On April 1, 2021, the Dutch Caribbean Rented Housing Market Measures Act (in Dutch: de Wet Maatregelen Huurwoningmarkt Caribisch Nederland) entered into force on Bonaire. This act also partially applies on tenancy cases in Saba and St. Eustatius. With the introduction of the act, the tenancy law on the BES islands will be changed substantially.
The tenancy law on the BES islands was very outdated. This law, as laid down in part in the BES Civil Code, was more than 80 years old. The BES Rent Assessment Committee Regulation Act (in Dutch: Wet Huurcommissieregeling BES) was also considerably outdated. This regulation act dated from 1939.
With the introduction of the new act and, in connection herewith, the Rent assessment committee and Rent Ordinance Bonaire (in Dutch: de Huurcommissie- en huurprijzenverordening Bonaire), two important changes can be distinguished:
Concluding a fixed-term rental agreement
In the previous law, it was almost impossible to terminate a rental agreement with a tenant who paid his rent properly. This was the case even when parties had entered into a rental agreement for a definite period of time and that period expired. This is because the landlord also needed permission from the rent assessment committee in such a case, to actually terminate the rental agreement. Consent that would only be granted on limited grounds. The result was that a rental agreement for a definite period of time could almost never actually be terminated when it expired.
The new act, however, changes this. A rental agreement can now be entered into for a definite period of time of up to maximum four years. And such an agreement actually terminates (by operation of law) when the specified time expires.
This change applies to all BES islands.
The previous law included the option of conducting a rent assessment. In principle, however, this was only possible if the rented property had cost less than USD 56,000 to build. In that case, a reasonable rent was determined on the basis of percentages laid down by law. Neither the amount of USD 56,000, nor the percentages had been amended for a long time and therefore the rent assessment committee often did not have the authority to conduct a rent assessment, or the outcome of such assessment would not be in keeping with market rates.
In the new act, a rent assessment is possible for everyone. This means that anyone can go to the rent assessment committee to find out what a reasonable rent is for their home. This must be done within 6 months after the (first) rental agreement has been concluded.
In case of a request for a rent assessment, the rent assessment committee will determine a reasonable rent on the basis of a points system. This system is comparable to the system used in The Netherlands. Points are awarded on the basis of the surface area of the rental property, the neighborhood, whether there is a (shared) swimming pool, and the presence of an air conditioning system. Each point represents a certain value and therefore, based on these points, a reasonable rent can be determined.
A liberalization limit applies. The liberalization limit on Bonaire is set at USD 750 per month. If the rent of a home, determined on the basis of the points system, is higher than that amount, this is a private home and the landlord may ask a rent he or she deems fit. The rent assessment committee has no authority to amend such rent. In that case, there is also no maximum annual rent increase, unless this has been laid down in the lease agreement.
However, if the reasonable rent of a home is – on the basis of the points system – determined at an amount lower than USD 750 per month, it is considered a social home. The rent that is determined on the basis of the points system is then the maximum rent that a landlord may charge for the rented property. In that case, there are also rules about a maximum annual rent increase.
For the time being, this change only applies to Bonaire.
Our firm has developed a rent checker that easily calculates the reasonable rent based on the point system. Please note when using the rent checker that if the rent, determined on the basis of the points system, is higher than the liberalization limit of USD 750 per month, the landlord may ask a rent he or she deems fit.
What is remarkable about the first amendment in the law, i.e. the fact that rental agreements that are entered into for a definite period of time now terminate by operation of law, is that the new act does not include any transitional law. As a result, the new act will in principle also apply to existing cases. If a tenant has entered into a rental agreement for three years under the previous legislation, he could have assumed at the time that the agreement would not actually terminate after the expiration of those three years. After all, permission was required from the rent assessment committee at that time. With the new act, this is no longer the case and the tenant is no longer entitled to rent protection after the three years that were agreed upon. This could lead to unreasonable situations. Ultimately, a court will have to judge these types of questions.
The second amendment, regarding the (renewed) possibility of a rent assessment, also requires a comment. Suppose a tenant finds out that a reasonable rent for the property on the basis of the points system is USD 700 per month, while in the rental agreement, which he entered into a couple of months before, a rent of USD 850 per month has been agreed upon. In theory, the tenant can then go to the rent assessment committee to determine that the landlord can only charge USD 700 per month. However, the question is whether a tenant would do this in practice. Especially if the relevant rental agreement has been entered into for a definite period of time. After all, the tenant should then consider that the landlord may be less inclined to extend the rental agreement. The small scale of the islands must also be taken into account here; the landlord is often a known person, or at least someone the tenant will meet regularly.
In theory, the Dutch Caribbean Rented Housing Market Measures Act is a good example of what local customization can look like. However, the question is whether this new act will actually bring about the change that people want to bring about; a balanced system and a good quality home for a reasonable rent.