MONACO • RENTAL REAL ESTATE LAWS AND REGULATIONSIf you plan to purchase an apartment for rental investment or if you wish to rent an apartment for yourself; be aware that the rental real estate market in Monaco revolves around 3 axes:
- The Free Sector
- Properties under Law 887
- Properties under Law 1291/1235
THE FREE SECTOR
This concerns the vast majority of properties available for rental on the market.
The contracts and the rents are fixed freely.
The rental leases generally have a renewable term of one year but sometimes also three years.
LAW N. 887
This mainly concerns buildings constructed before September 1st, 1947.
Apartments can only be rented in favor of:
1 - ascendants or descendants, or their spouse, of the owner or his spouse
2 - people of Monegasque nationality
3 - persons domiciled in Monaco for at least five years and exercising a professional activity there for more than six months;
4 - people working in Monaco for at least five years.
The lease must be for a period of 6 years, cancellable annually according to the sole will of the tenant.
Rents are free and are not protected. A rental indexation clause according to the ICC index commonly applied in the Principality can therefore be included in the lease.
LAW N. 1291/1235
This concerns buildings constructed before September 1st, 1947.
This is the sector protected by the Monegasque State. Rents are protected - only the housing department can fix the amount of the applicable rent.
The apartments can only be rented in favor and in the order of priority indicated to the following protected persons:
1 - people of Monegasque nationality;
2 - people born of a Monegasque author; surviving spouses of Monegasque; partners of a joint life contract survivors of Monegasque; persons, fathers or mothers of a minor child of Monegasque nationality;
3 - persons born in Monaco or having been the subject of a full adoption, who reside there since their birth or their adoption, provided that one of their authors or adopters also resided in Monaco at the time of that -this ; may however be exempted from the condition of birth in Monaco persons who, while fulfilling the other conditions referred to in this figure, would have been born outside the Principality due to a fortuitous event or for medical reasons or force majeure;
4 - people who have resided in Monaco for at least forty years without interruption.
The premises subject to this law may be partially assigned to the exercise of an associative or non-commercial professional activity. The exercise of any of these activities is subject to the prior agreement of the owner and must not be prohibited by the co-ownership regulations.
The lease must be for a period of 6 years, cancellable by the tenant during the lease or when it expires, with a forecast of three months.
The lessor may, however, cancel the lease in the following formal conditions:
• Demolish its building to rebuild, on the same land, another building, with at least equal living space;
• Elevate its building;
• Make modifications to its building to create new living space;
• Make repairs or improvements to its building necessary for health, hygiene or public safety.
The rent will be established by comparison with rents applied in the same residential sector for comparable apartments and falling under the same Law no. 1291/1235, located in the same or a neighboring district, in buildings of similar quality and offering equivalent services.
The list of references used to determine the rent will be brought to the attention of the tenant before the conclusion of the lease contract.
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