European Court to rule on rent increase clauses: Dutch court refers rent dispute to the European Court

The Amsterdam Subdistrict Court has referred six questions for a preliminary ruling to the Court of Justice of the European Union (CJEU) regarding the validity of rent adjustment clauses. This is a significant step with far-reaching consequences: the CJEU’s answers will not only apply to this case, but will set the rules for the whole of Europe. The proceedings concern tenants of a residential complex with a tenancy agreement that allows the landlord to increase the rent annually by the CPI index plus a surcharge of up to 7%. The tenants argue that this clause is unfair and should therefore be set aside.

How did it come to this?

This stems from a ruling by the Supreme Court in November 2024. The Court ruled that the indexation clause (CPI) and the surcharge clause must be assessed separately, and that a surcharge of up to 3% on top of the CPI is not, in itself, unfair. However, the Supreme Court added an important caveat: in individual cases, this may be different, depending on the specific circumstances at the time the agreement was concluded.

This judgment has attracted some criticism. The key question is whether the Supreme Court is indeed permitted to assess the indexation clause and the surcharge clause separately: together, these two clauses form the rent adjustment mechanism, and it is questionable whether a split assessment does justice to the combined effect experienced by the tenant. In addition, the question arose as to whether the Supreme Court’s reasoning would also hold up in the case of higher surcharges of 5% or 7%. It is now clear that these questions will not be answered through national channels, but directly by the European Court of Justice.

What are the six questions put to the European Court of Justice?

The Amsterdam District Court has asked the CJEU, among other things, the following:

1. Can the indexation clause and the surcharge clause be assessed separately?

2. Must the combined effect of both clauses also be assessed? And must both clauses be set aside if that effect significantly disadvantages the tenant?

3. Is the Supreme Court’s ruling on the 3% surcharge in line with European law?

4. Does it matter that the rent increases automatically, without the landlord notifying the tenant of this separately?

5. Does the tenant’s individual situation count, or does the court consider an average tenant?

6. Is a reference to a price index sufficiently transparent if the tenant is generally aware of that index?

The magistrate notes that there are serious indications that rent increase clauses are not fully in line with European law. The key question is whether the tenant could have understood in advance how high the rent increase would be and whether that increase could be verified retrospectively.

What are the potential implications for landlords?

The stakes in these proceedings are high. If a rent increase clause is found to be invalid, it will be set aside, meaning that tenants can claim back any rent increases paid on the basis of that clause. Furthermore, it will no longer be possible to increase the rent on the basis of that clause. A negative ruling by the CJEU would affect all similar tenancy agreements and would therefore have a market-wide impact extending far beyond this single case.

Even a 3% increase is no licence to do as one pleases

It is worth noting in this context that the Amsterdam Court of Appeal had already ruled in March 2026 that a rent increase clause of up to 3% was unfair in a specific case. The reason: an annual increase of 3% on top of inflation may seem modest, but leads to a substantial rise in rent over time. With an initial rent of €1,500 on 1 July 2019, the rent as at 1 July 2024 had already reached €2,121, an increase of over 41% in five years. Furthermore, in that case, the landlord was unable to substantiate why the 3% increase was actually necessary. A low surcharge percentage therefore does not automatically provide protection.

When will we know more?

The parties are first given the opportunity to comment on the wording of the questions referred for a preliminary ruling. The questions must then be formally referred to the CJEU. The CJEU’s judgment is expected approximately 16 months after the questions have been referred.