Real estate platform ROZ removes automatic inflation indexation from its model contracts

Following conversations with the Netherlands Authority for Consumers and Markets (ACM), the Dutch Real Estate Council (in Dutch: Raad voor Onroerende Zaken, or ROZ) has adjusted the model contracts for renting office and retail spaces. In the general provisions of its model contracts, the real estate platform linked future rent adjustments to the consumer price index (CPI). As a result, rents automatically went up if the inflation increased. The inclusion of automatic adjustments to the rent in general provisions of model contracts is at odds with competition rules. This should be negotiable. Since ROZ has made these adjustments to its model contracts, lessors and lessees are able to negotiate about any adjustments to the rent.

What was this case about?

ROZ is a platform for professional real-estate organizations, and provides model contracts to market participants. Nine professional organizations and trade associations are members of ROZ, including associations that represent lessors. ROZ’s model contracts are considered the market standard when drawing up rental contracts for office and retail spaces. The general provisions of these model contracts stipulated that, for the duration of the contracts, the rent was automatically increased each year with the CPI, a key indicator for inflation. Due to the high inflation, several lessees recently faced enormous price increases.

Trade associations cannot give its members advice about prices, such as automatic adjustments to the rent. After all, this type of advice restricts competition. However, individual lessees and lessors can negotiate about future adjustments to the rent. Agreements made in advance about rent offer both lessor and lessee certainty, and can benefit the operations of both parties.

Changes to ROZ’s model contracts

Following conversations with ACM, ROZ changed its model contracts for office and retail spaces. Instead of only relying on the CPI for adjustments to the rent, users of the model contracts can now decide by mutual agreement through negotiations whether or not they wish to include an automatic adjustment to the rent, and also the way in which they wish to do so. Besides using the CPI, users of model contracts can also decide to use a fixed percentage, an index of their choice, or decide against using an automatic adjustment of the rent altogether. Including a provision with a maximum percentage is also possible, which was put forward by several organizations for lessees in Dutch media in late January. The change offers lessors and lessees more room for negotiation about the adjustment to the rent in their contracts. ACM sees to it that ROZ’s adjusted model contracts are implemented properly.

Prohibited recommendations made by trade associations

Trade associations or associations of undertakings cannot restrict competition by giving advice (for example through model contracts) about prices, price adjustments, or other competition parameters.

For more information: Guidelines regarding arrangements between competitors

Reporting illegal arrangements to ACM

If you suspect a trade association of giving illegal advice, you can report this to us:

Submitting your tip-off or indication to ACM