Amsterdam ground lease holders get last chance to make advantageous transfer

Amsterdam ground lease holders get last chance to make advantageous transfer

Leaseholders who have not switched to the new leasehold system will be given one more chance to do so by the municipality.
This sensitive concession has come about under pressure from the Netherlands Authority for the Consumer and Market.

Alderman Marieke van Doorninck (leasehold) wrote this to the council on Wednesday. There are approximately 35,000 regretful tenants eligible for this new scheme, which represents 15 percent of the leaseholders in Amsterdam. Van Doorninck thus bowed to the pressure of a growing group of critics of the leasehold policy, which now includes bodies such as the ACM. Earlier Van Doorninck and a majority in the council found that the leaseholders who had not switched had ‘plenty of time’.

For some time now, there has been criticism of municipal actions toward leaseholders, residents and businesses who must periodically pay a fee for the land in Amsterdam. Approximately 80 percent of the land within the municipal boundaries is owned by the municipality. This earns the capital tens of millions of euros annually.

A few years ago, the municipality introduced a new ground lease system in which leaseholders were given the opportunity to buy off their leases in one lump sum in perpetuity. Until January 8, 2020, there was an opportunity to switch to this new system under favorable financial conditions. Approximately 85 percent of the leaseholders applied before the expiry of that deadline. But now that the rent is rising sharply under the influence of the rising WOZ values, there are more and more leaseholders under the old system who feel duped. For them, there will now be a regretful tenant scheme.

Not clear enough
This regulation comes about under pressure from various external experts, such as the Consumer and Market Authority. The ACM has looked into the question of whether the municipality is acting fairly towards leaseholders. Although according to Van Doorninck the municipality cannot be blamed legally, the supervisor believes that the municipality has not warned clearly enough about the financial consequences of not switching.

“According to the ACM, the information provided by the municipality (…) may not have been clear enough for a group of consumers to appreciate the importance of making an application under the temporary conditions,” writes Van Doorninck. Researchers from Deloitte and consultancy Berenschot also concluded earlier that the municipality could have been more accommodating towards tenants.

In concrete terms, the regulation means that leaseholders can make use of the advantageous calculation method from before January 8, 2020 one more time. Leaseholders who are affected will have six months to make the switch. Many leaseholders will not do so, as they have deliberately not switched to the new system due to specific circumstances, says Van Doorninck.

Recently, the Lower House also spoke out on leasehold policy. A motion calling for better consumer protection for leaseholders was adopted by a majority of the House. The House also believes that the Netherlands Authority for the Financial Markets should supervise leasehold schemes.

Opposition parties reacted excitedly to Van Doorninck’s turn. CDA and VVD in particular have in recent years sharply criticized the businesslike manner in which the city deals with leaseholders and urged for leniency. Erfachtersbelangenvereniging AWEV is also pleased and calls the interference of the ACM ‘a necessary first step’.

Bron: Het Parool

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