The three-times-rent rule holds: Council of State clarifies tenant selection

The facts

A couple applied to rent an apartment in Woluwe-Saint-Lambert. The monthly rent amounted to EUR 1,395, plus EUR 195 in fixed charges.

The prospective tenants had a combined net income of approximately EUR 4,200 per month. This income met the commonly applied standard of three times the basic rent, but not three times the total monthly housing cost, including charges.

The owners rejected the application because they required a higher level of solvency. A discrimination complaint was subsequently filed. The Brussels administration imposed an administrative fine of EUR 800 on the landlords for discrimination on the basis of wealth. The Council of State annulled that decision.

What does the Council of State say?

The Council of State first confirms that the the amount of a prospective tenant’s financial resources may constitute a relevant selection criterion.

Brussels legislation expressly allows landlords to request information on a prospective tenant’s financial resources in order to assess their ability to meet their rental obligations. According to the Council of State, the objective pursued — limiting the risk of non-payment — is legitimate.

The Council of State then examines whether the Brussels administration had sufficiently demonstrated that the application of the three-times-the-rent rule was disproportionate in this specific case.

It had not.

According to the Council of State, the administration had argued that the landlords had gone beyond what could be considered a normal mitigation of the risk of non-payment but had not sufficiently explained why this was the case. Nor did it clarify which threshold should then be considered acceptable. Without such substantiation, it cannot be established that the solvency requirement applied exceeded a reasonable relationship of proportionality.

The Council of State also notes that the legislator was aware of the practice whereby landlords ask prospective tenants to have an income of approximately three times the rent. Although this practice is not enshrined in law, it has not been prohibited or classified as discriminatory either.

What does this mean for landlords?

The judgment provides greater legal certainty than before.

What appears to be permissible?

• Assessing the solvency of prospective tenants on the basis of their financial resources.
• Taking into account the total housing cost, including charges.
• Using the three-times-the-rent rule as part of the solvency assessment.
• Comparing applications on the basis of objective financial criteria.

Where is caution still required?

The judgment does not grant unlimited freedom.

The Council of State did not hold that every application of the three-times-the-rent rule is automatically lawful. It merely found that the Brussels administration had not sufficiently substantiated why the rule would be disproportionate in the specific case at hand.

The existing anti-discrimination rules also remain fully applicable. Landlords may not take into account the nature or origin of the income. No distinction may therefore be made depending on whether the income derives from employment, a pension, unemployment benefits, disability benefits or social assistance.

It also remains advisable to assess the application file as a whole. Financial reserves, savings or other guarantees may, in certain cases, also be relevant when assessing solvency.

What does this mean for prospective tenants?

Prospective tenants who do not meet a standard income requirement would be well advised to prepare their application file as thoroughly as possible.

The judgment shows that the assessment will often be based on the information provided by the prospective tenant. A candidate who can submit other relevant elements in addition to payslips such as savings or additional guarantees, increases their chances of demonstrating solvency.

Conclusion

With this judgment, the Council of State introduces an important nuance into the debate on discrimination and tenant selection.

The three-times-the-rent rule is not enshrined in law, but it is not rejected as discriminatory in itself either. Landlords may continue to assess the solvency of prospective tenants and apply objective financial criteria. At the same time, each selection decision remains subject to a proportionality test.

For landlords, real estate investors and real estate agents, this judgment is therefore an important confirmation that a carefully substantiated solvency check can be fully compatible with the Brussels anti-discrimination rules.

Questions about tenant selection, discrimination risks or rental disputes?

Andersen’s Real Estate team assists landlords, real estate investors and real estate professionals in developing compliant selection procedures and represents them in administrative and judicial proceedings.