Leaseholders in Amsterdam, Rotterdam, The Hague, Schiedam and Vlaardingen should take action in time

Because of our expertise and experience, many municipalities and leaseholders engage us to guide them through the expiration, reissue, conversion, or amendment of leasehold contracts after receiving a proposal or offer from the municipality – the landowner. This is understandable, as it is indeed a complex matter.

This mainly concerns leasehold contracts in the municipalities of Amsterdam, The Hague (Bezuidenhout, Bohemen and Vogelwijk), Rotterdam, Schiedam and Vlaardingen (Holy).

We want to be there for you and are happy to help. How does it work exactly?

Ownership and limited rights
Ownership is the most comprehensive right you can have in a thing. Things are tangible objects that are subject to human control.

A limited right is a right derived from a more comprehensive right that is preserved with the limited right. You might want to read that one twice. A more comprehensive right is, for example, a right of ownership.

We have a closed system, meaning that all known limited rights are enshrined in law. Limited rights can be divided into rights of use and security rights. Rights of use include usufruct, easements, leasehold, building rights, and condominium rights. Security rights include pledges and mortgages.

Easements, leasehold rights, building rights, apartment rights, and mortgage rights are registered property. Registered property is property for which transfer or establishment requires registration in designated registers. Such registers are kept by the land registry. Registration is done by entering a copy of a deed in the designated public registers. This deed must be a notarial deed. This means that for the establishment or transfer of easements, building rights, apartment rights, mortgage rights—and of course, leasehold rights—you always have to visit a notary. It's best to have it properly arranged.

What is leasehold?
A leasehold is a property right to use land owned by someone else. With municipal leaseholds, the municipality owns the land. The special and general leasehold terms and conditions stipulate these terms and the compensation (the ground rent) the leaseholder owes the owner for the use of the land. These terms and conditions vary from municipality to municipality.

Purpose of leasehold

The original purpose of leasehold was to prevent land speculation. Leasehold revenues benefited the community, helping to finance communal facilities. The leasehold system makes buying a house more affordable. After all, you don't have to buy the land yourself. You only pay a periodic fee for the use of the land.

Forms of leasehold

There are various types of leasehold. For example, land can be leased in perpetuity. The value of the land subject to ground rent is then fixed forever and cannot be adjusted. However, there are also leasehold contracts with an end date, during which the value of the land, and therefore the ground rent amount, can be adjusted.

Buy bare ownership

Leasehold can also be converted into freehold. The bare owner (often the municipality) then sells the bare ownership of the land to the leaseholder. The leaseholder must pay a purchase price for this, transfer tax is due, and a mortgage deed must be executed. If the leaseholder holds both the bare ownership and the leasehold, the leasehold is extinguished by the merger, and the acquirer acquires full ownership. They will then never again be faced with an expiring leasehold contract or a change in the lease.

Expiring leasehold contracts
Because of our expertise and experience, many municipalities and leaseholders engage us to guide them through the expiration, reissue, conversion, or amendment of their leasehold contracts. This primarily concerns leasehold contracts in the municipalities of Amsterdam, The Hague (Bezuidenhout, Bohemen, and Vogelwijk), Rotterdam, Schiedam, and Vlaardingen.

Reissue of leasehold land in Bezuidenhout, The Hague. Take action.
In part of The Hague's Bezuidenhout district, the current leasehold expires on December 31, 2025. In accordance with the General Provisions of 1986, the Municipality of The Hague, as owner, will make an offer to reissue the leasehold to the existing leaseholders approximately two years before the leasehold expires. The leaseholders received this project-based offer in March 2023. The basis for the leasehold is the land value, which was appraised by an external appraiser on behalf of the Municipality of The Hague. The appraiser must take into account the valuation instructions of the Municipality of The Hague. The Municipality of The Hague has set the leasehold percentage at 4% for 2023. This is based on Article 8.3 of the General Provisions of 1986 revised 1993/2008. These offers and appraisals are causing considerable unrest and concern among the existing leaseholders. We understand this.

New leasehold policy for Vlaardingen. Take action.
In Vlaardingen, existing leaseholders (in the Holy neighborhood) have also been informed by the municipality. The new leasehold policy of the municipality of Vlaardingen takes effect on April 1, 2023. For the time being, nothing will change for leaseholders under the new policy, unless their leasehold contract expires or they choose to amend it.

Options for the sitting leaseholder

The sitting leaseholder has three options:

1. Do nothing.
2. He can acquire bare ownership of the land from the municipality for a fee. The leasehold then expires.
3. He can convert the leasehold right into a new perpetual leasehold.

If you do nothing, including not responding to the municipality, the municipality will at some point contact the leaseholder with a new, more expensive contract, or – in extreme cases – with a notice to remove the buildings on their land.

If the leaseholder wishes to obtain bare ownership from the municipality, we will then prepare the deed of transfer once the agreement with the municipality has been signed.

If the leasehold expires and the leaseholder wants to convert it into a new perpetual leasehold, they will pay a higher ground rent. If they choose to do so after mid-July, the terms are less favorable. Therefore, it's wise for the leaseholder to check now when their contract expires, so they still have the opportunity to decide whether to amend their contract before mid-July, under the terms of current policy. We are happy to handle the notarial conversion process at a reasonable price for the leaseholder.

Favorable arrangement

Especially if the leasehold expires within the next five years, it can be advantageous for the leaseholder to choose between the various options this year. This is not only because the leaseholder would otherwise pay more, but also because a proposed sale of the property on leasehold land could lead to financing problems for the prospective buyer. The expiration of the leasehold is too much uncertainty for the mortgage lender. Therefore, lenders will be less inclined to grant a mortgage to such a buyer.

Extension of response period

To minimize problems with the sale of homes for which no application has yet been submitted, the municipality of Vlaardingen contacted leaseholders in May 2023 whose leases expire between 2025 and 2028 and who had not submitted a request before April 1, 2023. This concerns approximately 180 leaseholds, primarily in the Holy district. These leaseholders received an offer for sale in bare ownership or a new perpetual leasehold based on a new appraisal and the old leasehold policy, just like those who submitted a request before April 1, 2023. Leaseholders who take advantage of this targeted offer from the municipality will be charged the processing costs—just like the leaseholders who submitted a request. In addition, the notary fees will be borne by the leaseholder.

Our advantageous offer for leaseholders

At the municipality's request, we have informed them that we, as civil-law notaries, are willing to provide our notarial services to leaseholders at a moderate fee. Please note that the notary's fees consist largely of disbursements (costs incurred by the notary to carry out the assignment, such as land registry fees) and VAT. Upon request, we are happy to provide the leaseholder with a contract of engagement and a quote, so they know exactly what to expect in advance. This helps prevent surprises.

Land policy instrument and Leasehold Memorandum

In the municipality of Vlaardingen, leasehold has been the primary instrument for regulating land use in the allocation of (building) land for over 150 years, initially without general terms and conditions. The first general leasehold terms and conditions date back to 1910. Over the years, these terms and conditions have been regularly updated. Despite the fact that leasehold land allocation is no longer the norm and an active policy has been pursued since the 1990s to enable the conversion of leaseholds to full ownership, the municipality still possesses a substantial stock of existing leaseholds (approximately 10,500), with varying terms and various general leasehold terms and conditions.

The current leasehold policy was established in 2014. Current circumstances necessitate a recalibration of the existing policy. On the one hand, optimizing the leasehold policy can contribute to improving the municipality's financial position, while on the other, there is a desire from those working in the field to standardize and update the policy. Furthermore, the significantly changed real estate market situation is important: historically low interest rates in recent years and the development of land prices.

The 2022 Leasehold Policy Document elaborates on the framework established in the Land Policy Document for the new leasehold policy. Within this framework, the municipal executive and the administrative organization implement the various aspects of the leasehold policy.

We're happy to help you. And we're good at it.
Leasehold terms and conditions are not easy to read. We are familiar with the leasehold terms and conditions of most municipalities in the Rotterdam The Hague Metropolitan Region.

Get well-informed if you're considering acquiring land under a leasehold or converting it to freehold. If you're a leaseholder in Amsterdam, The Hague (Bezuidenhout, Bohemen, and Vogelwijk), Rotterdam, Schiedam, or Vlaardingen, please contact us by phone at +31 10 44 53 777 or email at service@maesnotarissen.nl and inform the municipality that you've chosen our firm. We'll guide you through the often-complex rules and regulations in a cost-effective manner, representing the interests of all parties involved in the transaction, including, explicitly, the weaker party: the leaseholder with limited knowledge.