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15 of August 2020

Luxembourg: Better Protection for Tenants


In view of the sharp rise in rental market prices in recent years in Luxembourg, it is necessary to better control the evolution of rents and rental charges. In the future, the tenant’s protection and information will be improved.

"Faced with soaring prices, the government will better regulate the private rental market in order to better protect tenants", Henri Kox promised at the press conference on 29 July 2020, thus updating a law that dates back to 1955.

 

Key elements of the amendments to the current law:

  • Agency fees will be shared 50/50 between the landlord and the tenant. At present, only the tenant pays these costs, whereas it is the landlord who mandates the estate agency.
  • The maximum legal amount of the rental guarantee is reduced from 3 to 2 months' rent: when the tenant leaves the accommodation, there is often disagreement between the parties as to when the guarantee will be returned. The draft law introduces precise modalities on this subject, as well as a sanction in the event of failure to comply with the deadlines provided for by law.
  • Facilitating co-tenancy and strengthening the rights of the contracting parties.
  • Clarify the methods for determining the capital invested: the lease contract will include a statement that the rent charged complies with the legal ceiling.
  • Specify the rent ceiling in the case of renting furnished accommodation, and in particular furnished rooms.
  • Abolition of the notion of luxury housing which allowed to avoid the rent ceiling.
  • Clarifications on the qualification of the lease contract in the event of a lease extension: the 2006 law is clarified in the sense that in the event of an extension of a lease contract, the extended lease becomes an open-ended lease (and not a fixed-term lease as at present).
  • Rental commissions: tenants who live in a municipality in which the relevant rental commission cannot sit due to a vacancy in one of its assessors will now be able to refer a dispute directly to the justice of the peace.

 

The text tabled in the Chamber of Deputies, Mr. Kox hopes that it will come into force "as quickly as possible". The next steps are the opinion of the Council of State and then discussions in the Chamber's committee before the text is voted on.