Rental Lease Reform Challenged!

Bill No. 7642, which amends the law on rental leases, is receiving a lot of criticism. The Union des propriétaires du Luxembourg (ULPI) is not pleased either.

ULPI President Georges Krieger believes that the bill was poorly prepared and failed to listen to landlords and real estate professionals. He is particularly opposed to limiting the rent to 3.5% of the invested capital (instead of the current 5%), as this would discourage investors.

The reform also penalizes owners of older properties. The calculation method for the invested capital poses a problem, especially for older properties, which account for over 60% of the real estate stock in Luxembourg. Under the reform, there will be a depreciation of 1% per year, except for the first year, which could create absurd situations for very old dwellings.

The bill also demands greater transparency from landlords, who will have to prove their investments and, if necessary, call upon an expert. Krieger finds this procedure cumbersome and difficult to comply with, and fears an increase in conflicts before the Commission des loyers and between tenants and landlords.

The president of the ULPI believes that the bill must be revised.