The reform of lease law has taken a new turn with the recent approval of amendments by the government. In the pipeline since 2020, the bill is poised for progress following a series of modifications endorsed by the Government Council on Monday, 15 April. Notably, the decision was made to eliminate the contentious provision concerning a rent cap, one of the most controversial measures in the bill.
On Tuesday, the Ministry of Housing elaborated on the approved measures. These include a precise definition of flat-sharing communities in Luxembourg along with associated obligations.
Furthermore, the government has approved the requirement for a written lease agreement, stipulating specific details to be included, such as adherence to the legal annual rent ceiling.
Notably, the retention of certain aspects of the existing law ensures that “the sum of rents paid by tenants within a tenancy, flat-sharing community, or multi-lease tenancy must not surpass the maximum annual rent, determined by the rule of 5% of the property’s invested capital.” Landlords retain the option to request additional fees for furnished properties, with an annual increase limit of 10%. However, the government has committed to revisiting this rent ceiling with a forthcoming reform proposal.
Additionally, the concept of “luxury accommodation” is to be abolished in Luxembourg, thus averting the circumvention of rent ceiling regulations.
Finally, tenants stand to benefit from the requirement for equitable sharing of estate agency fees with landlords. The maximum amount for rental guarantees has been reduced from three to two months’ rent. It should also be noted that the bill introduces a structured process for rental guarantee refunds, encompassing specific terms and conditions, including penalties for non-compliance with legal timelines when tenants vacate a property.
