What applies when renting out a townhouse?

Renting out a townhouse requires understanding several laws and regulations to ensure the process is carried out correctly. It is important to know which rules apply, whether any permits are needed, how rent should be set, and how agreements and notice periods must be handled. You also need to be aware of the tenant’s security of tenure and how it affects your rental. With the right knowledge, you can make the entire process smooth and legally compliant.

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“A detailed inventory list for a furnished rental reduces the risk of misunderstandings and disputes.”

When you rent out your townhouse, it is important to know the laws that apply. For most private rentals, such as a townhouse, the Private Rental Act is used. This law gives the landlord greater freedom when setting the rent and means the tenant does not have security of tenure. This means the tenant has no right to stay after the rental period ends.

Keep in mind that if you rent out more than one property, or if the rental is considered business activity, other rules may apply.

If you own your townhouse as freehold or leasehold, you usually do not need a permit to rent it out. If the townhouse is part of a housing cooperative, you need approval from the board before renting it out. Therefore, it is important to check the ownership form before you start renting.

When renting out your townhouse, it is important to set a reasonable rent. According to the law, the rent cannot exceed your capital costs and operating costs. The capital cost is an imputed interest on the property’s market value, often around 4 percent. Operating costs include expenses such as electricity, water and heating. If the townhouse is furnished, you may add up to 15 percent to the rent for wear and tear on the furniture.

When renting out your townhouse, you should have a written rental agreement that clearly outlines the terms. According to the Private Rental Act, the following notice periods apply:

This means you must notify the tenant at least three months in advance if you want to end the agreement. The tenant only needs to give one month’s notice. Clear agreements and knowledge of the notice rules make the rental process smoother.

Read also: What is the notice period when renting out a condominium?

When renting out a townhouse under the Private Rental Act, the tenant does not have security of tenure. This means they do not have the right to remain after the agreement expires or is terminated, unless you agree otherwise. This gives you greater flexibility as the landlord.

If you plan to rent out your townhouse furnished, it is important to create a detailed inventory list. This list should include all furniture and items left in the home, along with a description of their condition. By having both you and the tenant sign the list, you reduce the risk of future disputes regarding damage or missing items. Taking photos is also a good idea.