In the Principality of Monaco, Act no. 1.235 relating to rental conditions for certain residential premises which were built or completed before September 1st, 1947 allows Monegasque citizens, as well as the “Enfants du Pays”, to find accommodation whose rents, defined and supervised by the State, are clearly lower than the liberalised sector regarding older properties.

As a result, landlords in the rent-controlled sector are unable to take advantage of their properties’ fair rental value and receive income that matches to their real value, making these tenants assume a social role that they should not; this role being attributed to the State, the main provider of these so-called "under-law" properties.

This infringement of property rights, which has been debated for many years, will soon be financially compensated. Indeed, the bill no. 1015, creating a compensatory rent allowance for premises governed by Act no.1.235, was recently unanimously approved by the National Councillors.

The provisions of the law, which will come into force on January 1st, 2022, will allow persons qualified as "small landlords", who:

• on the one hand, are owners in their own name or through a company or usufructuaries of the said premises and,
• on the other hand, acquired their premises prior to December 25th, 2004*, or received them subsequently by way of inheritance or donation, provided that the inherited or donated property was acquired before December 25th, 2004,

to receive this allowance provided that they own less than 500 sqm of residential premises in the Principality, all sectors combined, and up to a maximum surface area of 300 sqm part of the rent-controlled sector.

The allocated sum will be the difference between the average rent a landlord receives in the rent-controlled sector and the average rent he or she would have received if the property, part of the older real estate portfolio, had been free of law. With the combination of the rent and the allowance, this landlord will receive a sum equivalent to the rent for a dwelling with equivalent characteristics.

In return for the payment of this allowance, the owner will have to rent out this property, as well as all his or her other properties under law. In addition, each property will have to meet safety and comfort standards, be in good condition and well maintained, which may require investment in renovations.

This bill is a strong act towards "small landlords" who will finally be able to take advantage of a fairer income and should put an end to the lively debates that have been going on for decades.

Because the rental market in the rent-controlled sector is specific and highly regulated, Valeri Agency puts its experience and knowledge at your service to help you manage your property "under law" if you own it.

Do not hesitate to contact us!

*The date of December 25th, 2004 corresponds to the promulgation of Act no. 1.291 and the stabilisation of the system regulating the rent-controlled sector, so that acquisitions made since then have been made in full knowledge of the facts, justifying the exclusion of the owners concerned from the benefit of the measure.