Landlord Law in Monaco: Rights and Obligations of Property Owners

Letting a property in Monaco follows rules you will not find elsewhere. The market is divided into two sectors, free and protected, and they determine the length of the lease, the freedom to set the rent and the conditions for recovering the property. Here is what an owner should know before letting.

Two sectors: free and protected

In the free sector, landlord and tenant negotiate the terms of the lease freely. In practice the term ranges from one to three years and the rent is set by the owner.

The protected sector falls under two laws: law no. 887 of 1970 and law no. 1.235 of 28 December 2000, amended by law no. 1.291. They mainly concern older housing, with law 1.235 covering certain premises built or completed before 1 September 1947. Leases there run for six years, renew by right, rents are controlled and grounds for recovery are limited. Which regime applies depends on the building and the date of the lease: have it checked by a notary or lawyer before letting or buying.

Your rights in the free sector

You set the length of the lease, the rent and its revision clause, generally annual. You can ask for a security deposit, most often three months' rent including charges: it is not mandatory and it is not an advance on rent. At the end of the lease, you generally have two months to return it, less justified deductions.

At expiry, you can end the lease without giving a reason, respecting the notice period set in the contract, often three months. With notice, you can also access the property for an inspection, a sale or a re-letting, and the contract may provide for penalties if the tenant refuses.

Your rights and their limits in the protected sector

The owner can recover the property only in specific cases, notably to live in it or to house a relative (ascendants, descendants, spouse, siblings or their descendants), with at least six months' notice before the end of the lease. In some cases, the owner must offer the tenant replacement housing in Monaco, in comparable condition and at a rent no higher than the previous one.

To increase the rent at renewal, the landlord must notify the proposal in writing at least six months before expiry. If the tenant refuses, the landlord can refer the matter to the housing rent arbitration commission within three months. A declaration of vacancy of the property is also mandatory: within one month under law 1.235, within eight days under law 887.

On the sale of a property within the scope of law 1.235, a pre-emption right applies first to the State, then to the tenant. The buyer takes over the lease with the sitting tenant's rights: a purchase does not end a protected tenancy.

Your obligations as a landlord

The lease must be in writing and registered with the tax authority, for a duty of 1% of the annual rent including charges. You must hand over the property in good condition, carry out the repairs that fall to you and return the security deposit on time. Rent revision also follows rules: during the lease it takes place only once a year and only if an indexation clause provides for it. An arbitrary increase is not possible.

Entrusting the letting to an agency

An agency screens applications, drafts the lease and organises the inventory. Its letting fees follow the scale of the Chambre Immobilière Monégasque: ask for the exact amount and how it is split before signing a mandate.

How we help

We help owners put their property on the rental market: choice of regime, tenant selection, drafting of the lease with a notary or lawyer. Considering letting your property in Monaco? Let's talk in confidence about your project.

This article presents general principles and does not constitute legal advice. The applicable regime depends on the property and the lease.