Difference between Fixed-Term and Indefinite Rental Agreements

The difference between a fixed-term and an indefinite rental agreement is crucial. A fixed-term agreement (Article 7:271 of the Dutch Civil Code) terminates automatically, offers less stability but provides full rent protection. An indefinite agreement (Article 7:220 of the Dutch Civil Code) requires termination with valid grounds and notice, accompanied by strong tenant protection. After a series of fixed-term agreements, the contract converts to an indefinite one. Advantages of a fixed-term agreement: flexibility for the landlord. Disadvantages: uncertainty for the tenant. Tax implications: fixed-term agreements often do not incur the owner-occupied home tax. Disputes are more common with fixed-term agreements due to automatic termination. In practice, courts often enforce continuation in cases of abuse. Choose wisely when entering into an agreement. (198 words)