Case C-797/26, Woonstichting Lieven de Key II – indexation, a surcharge, and one clause or two
The housing association’s first case in Luxembourg, about a clause putting legal costs on its tenants, was decided on 1 October 2026. Its second goes to the rent itself.
Facts
Nineteen tenants have brought proceedings against Stichting Woonstichting Lieven de Key before the Rechtbank Amsterdam. Their tenancy agreements contain a rent adjustment provision that combines a price indexation clause with a second method of increasing the rent: a surcharge up to a maximum percentage determined by reference to the value of the property. The provision also states that the adjusted rent applies even if the tenant has not been notified of the adjustment separately. In a preliminary ruling of 29 November 2024 in other cases (ECLI:NL:HR:2024:1780), the Hoge Raad held that an indexation clause and a surcharge clause contained in the same provision are separate terms, whose fairness must be assessed separately while taking their cumulative effect into account, and that a clause allowing an annual surcharge of at most 3% on top of consumer price indexation is not, absent additional circumstances in an individual case, unfair. The Rechtbank asks the Court of Justice whether that approach is consistent with Directive 93/13, and raises several further points about how such clauses are to be assessed.
Questions Referred
1. Does EU law preclude the splitting of a provision into two clauses, where that provision comprises both a price indexation clause and a second method for increasing the (rent) price, and, if such a split is possible, must those clauses then be assessed separately as to their fairness, in the sense that, if one clause is found to be unfair, the other clause, namely the indexation clause, may remain in force?
2. If such a split is possible, must the cumulative effect of both clauses then be assessed, and must both clauses be rendered inapplicable where the cumulative effect is such that it is held that there is a significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer (judgments of the Court of Justice of the European Union of 21 April 2016, Radlinger, [C-377/14,] ECLI:EU:C:2016:283, and of 10 September 2020, [A (Subletting of a social housing dwelling), C-738/19,] ECLI:EU:C:2020:687)?
3. Is the ruling of the Hoge Raad (Supreme Court of the Netherlands) that a rent adjustment clause is not to be regarded as unfair in line with EU law:
a. if, although the clause itself does not specify the grounds on which the price may be adjusted, the trader subsequently relies on grounds for increasing the price after the contract has been concluded? Does it matter in that regard whether the grounds relied on are plausible? Is a maximum surcharge percentage – determined on the basis of the value of the property let, and by which the rent may be increased – a sufficiently clear method of adjusting the rent, and is an increase in the value of a property a sufficiently valid ground for adjusting the rent?
b. if the clause can lead only to a rent increase and not to a rent reduction?
c. if termination of the tenancy agreement is legally possible, but actual termination is not an option for the tenant due to the situation in the housing market?
4. Does it affect the fairness of the rent adjustment clause if the provision states that the adjusted rent applies even where the tenant has not been notified separately of the adjustment, as stipulated in the rent adjustment clause in question?
5. To what extent must the assessment of the fairness of a surcharge clause take into account the maximum possible rent increase foreseeable at the time when the contract was concluded, in relation to the possible increase or decrease – as foreseeable at that time – in the income of the individual tenant concerned and his or her ability to continue to pay the increased rent (in other words, to what extent must that assessment take account of individual circumstances, for example where a tenant receives a benefit under the Algemene Ouderdomswet (General Law on Old Age Pensions) and a decline in real income is the only outcome to be expected)?
6. Does the exception referred to in point 2(d) of the Annex to Directive 93/13 preclude an (otherwise lawful) price indexation clause from merely referring to a specific percentage published annually by an independent national body, without the method by which the price is adjusted being explicitly described in the clause, where the consumer is generally familiar with that method?
Sources
OJ notice C/2026/5208 (EUR‑Lex) · Case file on CURIA · Hoge Raad, 29 November 2024 (ECLI:NL:HR:2024:1780) · Woonstichting Lieven de Key, C‑459/25 (ECLI:EU:C:2026:810) · Abanca Corporación Bancaria, C‑70/17 and C‑179/17 (ECLI:EU:C:2019:250) · Directive 93/13/EEC
Comment
The Court’s case law allows part of a contractual provision to survive only if it is genuinely separate. In Abanca Corporación Bancaria (C‑70/17 and C‑179/17) it held that an unfair term may not be maintained in part, with the elements that make it unfair removed, “where the removal of those elements would be tantamount to revising the content of that clause by altering its substance”. The Hoge Raad treated indexation and surcharge as two terms with different functions, so that striking out the surcharge leaves the indexation intact. The first two questions ask whether that is a legitimate division or a revision in disguise, and whether, even if the division is allowed, the combined effect of the two clauses can bring both down. The Court has held that the cumulative effect of a contract’s terms must be assessed (Radlinger) and that the degree of interaction between a term and other terms matters (A). The Rechtbank asks whether that assessment can take the indexation clause with it.
The third and sixth questions test the Hoge Raad’s reasons for upholding the surcharge. The Annex to the Directive lists as potentially unfair a term allowing a supplier “to increase their price without in both cases giving the consumer the corresponding right to cancel the contract if the final price is too high” (point 1(l)), and exempts “price-indexation clauses, where lawful, provided that the method by which prices vary is explicitly described” (point 2(d)). The Rechtbank asks whether a capped surcharge tied to property value is a sufficiently clear method, whether a clause that can only raise the rent is acceptable, whether a right to terminate counts when the housing market makes it illusory, and whether an indexation clause that simply refers to a percentage published each year by an independent national body describes its method “explicitly”.
The fifth question may be the hardest. Article 4(1) requires unfairness to be assessed “at the time of conclusion of the contract”, by reference to all the circumstances attending its conclusion. The Rechtbank asks whether those circumstances include the foreseeable effect of the maximum increase on the particular tenant, such as a pensioner whose income can only fall in real terms. The Court will have to say how far the assessment is of the clause, and how far of the tenant who signed it.