Current system
The current Article 7:237(3) DCC states that service charges are defined as “the compensation for other goods and services provided in connection with the occupancy of the dwelling. By Order in Council, goods and services may be designated for which the compensation must be classified as service charges.” In this context, the term “Order in Council” refers to the Dutch Service Charges Decree (Besluit servicekosten).
The appendix to the Service Charges Decree contains a list of goods and services for which compensation may, in any case, be passed on to a tenant as service charges. In addition to the items and services listed in the Decree, other items and services provided in connection with the occupancy of the dwelling may also be classified as service charges.
In practice, this has created scope for passing on a wide range of costs as service charges, such as the costs of using a fitness centre, swimming pool or private cinema, even though these are not directly related to the use of the rented residential unit.
Three building blocks, one regime
The new law aims to remove ambiguity by definitively specifying which costs may and may not be passed on as service charges. Only the costs listed in the Service Charges Decree may be classified as service charges, provided that the lease agreement stipulates that (i) these goods and services are provided and (ii) service charges are billed for them.
Article 7:237(3) DCC will refer to the exhaustive list contained in the Service Charges Decree and will stipulate that the Service Charges Regulation may lay down rules concerning the calculation and maximum amount of service charges. As the list in the Service Charges Decree will be exhaustive, the Decree is being modernised and refined.
Furthermore, following the implementation of the Wms, it will be expressly established that service charges may relate only to costs actually incurred and must constitute reasonable compensation (Art. 7:259(1) DCC). The Wms, the amended Decree and the new Regulation will take effect on 1 January 2027.
The Regulation specifies, for each category, how service charges must be calculated and sets a cap on certain items. For example, administrative costs are capped at 2% for costs in the categories of heating and cooling, and electricity, gas and water, and at 5% for all other categories. In addition, there is an absolute cap of €75 per dwelling per calendar year and a minimum of €7.50.
Exhaustive list
The new list in the Service Charges Decree consists of eight categories of goods and services:
- Heating and cooling;
- Electricity, gas and water;
- Movable property;
- Minor repairs;
- Supervision, security and waste;
- Signal transmission;
- Insurance and fund formation; and
- Administrative costs.
For each of these categories, the amended Service Charges Decree specifies in more detail which items and services are included. The aim is to provide greater clarity regarding which costs may be passed on to tenants as service charges.
In addition, the new Service Charges Regulation contains provisions for each category regarding how costs are calculated and sets maximum amounts for certain cost items. Although the categories largely align with the current system, various elements have been clarified, updated (for example, internet access is explicitly included for the first time under the “signal transmission” category) or more precisely defined.
Implications for practice
The exhaustive list makes it easier to distinguish between items and services for which service charges may or may not be billed.
The Wms introduces several important changes for the Rent Tribunal. Under the current system, the Rent Tribunal can review advance payments only for utilities with individual meters. If a tenant wishes to have a component of the other service charges reviewed, this can only be done after the annual service charge statement is issued.
Under the new system, this distinction is eliminated, and the Rent Tribunal can review and determine advance payments for all service charges.
In addition, the Rent Tribunal will gain a new power. If a landlord fails to provide an annual service charge statement or provides an incomplete statement, the Rent Tribunal may determine the amount payable on the basis of prescribed standard amounts, which may result in a low assessment, or set the amount at €0 if the relevant service was not provided. In such cases, the Rent Tribunal will determine the amount payable rather than preparing an annual service charge statement on the landlord’s behalf.
Finally, the thresholds for submitting collective requests will be lowered: the requirement that at least 50% of the tenants in a residential complex participate will be eliminated, making it easier for tenants to act collectively.
Transitional provisions
The new regime applies only to lease agreements entered into on or after 1 January 2027. Existing lease agreements remain subject to current law. As a result, two billing systems may coexist within a single complex, with the associated administrative burden.
To prevent this overlap, the transitional provisions allow for voluntary application to existing contracts: landlords may agree with their tenants that the new rules will also apply to existing contracts as of 1 January 2027. This prevents different billing systems from coexisting within a single complex.
However, this transition does require the tenant’s consent; a unilateral conversion is not possible.
Conclusion
The Wms clarifies the framework within which service charges may be passed on and, for the first time, introduces statutory calculation rules and caps. In terms of substance, the changes to the permitted service charge items are limited; the practical impact for landlords lies in the new calculation system, the stricter requirements for the annual service charge statement and the administrative management of the transition period. Furthermore, the additional powers of the Rent Tribunal must be considered.
It is advisable to identify in a timely manner which items will still fall under the exhaustive list as of 1 January 2027 and to take this into account in new lease agreements. For existing lease agreements, it is advisable to review the service charge provisions and assess whether it is desirable to reach agreements with tenants regarding the voluntary application of the new regime.
If you would like more information or to discuss this topic, please do not hesitate to contact us. Our lease law team would be happy to assist you.
