Understanding co-tenancy

Is principal residence mandatory in contractual co-tenancy?

Most residential leases stipulate that keeping principal residence in a leased property is mandatory. But what happens if there is contractual co-tenancy, and one tenant does not have primary residence in the leased property? From the landlord’s perspective, can that lead to termination of the lease?

This question does not specifically address the situation where the tenants request that one of them be dismissed from the lease, as referred to in Section 7:267(7) of the Civil Code. The court then determines which of the co-tenants has the greatest interest in the lease and which does not, and the landlord has to accept the outcome. The Supreme Court decided this also applies to contractual co-tenants.

What is stated in the lease?

In the absence of a statutory regulation on the obligation to maintain principal residence, the lease is leading. The tenancy agreement almost always states that primary residence is mandatory, but breach of that obligation by one contractual co-tenant does not easily lead to termination of the tenancy agreement.

In the (most commonly used) model of the Real Estate Council (Raad voor Onroerende Zaken), article 22.3 of the general provisions states: “A person who has entered into and signed the lease with the landlord together with one or more others, does not lose their tenancy by permanently leaving the rented property. Even then, they remain jointly liable for the obligations under the lease. A contractual co-tenant can only terminate the lease by giving notice together with the other tenant”.

How did the Rotterdam subdistrict court rule?

In another landmark court case, the landlord claimed termination of the lease and eviction because one of the contractual co-tenants had permanently moved to a foreign country. The subdistrict court rejected the claim stating in article 22.3 that the parties’ intention, while both tenants are jointly and severally liable for the obligations under the lease, are not jointly and severally liable for keeping the main residence. Otherwise, article 22.3 would be a meaningless provision. The lease agreement was therefore upheld.

What is the consequence of this ruling?

The ruling could have unpleasant consequences for landlords. For example, in the case that of two contractual co-tenants, just now the pleasant tenant leaves and the problematic tenant stays behind. Or in the case where a housing association allocates a scarce family home to two contractual co-tenants with children, and one tenant leaves again with the children.

For contractual co-tenants, the ruling obviously offers opportunities. They need not fear that the entire lease will be terminated if one of the contractual tenants leaves. However, the departing tenant should be aware that, in principle, the landlord can still continue to sue him for the payment of the (full) rent.

In conclusion

A good description of the contractual provisions is a must if the landlord wants to hold both contractual co-tenants to the obligation of principal residence. In an event, the court can then assess whether the interest of the landlord or that of the tenant(s) should prevail.

Are you facing problems in the area of contractual co-tenancy as a landlord or tenant? If so, please feel free to get in touch.