless of the legal construction.

How is the rent assessed?

The Rent Tribunal evaluates the reasonableness of the rent on the basis of the housing valuation system (WWS). The following applies:

• < 187 points: the dwelling falls within the regulated segment. The maximum reasonable rent is determined on the basis of the WWS.
• ≥ 187 points: the dwelling falls within the liberalised (free) segment. The agreed rent is in principle considered reasonable, unless there are defects or an all-in rent.

The assessment is carried out ex tunc: the situation on the commencement date of the tenancy agreement is decisive. This raises the question of which version of the WWS applies: the old or the new? The law itself makes no distinction, as in principle there is only one WWS. However, in practice (and according to the Rent Tribunal’s website), the old WWS is applied to tenancy agreements entered into before 1 July 2024. This approach aligns with the principle of legal certainty: landlords must be able to rely on the regulations that were in force at the time the contract was concluded.

What if the rent is found to be too high?

If the Rent Tribunal determines that the agreed rent exceeds the maximum reasonable rent, the rent will be reduced to the level permitted under the housing valuation system (WWS). This lower rent applies retroactively from the commencement date of the tenancy agreement.

For landlords, this not only means a structurally lower rental income but also that any rent paid in excess must be reimbursed to the tenant. It is therefore essential to align the rent with the WWS points when entering into a tenancy agreement.

Procedure in brief

The procedure before the Rent Assessment Committee is accessible and begins with a request from the tenant. The Rent Assessment Committee may conduct an inspection of the property and gives the parties the opportunity to respond. This is followed by a hearing and a ruling. The parties may request a decision from the subdistrict court within eight weeks of the ruling. If no one does so, the ruling becomes binding. No further appeal is possible.

Conclusion

When entering into a tenancy agreement, it is important for landlords to carefully check whether the rent is in line with the WWS. Certainly in the regulated segment, the risk of a review is real — and the financial consequences can be significant. The assessment of the initial rent is therefore not only a means of protection for tenants, but also a point of attention for landlords who want (and need) to remain compliant.


Do you have any questions about the initial rent or the application of the WWS to your property or properties? Please feel free to contact me.