Buying a home in the Netherlands as unmarried partners

If you and your partner are planning to buy a home in the Netherlands, you may have already discovered that there is a lot to this process. Joep Ertem from Westport Notarissen explains some crucial things you should know about co-buying a house, such as compensation claims and cohabitation agreements.

Many people who take out mortgages and buy property in the Netherlands are couples who are either married or in a registered partnership. For couples in unmarried relationships who wish to buy a house, however, the process is slightly different. 

Here are a few things you need to know about co-owning a property in the Netherlands:

Compensation claim

One crucial facet to understand about buying a home with your partner is financing the purchase sum of the property. Private funds are occasionally used by one of the partners to buy the property.

When one partner contributes a greater share of his or her private funds than the other, a compensation claim arises from that partner against the other partner. A compensation claim means, for example, that one person invests more than the other person in a joint home. This gives rise to a claim against the other person in favour of the paying person. The individual who invests no money or less money will have to pay that amount back to the other individual. This also applies to people who co-buy their home without being married to one another or having a registered partnership.

Though it is not a legal obligation, it is possible to put this claim down in writing. Indeed, it is quite common for cohabiting partners to mention this in their notarial cohabitation agreement.

Unmarried cohabitation

The rise and calculation of this claim is regulated by law for spouses and registered partners. For unmarried cohabitors without a registered partnership, however, it is not. To ensure that it is crystal clear which rules apply to them and that the claim is recorded unambiguously, cohabitors are always recommended to mention this claim in their cohabitation agreement.

The following example should clarify why having the claim recorded is important:

Let’s imagine a couple named Mark and Fiona who are planning to buy a property together. Mark and Fiona’s aim is to become owners - each for an equal share of 50%. The value of this property is 500.000 euros. They take a mortgage loan of 300.000 euros, in addition to which Mark invests 200.000 euros of his own money in the property. Fiona has not made an investment towards the property. Afterwards, they make no further agreements concerning this payment.

Though Mark and Fiona would become owners on a 50 - 50 basis, Mark has invested 200.000 euros more than Fiona. This means that Mark paid 100.000 euros (his 50% share in the ownership) for himself and 100.000 euros for Fiona (her 50% share in the ownership). Unfortunately, their relationship comes to an end and they decide to sell the house.

Cohabitation agreement

Both people were each entitled to 50% of the property. Thus, they are each entitled to 50% of the sales proceeds. However, the question remains: How will Mark’s claim be treated in this matter due to his overpayment? After all, they have not made a cohabitation agreement in which this claim could have been recorded.

As previously mentioned, there are no statutory rules regarding compensation claims that apply to cohabitors. If cohabitors agree to put their investments and compensation claims down in writing, this can be included in a cohabitation agreement made by a notary. The moment a cohabitor wants to enforce the compensation claim, he or she can simply refer to the cohabitation agreement in which this claim was mentioned.

Compensation claim

A compensation claim may be put down in writing in a cohabitation agreement, as stated above. You may regulate that your investment always remains the same amount (nominal) or that the invested amount could change due to increase or decrease in value of the property (investment doctrine) that was the object of investment.

Furthermore, you can also include provisions in the cohabitation agreement regarding:

• What should happen to the claim when the relationship ends due to separation
• When the claim can be enforced
• What should happen to the claim when one of you dies, as you may decide that the claim is passed on to your heirs

If you aren't sure what should be included in your particular situation, it is best to contact a notary.

What happens if there is no cohabitation agreement?

As there is nothing regulated by law in relation to compensation claims for cohabitors, case law (court decisions) will have to be taken into account. In practice, compensation claims are often only invoked once the relationship has ended due to separation. If cohabitors do not separate on good terms, opinions may differ on the right to compensation; the cohabitors will then have to start a court procedure to ascertain which one of the partners is entitled to a claim and what the claim size is.

The claimant-cohabitor is obligated to prove the existence of this claim and its size, which may be a very difficult task to realise. The appeal must namely be well-founded and the other cohabitor may be able to provide counter-evidence.

In addition, an unrecorded claim may expire after a certain amount of time, which means you run the risk of getting nothing back at all. Also, the court will have to assess whether you are entitled to this compensation claim. Proceedings can take a long time and can incur substantial costs.

Contact a notary

The best way to navigate the cohabitation agreement and the compensation claims is to consult a notary. Notaries are experts in Dutch law and can assist you several matters, such as drawing up a cohabitation agreement, taking out mortgage loans, and acquiring real estate. 

Do you need help with your Dutch cohabitation agreement? Westport Notarissen is an expat notary firm that can determine precisely what is needed in your case. Get in touch with one of their legal experts today.