Monaco-City: what changes the new law for the protection of the Rock

"The Rock of Monaco is the historic seat of the Monegasque Monarchy and the heart of the Principality's identity. It is with these words that Law No. 1.598, promulgated on 16 October 2026 and published in the Journal de Monaco on 23 October, opens. The text provides Monaco-Ville with its own legal regime, intended to allow the State to control the evolution of the district. Sales, use of premises, works: here is what changes, and what does not, for owners, buyers and shopkeepers.

FIVE KEY POINTS

Selling remains possible: the State must be notified before every sale and has one month to respond.
The State may buy in the place of the purchaser or offer an alternative price, but the owner may never be compelled to sell at a price other than that which he has declared or which he has not expressly accepted.
Changes of use, short-term rentals and most outdoor work are subject to authorisation.
The uses and activities regularly carried out on 23 October 2026 may continue, subject to the special short-term rental regime.
Sales initiated under a promise to sell or a binding preliminary sale agreement (compromis) bearing a legally certified date (date certaine) before that date are exempt from the right of pre-emption.

A PRECISELY DEFINED PERIMETER

The law applies to the Monaco-Ville district, including its ramparts, glacis, cliffs, gardens and the Chemin des Pêcheurs. The official plan, published by Sovereign Ordinance No. 12.204, can be consulted on the Prince’s Government website, at the Town Hall and at the Department of Forward Planning, Urban Planning and Mobility (Direction de la Prospective, de l’Urbanisme et de la Mobilité). On request, the Department will also issue, within 15 days, a certificate stating whether a property lies within the perimeter. A property located only partly on the Rock is subject to the law in its entirety.

SELLING: THE STATE’S RIGHT OF PRE-EMPTION

The transactions concerned include, in particular, sales of apartments, buildings and co-ownership lots, exchanges, contributions to a company or a trust, and transfers of shares giving the purchaser a majority stake in a company more than half of whose assets consist of property on the Rock, wherever its registered office is located, as well as transfers of businesses (fonds de commerce) and lease rights (droits au bail). For real estate, transfers between spouses, partners, ascendants, descendants and siblings, as well as divisions of jointly owned property, are excluded.

A declaration before each sale

Before the sale, the owner or the notaire (the public official responsible for drawing up property deeds in Monaco) sends the Minister of State a declaration of intention to sell (déclaration d’intention d’aliéner); for a transfer of shares in a company that has appointed an approved representative, it is that representative who files it. The declaration sets out, in particular, the identity of the prospective purchaser, the price and terms of the sale, the current use of the property and its occupancy. The State then has one month to respond. It may, on one occasion only, request documents and a viewing, which suspends this period. If it intends to acquire or to propose a different price, it seeks the opinion of the Tax Department (Direction des Services Fiscaux) on the value of the property.

The State may only exercise this right in pursuit of one of the five objectives set by the law: preserving the built heritage; maintaining residential use, particularly permanent residence; maintaining or establishing local shops or craft or cultural activities; delivering public facilities; and preserving the surroundings of the Palace, the Cathedral and the institutions. Where it decides to acquire or proposes a different price, its decision must state the reasons and set out the specific project it intends to carry out.

Three possible answers

The State renounces, either expressly or by remaining silent: the owner may sell to their purchaser, at the declared price and on the declared terms, within six months.
The State buys at the declared price and on the declared terms: as soon as its decision is notified, the State and the owner are definitively bound. The authentic deed of sale (acte authentique) must then be signed before the notaire and the price paid within three months. The owner retains the use and enjoyment of the property until payment.
The State offers another price: the owner has two months to accept that price, withdraw from the sale or maintain their own price.

For homes built before 1 September 1947, the State already had a right of pre-emption, but only at the declared price and on the declared terms (Law No. 1.235, Article 38). What is new is the State’s ability to propose a different price.

How is the new price defined?

If the owner maintains their price, the matter is referred to a conciliation and valuation committee. It is made up of an independent chair, a member appointed by the State and a member appointed by the owner, and delivers an opinion on the value of the property within two months. This opinion is not binding on anyone: if the parties agree on a price in light of it, the sale is concluded.

What happens if not?

Failing agreement, the State may refer the matter to the Court of First Instance within fifteen days; if it does not, it is deemed to have waived its right. The Court then sets the market value of the property as at the date of the declaration, having regard in particular to comparable sales on the Monegasque market, and the price may not be lower than that value. Judgment is delivered within six months, and any appeal is decided within the following six months. The sale only goes ahead if both the State and the owner accept the price set, within one month of the final decision.

The owner's guarantees

as long as the State has not decided to acquire at the declared price, the owner may withdraw his declaration;
in the event of disagreement on the price, he may withdraw his property from the sale until the end of the procedure, without compensation or penalty;
the costs of the price-fixing procedure, including the fees of its counsel, are borne by the State;
current leases remain enforceable against the State;
if the State renounces after the judicial fixing of the price, it can no longer pre-empt the same property from the same owner for two years, unless it buys it at the declared price; this period is extended to five years if the State does not sign the deed or does not pay the price within three months.

Conversely, a sale completed without a declaration, or on the basis of a knowingly inaccurate declaration, is null and void and subject to criminal penalties.

In addition, within 18 months, the State will draw up a register of designated uses (état des affectations) recording the designated use of every set of premises on the Rock. Each owner will receive the draft and will have three months to submit their observations.

YOU BUY: ANTICIPATE THE PROCEDURE

The full identity of the purchaser must be included in the declaration, including, in the case of a company, that of its beneficial owners.
Any change after the declaration requires a new declaration: change of buyer, including by substitution, assignment of the preliminary agreement or modification of the beneficial owners, price reduction or modification of the conditions.
The timetable must include the time limit for the State's response: the deed can only be signed once the State's renunciation has been justified. If the State decides to buy or offers another price, the buyer is informed.
The intended use must be checked before purchase: change of use, joining or dividing lots, short-term rental outside the main residence and most work visible from the outside is subject to authorisation.

BUSINESS OWNERS: REGULATED ACTIVITIES AND TRANSFERS

Transfers of businesses, craft businesses and lease rights are subject to the right of pre-emption, except where made to a spouse, partner, descendant or an employee who has worked in the business for more than three years. Commercial activities are divided into six classes, ranging from local shops to businesses serving passing trade. Moving from one class to another requires authorisation, processed by the Department of Economic Development (Direction du Développement Économique); if the authorities fail to respond within two months, the application is deemed refused. Bringing back into use premises that have been unused for more than two years, outside the food, craft or cultural classes, also requires authorisation.

Activities lawfully carried on as at 23 October 2026 may be continued and transferred as long as they are not modified. Any lease clause authorising a non-compliant activity is deemed void. Where the State acquires a business or lease rights through pre-emption, it must transfer them within three years to an operator whose activity complies with the classification grid; failing that, the purchaser who was displaced by the pre-emption has a right of priority. Lastly, installing or altering shopfronts, signs, awnings, lighting and terraces visible from public spaces requires authorisation.

YOU RENT OR PLAN TO CARRY OUT WORK

Short-term furnished letting of one’s principal residence remains possible without authorisation, up to 90 days a year, subject to the lease and the co-ownership regulations. Where the person letting is not the owner, the declaration must be accompanied by the owner’s written consent and proof of principal residence, and the person letting must certify on their honour that the letting breaches neither the lease, nor the co-ownership regulations, nor the laws applicable to the property. Beyond 90 days, authorisation is required; a temporary, personal and non-transferable authorisation, valid for a maximum of three years, may also be granted. In all cases, the letting must be declared to the Housing Department (Direction de l’Habitat), which issues a registration number that must appear in every listing. Lettings under way as at 23 October 2026 must be declared within six months and may only continue beyond one year if they are exempt or authorised.

Homes governed by Laws No. 1.235 or 887 may only be let to certain categories of tenant, under a six-year lease: their owners therefore cannot offer them as short-term lets.

Construction, demolition and works affecting the exterior appearance of a building (façades, roofs, joinery, ironwork, colours) or its structure, common parts, staircases and vaulted cellars require authorisation, as do interventions on gardens, terraces and trees and installations visible from public spaces or from the sea. Inside homes, only works affecting the structure, the common parts or decorative features identified in the forthcoming book of architectural specifications (cahier de prescriptions) are concerned. Demolition is only authorised for a building of no heritage interest or in danger of collapse. Applications are processed by the Department of Forward Planning, Urban Planning and Mobility.

Routine like-for-like maintenance work only requires a simple declaration: if no objection is raised within 30 days, the work may go ahead. The book of specifications will set out, building by building, the features to be preserved; pending its publication, the authorities may defer their decision by up to one year. The State covers all or part of the additional cost of any restoration work it imposes. In the event of a breach, it may halt the works and order the site to be restored to its original condition; the administrative fine can be as high as € 100,000.

SALES ALREADY COMMITTED AND TEXTS TO COME

Sales which, before the law was published in the Journal de Monaco on 23 October 2026, were the subject of a promise to sell or a compromis bearing a legally certified date are exempt from the right of pre-emption, provided they are completed between the same parties, at the same price and on the same terms. Several implementing details have yet to be specified: the official declaration form, by Ministerial Order; and the detailed classification of commercial activities, the maximum number of temporary letting authorisations and the book of architectural specifications, by Sovereign Ordinances.

This reform does not prohibit sales or rentals on the Rock: it modifies the framework and the calendar. BARNES VALERI AGENCY is at your disposal to accompany you at each stage of these new steps.