Lease reviews
What's new for landlords and tenants?For contracts signed from August 1st, tenants' charges at the beginning of the lease will be reduced, and estate agency fees will be shared between tenant and landlord. In addition, shared accommodation is finally regulated. Here's a summary of the new measures:
Agency fees: towards fair sharing
Real estate agency fees for new leases must be shared equally between the lessor and the tenant, i.e. both the tenant and the landlord pay half the agency fees. Any clause to the contrary will be considered null and void.
Restrictions on rental deposits
The maximum amount of the rental guarantee has been reduced from 3 to 2 months' rent. The law now regulates the return of the rental guarantee at the end of the lease, with deadlines and penalties for late return.
In the event of an unjustified late return, the lessor will have to pay an indemnity of 10% of the monthly rent for each month's delay.
Shared accommodation: a clearer legal framework
Luxembourg has set up a compulsory system for shared tenancies, requiring the tenants and lessor to sign a single lease agreement and a shared tenancy agreement formalising communal living. Tenants are jointly and severally liable for the obligations under the lease. A distinction is made between shared and coliving accommodation. In shared accommodation, a single contract binds all the flatmates to the lessor. In coliving, each tenant signs an individual lease with the landlord, with no joint and several liability between tenants.
Lease contracts: the written form is required
All lease contracts must be drawn up in writing, otherwise they are null and void. Additional services offered by the landlord, such as cleaning the private areas or supplying hygiene or cleaning products, must be detailed and separated in the contract. Contracts concluded before August 1st remain valid without modification.
Legal limits on rent increases
Rent increases in Luxembourg must comply with two legal limits:
1. Legal rent limit:
- Unfurnished dwellings: The annual rent may not exceed 5% of the capital invested by the lessor.
- Furnished dwellings: A supplement for furniture may be charged, not exceeding 1.5% of the total cost of furniture for which invoices are less than 10 years old. Fitted kitchen units are included in the capital invested and not in the furniture supplement.
2. Limit on increase: At the time of each adjustment, the rent may not be increased by more than 10% over the current rent.
End of the "Luxury Housing" Concept
The classification of housing as "luxury housing" to justify higher rents has been abolished. Lease agreements predating this change, qualifying the property in this manner, must now comply with the new rent-setting regulations.
Extended Lease Contracts: Towards an Indefinite Duration
Fixed-term lease contracts that are not terminated before their expiration will be automatically converted into indefinite-term contracts. This allows for termination at any time by the tenant or the lessor, with a legal notice period of three or six months, depending on the situation.Fixed-term lease contracts that are not terminated before their expiration will be automatically converted into indefinite-term contracts. This allows for termination at any time by the tenant or the lessor, with a legal notice period of three or six months, depending on the situation.
These measures aim to provide more transparency and protection for tenants.
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