Monaco Rental Laws: Pro-landlord, Neutral or Pro-tenant?

Monaco's landlord and tenant laws are judged by the Global Property Guide to be Pro-Tenant between landlord and tenant. The housing law is generally pro-tenant, especially in regulated and public housing sectors, though it maintains pro-landlord flexibility in the free-market segment. The legal balance shifts depending on the type of property, the status of the tenant, and the applicable rental regime.

Rents: Can landlord and tenant freely agree rents in Monaco?

Landlords and tenants can generally agree freely on rents, but there are important exceptions depending on the type of property and the legal status of the landlord and tenant.

Liberal Regime

• Applies to: New buildings or recently renovated properties, and leases between private individuals or companies not subject to rent control laws.

• Conditions:

  • The parties are free to set the rent at market rates.

  • Lease duration and renewal terms are also negotiable.

Controlled or Regulated Regime

• Applies to certain properties and tenants under Monaco's special housing laws, especially:

  1. Law No. 887 (from 1970, as amended) — Applies to older buildings.

     • Rent is regulated.

     • Tenants have protected status (Monégasque nationals, long-time residents, etc.).

  2. Law No. 1235 (from 2000) — Public sector housing or subsidized housing.

     • These leases follow strict rent ceilings.

Deposits

In Monaco, there is no legal limit on the amount of security deposit a landlord can request for residential leases under the liberal rental regime. This means that landlords and tenants are generally free to negotiate the deposit amount, which typically ranges from one to three months' rent. For high-end properties, short-term rentals, or when the tenant is a non-resident, the deposit may be higher, depending on the agreement between the parties.

However, the situation changes when the lease falls under a controlled regime, such as those governed by Law No. 887 of 1970. While this law does not always specify an exact cap on the deposit, it includes protections for tenants. In such cases, if the deposit is deemed excessive or disproportionate, a tenant may challenge it, and the courts can intervene to determine whether it is fair.

In the case of public or subsidized housing governed by Law No. 1.235 of 2000, the rules are more restrictive. Deposits in this category are typically regulated by public authorities and are often limited to one month’s rent or a symbolic amount.

What rights do landlords and tenants have in Monaco, especially as to duration of contract, and eviction?

Liberal Rental Regime (Free Market Leases)

Under this regime, which applies to many modern, high-end, or privately owned properties, landlords and tenants have a high degree of freedom to define the terms of the lease.

• Contract Duration: The lease term is freely agreed upon by the parties. It is commonly one year (renewable) or longer. There is no mandatory minimum or maximum.

• Renewal: Leases often include automatic renewal clauses. If not, the tenant may request renewal, but the landlord is not obligated to agree.

• Termination by Landlord: The landlord can terminate the lease at the end of its term, provided written notice is given, typically three months in advance (though this can be negotiated).

• Eviction: A tenant can be evicted for failure to pay rent, serious breach of contract, or if the landlord wants to reclaim the property for personal use or major renovations. Eviction must follow proper legal procedure and may require a court order.

• Termination by Tenant: The tenant can usually terminate the lease before the end of the term with a notice period (usually three months), unless the lease specifies otherwise.

Controlled Rental Regime (e.g., Law No. 887 of 1970)

This regime protects certain categories of tenants—especially Monégasque nationals, long-time residents, and elderly or low-income persons—and typically applies to older buildings.

• Contract Duration: The lease duration is typically longer (often six years) and is subject to statutory rules.

• Renewal: Tenants generally have automatic renewal rights unless specific exceptions apply (e.g., the landlord needs the property for personal occupation).

• Termination by Landlord: Very limited. The landlord may only refuse renewal under strict conditions—such as occupying the property themselves or doing major work—and must give advance notice, usually at least six months.

• Eviction: Difficult and slow. The landlord must have a legally valid reason, and the tenant has strong protection. Legal proceedings can take months or years, and evictions are enforced only with a court ruling.

• Termination by Tenant: The tenant may leave earlier with proper notice, usually three months, but should check the lease for specific clauses.

How effective is the Monaco's legal system?

Monaco’s legal system effectively enforces eviction orders, but due process is slow, especially in tenant-favored regimes. Landlords must build a solid legal case, follow procedure, and expect delays. The system balances property rights with strong tenant protections, particularly for vulnerable residents.

Legislation

Landlord and tenant relations in Monaco are governed by a combination of general civil law and specific housing legislation, depending on the type of lease and the status of the property and parties involved. The main laws to take into consideration are: Law No. 887 of 25 June 1970 (as amended), Law No. 1235 of 28 December 2000, Law No. 1291 of 21 December 2004, and the Civil Code.

Brief History: Recent changes in Monaco landlord and tenant law

The Principality of Monaco is an independent sovereign state that legislates directly in respect of all matters. Landlord and Tenant Law in Monaco must not be confused with, say, the law of neighbouring France, and important differences exist.

In the residential/non-commercial market, a number of specific properties have been brought within a protected market, subject to specific laws which tend to give protections to tenants provided they meet certain criteria such as nationality, the amount of time they have resided or worked in the Principality.

But the vast bulk of property available for acquisition in Monaco, and there are no restrictions on who or what can acquire Monaco real estate, is not subject to any protective laws, such that general law applies.

As a general comment, given the size of the Principality (approximately 2 square kilometres) and the general desirability of tenants to occupy property in an extremely safe and pleasant environment, the laws of supply and demand are such that agreements struck between landlords and tenants tend to be weighted heavily in the landlord's favour in the free market.