What Are the Rules for Residential Leases in Luxembourg?

Residential leases in Luxembourg are governed by the modified law of 21 September 2006 on residential tenancy. This law strictly regulates the relationship between landlord and tenant: contract duration, termination conditions, security deposit amount, mandatory inventory and charge allocation. Rent is capped at 5% of the revalued invested capital (Art. 3). Here are the essential rules to know before signing a lease in Luxembourg.

Lease Duration and Notice Periods

Residential leases are concluded for an indefinite duration by default (Art. 1, law of 21.09.2006). Fixed-term leases are possible but automatically convert to indefinite-term leases if the tenant remains in occupation at expiry. The tenant may terminate at any time with 3 months' notice by registered letter (Art. 12). The landlord may only terminate with 6 months' notice and exclusively for legitimate reasons: personal need for occupation (for themselves, their spouse, ascendants or descendants), serious breach by the tenant, or demolition/reconstruction works rendering the dwelling uninhabitable. The landlord's termination must state reasons in writing or be void.

Security Deposit and Inventory

The security deposit is limited to a maximum of 3 months' rent excluding charges (Art. 5, law of 21.09.2006). It must be placed in a blocked account in the tenant's name at a Luxembourg bank. Interest earned belongs to the tenant. The deposit must be returned within a reasonable time after the lease ends, minus any established damages. Entry and exit inventories are mandatory (Art. 9). They must be drawn up jointly between the parties, preferably by an independent expert. Without an entry inventory, the tenant is presumed to have received the dwelling in good condition (Art. 1731 Civil Code). The inventory protects both parties in case of disputes about the property's condition.

Recoverable Charges and Party Obligations

Recoverable charges from the tenant are exhaustively listed in the Grand Ducal Regulation of 16 June 2015. They include: common area water/electricity/gas consumption, collective heating, routine maintenance of common areas (cleaning, gardening, elevator), municipal household waste tax, and building liability insurance. The landlord cannot pass on major structural repairs (roof, facade, structure) or management/syndic fees beyond the tenant's share. The landlord must deliver the dwelling in good condition (Art. 1719 Civil Code) and carry out major repairs. The tenant must use the dwelling responsibly, pay rent on time and carry out routine tenant repairs. In case of dispute, the tenant may refer to the municipal Rent Commission before any court action.

By Erwan Bargain, REV TEGOVA · Updated: April 2026