The 10% penalty in a Dutch purchase agreement: what a new ruling means

Almost every home purchase in the Netherlands is made under a standard purchase agreement, the koopakte. One clause in it says that a party who fails to complete owes the other side a penalty of ten percent of the purchase price. At Amsterdam prices that is a large sum. On 29 September 2026 the Arnhem-Leeuwarden Court of Appeal ruled that this penalty can be too high in today's market, and reduced it in one case from €38,000 to €10,000.

If you are buying in Amsterdam from abroad or as a newcomer, read this clause before you sign.

How the penalty clause works

Most agreements for existing homes are based on a model contract. If one party fails to meet an obligation, the other side first sends a formal notice of default, which gives eight days to put things right. If that does not happen, the agreement can be dissolved in writing and the defaulting party owes ten percent of the price. No court is needed for that.

Buyers usually secure that amount up front. The agreement usually requires a bank guarantee or a cash deposit of ten percent, held by the civil-law notary who handles the transfer. If the sale falls through, the notary can pay the penalty to the seller out of that guarantee.

The Amsterdam Association of Estate Agents (MVA) reported a median sale price of €583,839 for the municipality of Amsterdam in the third quarter of 2026. Ten percent of that is roughly €58,000. Our overview of the Amsterdam market in Q3 2026 has more on those figures.

The case behind the ruling

In 2023 two young sisters bought a home for €380,000. The case was not an Amsterdam one; it started at the district court of Midden-Nederland. They planned to pay part of the price with a gift from their parents, taken from the equity in the parents' own house. That money was held by a notary and could only be released after a separate court procedure. Completion on 16 June 2023 failed as a result. The seller served notice, dissolved the sale and collected €38,000 through the bank guarantee.

The court held the sisters responsible. The notary had explained before they signed what was needed to release the money, and their inexperience, and the advice they followed from their financial adviser, were their own risk.

Why the court still cut the penalty

Shortly afterwards the seller sold the home to someone else for €398,555. After deducting his losses of just over €11,000, he came out about €7,000 ahead. He had, however, bought another home himself, with a €47,300 penalty if he failed to complete, and only managed thanks to a bridging loan and a seller who agreed to a later date.

The court found a €38,000 penalty excessive for two private buyers. It also made a broader point. The ten percent rate dates from a time when homes cost roughly half of what they cost now and took longer to resell. The court sees a shift in what people regard as a reasonable penalty, while noting that ten percent may fit again if the market turns.

The court did not scrap the penalty, because it also exists to make people keep their word. It set the amount at €10,000 and ordered the seller to repay €28,000 plus statutory interest.

What the ruling does not change

Under Dutch law a court may reduce a contractual penalty only if fairness clearly demands it (Article 6:94 of the Dutch Civil Code, in Dutch). That is a strict test, and the seller can never receive less than the damages the law would award anyway. This is also a single judgment by a single appeal court. The model contract has not changed, so the clause still says ten percent. Getting it reduced afterwards means going to court, with an uncertain result. In this case each side paid its own legal costs.

What buyers in Amsterdam can take from it

According to the MVA, 77 percent of Amsterdam homes sold above the asking price in the third quarter. A higher price also means a higher penalty if things go wrong. A few habits make a default much less likely:

• Make sure your full financing can be in place before you sign. That includes your own funds, such as a gift or the proceeds of another property. If that money depends on a notary or a sale abroad, find out exactly when it will be available.
• Know which conditions in the agreement let you withdraw without a penalty, such as a financing condition, and the deadline for each. Bidding without conditions can win you the house, but the risk then sits with you.
• Use the three-day cooling-off period that starts when you receive the signed agreement (Article 7:2 of the Dutch Civil Code, in Dutch) to read it properly, with a translation if you need one.
• If completion looks uncertain, tell the seller early. The transfer date can only move if both sides agree.

A buying agent can go through the conditions of your offer and the agreement with you. For legal questions about a specific contract, speak to the notary or a lawyer.

A note for sellers

Sellers should not count on the penalty as money in the bank. If you resell at a higher price after a sale falls through, a court may take that into account, as this case shows. Sellers who are buying another home at the same time carry their own risk if their buyer pulls out, so it pays to line up both transfer dates and leave some slack. When we handle a sale, the dates and conditions in the agreement are part of that conversation.

Sources: Arnhem-Leeuwarden Court of Appeal, judgment of 29 September 2026, ECLI:NL:GHARL:2026:6289 (in Dutch); Dutch Civil Code, Articles 6:94 and 7:2; Amsterdam Association of Estate Agents, Q3 2026 figures (in Dutch).