Bill of Law – Residential Leases

A new Bill of law amending the Law of 21 September 2006 on residential leases, as amended, and amending certain provisions of the Civil Code (the “Bill”) was introduced into Parliament on 31 July 2020 (Bill of law No. 7642).

The objective of the Bill is to transpose some aspects of the government's programme to improve the situation of tenants by, among other things, facilitating access to rental housing in the private market.

The key elements of the Bill are:

• Sharing the costs of the real estate agency: the agency’s costs will be mandatorily shared equally between the landlord and the tenant;
• Limitation of the deposit: the maximum deposit is reduced from three to two months’ rent (excluding charges);
• Repayment of the deposit: If, at the end of the tenancy, the fixtures and fittings do not show any damage, the deposit must be repaid to the outgoing tenant within 2 months of handing over the keys; for properties in co-ownership, half the deposit must be repaid within 2 months of handing over the keys and the balance within 2 months of the approval of the annual charges by the general meeting of co-owners of the property;
• Creation of a joint tenancy agreement: joint tenancy agreements will be recognised as a form of residential lease and will be subject to a specific system, notably providing for joint and several liability between the joint tenants;
• To provide details of how the invested capital is calculated: the fact of furnishing a property no longer makes it possible to double the maximum amount of rent allowed, the costs of the fittings and furnishings can be taken into account under certain conditions;
• Removal of the concept of “luxury accommodation”;
• Extended lease: an extended lease agreement becomes an open-ended contract.
• Rent Commission: the possibility to apply directly to a justice of the peace in the event that the Rent Commission is unable to give a ruling.

An update of this newsflash will be circulated as soon as the Bill is adopted by Parliament.