In a setback for home owners hoping to earn some extra money by renting their house or apartment online though services such as Airbnb, the Amsterdam Criminal Court has ruled that hiring a private home for a short period falls under "commercial exploitation."

This means that all homes in Amsterdam that have owners associations, the vast majority of homes in fact, may not be allowed to be rented out.

Court case

The ruling came out of an earlier court case brought by an apartment owner who was letting tourists stay in his house for a few days once or twice a month. The homeowners association from his apartment complex had decided that a "short stay, hotel or bed-and-breakfast operation for less than one month" should not be allowed in an apartment complex.

The association's lawyer then summoned the property owner to stop letting the property to tourists, on pain of a 6.000 euro fine. The property owner then went to court with the request to set aside the decision of the owners association.

The judge, however, agreed with the association. According to the verdict, renting the apartment for short periods is in violation of the residential complex’s deed of division, because the short stay formula does not meet "use in accordance with the residence" as prescribed in the deed, but instead falls under commercial operation.

This ruling comes after the Amsterdam municipality released new rules for renting to tourists in April 2013.

Implications for renting

According to real estate law attorney Thomas van Vugt from AMS Lawyers, such a clause is almost always in a deed of division or in the rules of an association and thus the judgment may have a major impact on Airbnb rentals in Amsterdam.

"Unless an association gives explicit written permission, a property owner may not rent his own home for a short stay," concludes Van Vugt.

Reaction from the municipality

In June, the municipality of Amsterdam said vacation rental was a boost for tourism and the economy of the city.

"Vacation rental meets the needs of many foreign tourists who want 'to live like a local' and it makes Amsterdam an attractive destination," said Councillor for Housing Freek Ossel.

The municipality has been active in shutting down illegal hotels; that is, those houses that don’t comply with the regulations. This includes ensuring there is no nuisance to neighbours, that there is adequate fire safety, the property is not rented to more than four people and that tourist taxes are paid.

According to the municipality, the extent of this form of rental is still limited; last year it was less than two per cent of the total number of overnight stays in Amsterdam.

A spokesman for the municipality explained, "We are constantly looking to see if the rules need to be strengthened and how we can make the rules as clear as possible, so we will certainly take this [ruling] into consideration."

Source: Volkskrant