The topic of ‘shared-housing’ is increasingly becoming of interest for clients who invest in residential real estate portfolios. In short, shared-housing can be described as the use of a residential unit by several people who are using a single room for private use and who share the bathroom and the kitchen (and possibly a living-room) with their co-tenants.
From a legal standpoint, shared-housing defers from letting rooms because of the fact that the landlord does not let out single rooms to each person, but lets out the whole unit to several people under one lease agreement or to one person who is granted the right to sublet single rooms in the unit.Letting out a residential unit for shared-housing is often more profitable than letting out a unit to one individual because of the simple economics that there is a significant housing shortage and several people can spend more than one person. It is also more profitable than letting out rooms because for shared-housing, setting the amount of rent it is not regulated by law, whereas setting the amount of rent for a single room falls under the rent control ceiling and is regulated by law. Depending on the point system that establishes the rent that can be asked for a single room, the sum of the rent per room may be substantially lower that the unregulated rent that can be asked for a whole unit (provided that whole unit does not fall under the rent control ceiling).
Shared-housing does, however, require a permit from the Municipality of Amsterdam.
Recently, the Municipality of Amsterdam (the biggest market of shared-housing) introduced renewed Housing Regulations 2020 (HR 2020) with respect to shared-housing.
The changes, which are in force as of 1 of April 2020, are briefly summarized as follows:
- A lessor must enter into a lease agreement with each person for each single room. This has been considered controversial because of the fact that the amount of rent for a room falls under the rent control ceiling and could imply a loss of income. This measure may lead to litigation, as the Housing Act (the legal basis for the HR 2020) is not meant to regulate rent.
- A quota will be introduced: only 25% of the houses in a building can be used for shared-housing. Above that, there is a quota per area.
- Units with four or more persons must comply with noise emission standards;
- In principle, a maximum of six people is allowed to share a house unless one can prove that the unit is suited for more than six people.