Property laws in Monaco

In Monaco, housing is divided into different sectors: the free sector, the state sector and the regulated sector, i.e. the apartments under law 887 and 1235. The apartments in the regulated sector are subject to laws that do not apply to buyers of property wishing to live there, as these laws govern the rental sphere only.

Nevertheless, these laws, when applicable, have an impact on the rental price and therefore the purchase price of an apartment and are therefore important to know before purchasing a property.

Moreover, the apartments under the law are subject to a right of buying The apartments under law in buildings built before September 1st 1947 are also subject to a right of buying of two weeks (after the right of buying period of the state) of the tenant.

The law 887

When you buy a property under law 887, you are obliged to rent it to

• Ascendants or descendants (or their spouses) of the owner (or his/her spouse);
• Persons of Monegasque nationality;
• Persons who have been domiciled in Monaco for at least five years and have been working there for more than six months;
• Persons working in Monaco for at least five years.

When renting an apartment under law 887, the owner is also obliged to grant the tenant a six-year lease, which can be terminated annually at the tenant's sole discretion. A rent indexation clause can be inserted in the lease at the owner's discretion.

Law 1291/1235

The law 1235 concerns only the houses built before September 1st 1947. The rent is regulated; it is fixed by the housing authority. The owner is obliged to rent his apartment to the following persons, in the following order of priority.

1. Persons of Monegasque nationality;
   
   
2. Persons :
   - Born to a Monegasque parent or adopted by a person of Monegasque nationality and who has lived in Monaco for at least 10 years
   - Surviving spouses of a person of Monegasque nationality who has not remarried.
   - Surviving partners of a person of Monegasque nationality who have lived in the Principality for at least 10 years and who have not concluded a new contract or married or remarried;
   - Father or mother ensuring the maintenance and education of a child of Monegasque nationality and whose domicile constitutes the child's habitual or occasional residence;
   - Father or mother who has had, for at least ten years, the effective care of a child of Monegasque nationality and who can prove at least 10 years of residence in the Principality;
   
   
3. Persons as defined as "local children*" AND whose parents or adoptive parents were born in Monaco and resided there at the time of the birth or adoption;
   
   
4. Persons as defined as a "Native Child*";
   
   
5. Persons residing in Monaco for 40 years without interruption.

* : A child of the country is any person of foreign nationality born in Monaco or adopted in Monaco during his or her minority, who has resided there since his or her birth or adoption without interruption.

However, foreign nationals whose resources exceed a ceiling set each year by sovereign ordinance are not eligible for apartments under the law.

The lease contract offers the tenant protection with a 6-year lease term, which can only be ended by the tenant during the lease or at its expiration. The tenant has three months' notice, and must pay the rent until the end of the lease.

The owner can terminate the lease contract with a notice period of at least six months if he intends to exercise his right of repossession:

• Either to occupy it himself or to have it occupied by his ascendants or descendants or their spouses by his brothers and sisters or their descendants.
  
• Or if he intends to demolish in order to rebuild, or to raise, or to modify in order to create new habitable surfaces, or to repair and improve the building, when in these last three cases the totality of the premises that the tenant occupies is rendered unusable by the execution of the work.