Tenants increasingly struggle to recover deposits, rental rights group warns

More and more tenants are not receiving their full deposit, or sometimes any of it, back at the end of their rental period, according to the rental rights group Stichting !WOON.

WOON reports that international tenants are relatively more likely to experience unfair deductions from their deposits, Many international tenants are unaware of their rights, including the right to an independent check-in/check-out at the end of a tenancy and the ability to have disputes reviewed by the Rental Committee.

Unlike in countries like the United Kingdom, where the Tenancy Deposit Scheme is mandatory, the Netherlands has no central deposit system. Landlords hold deposits in their own accounts and earn the interest. With large property portfolios and high deposits, sometimes tens of thousands of euros, this can become a lucrative practice. If a landlord goes bankrupt, tenants often lose their deposit because the funds are not kept separate.

There is also no obligation to use an independent check-in/check-out service to objectively evaluate any damage at the end of a tenancy. This often leads to disagreements and disputes over how much of the deposit can be withheld.

In major cities like Amsterdam, there are frequent reports of unusually high security deposits, sometimes reaching tens of thousands of euros (for example, 8,600 euros), that are not fully refunded. Last year, 223 tenants in Amsterdam alone reported not receiving their full or fair security deposit, sometimes involving very large sums. When a landlord unjustly withholds a deposit, tenants frequently have to take legal action themselves to reclaim it, which can be time-consuming, stressful, and costly.

The Good Landlordship Act, in effect since July 1, 2023, limits security deposits to no more than twice the basic rent. Deposits of 8,600 euros are only legal if the monthly rent is 4,300 euros.

Landlords must return the deposit within 14 days of the tenancy ending, or within 30 days if deductions for damage are made, accompanied by a written account of the deductions. Every municipality must now provide a reporting point where tenants can anonymously report improper landlord practices, and municipalities can fine landlords who violate the rules.

WOON’s report states that landlords often exploit expats’ departure dates. They may wait to dispute the deposit until the tenant has already flown abroad, hoping the tenant will not pursue legal action from another country. Inspection reports at check-in and check-out are sometimes carried out in the Dutch language only, leading international tenants to sign off on pre-existing damage.

WOON and other rental law experts report that some landlords also attempt to profit from tenants’ security deposits by repeatedly claiming minor damages, cleaning fees, or other charges to withhold portions of the deposit.

"We're increasingly seeing private landlords not refunding their security deposits, or only partially. International tenants, in particular, seem to be frequent victims of this," the organization stated. "While WOON supports the Good Landlord Act, we believe it falls short in this regard. Unjustly withholding deposits should be punishable by fines to better protect tenants."

Additionally, with the Affordable Rent Act taking effect on July 1, 2024, the powers of the Rental Committee have been strengthened in some areas. Tenants in the mid-rent range of up to approximately 1,150 euros can now more easily resolve disputes over the true base rental price by going through the Committee, rather than having to file a case with a subdistrict court, making legal action far more accessible.

Tenants are advised from the beginning of the tenancy to document every detail with extensive photos and videos (scratches, outlets, inside cabinets). Request a mid-tenancy inspection about two weeks before moving out, giving you time to address any issues. And when filing a dispute, always include the municipality in the correspondence, as required under the Good Landlordship Act.