The new Luxembourg law regulates shared housing, defined as the rental of a dwelling by multiple tenants through a shared housing agreement. It imposes joint liability among tenants for rental obligations, particularly rent payments. Some questions remain unanswered, such as how to handle the departure of a tenant and the possibility of applying these rules on an optional basis.

In the latest edition of our book “The Lease Contract in Luxembourg Law”, we raised the issues related to the lack of legislation on “shared accommodation” in Luxembourg, particularly concerning joint liability between tenants, the termination of the lease by one tenant, and the payment of rent.

We can only welcome the legislator’s intention to provide a legal framework for this type of rental.

A Definition of Shared Accommodation

The concept of “shared accommodation” is now defined by law: it consists of the rental of the same accommodation by several tenants who, with the express agreement of the landlord, opt for the application of the specific rules of shared accommodation by signing a co-tenancy agreement before or at the time of signing the lease contract. This agreement details the practical aspects of communal living and must contain a series of information, such as the distribution of rent and charges.

An intermediate inventory is mandatory upon the early departure of a tenant to determine the responsibilities of each concerning repairs.

Joint Liability of Co-tenants

The law imposes joint liability on co-tenants for the obligations of the lease. This means that each tenant can be held responsible for all the rental obligations, including the payment of rent, if another tenant defaults.

The tenant who fulfills these obligations can, however, seek recourse against the defaulting tenant.

Before the introduction of the law, the parties could already validly opt contractually for a joint liability clause. Today, joint liability is established by law but under the condition that the relationship between the parties is effectively classified as “shared accommodation” (see below “Criticism”).

End of Lease and Replacement of a Co-tenant

If all co-tenants decide to end the lease, a three-month notice period is required, signed by each tenant and notified to the landlord by registered letter.

In the case of individual departure, the departing tenant must notify the landlord and the other co-tenants three months in advance and try to find a replacement. Failing that, they must demonstrate that they have made an active and sufficient search. If half of the tenants leave within a three-month interval, the landlord can terminate the lease for all tenants with a three-month notice.

The departing tenant is released from their obligations on the date of signing the amendment to the lease contract at the end of the three-month notice period, subject to active and sufficient search, or at the latest three months after the expiration of the notice. The initial security deposit also ends at this point.

Criticism

The main question that immediately arises is whether the new rules are optional or mandatory. Indeed, upon reading the new law, one might think that the rules on “shared accommodation” only apply if certain formalities are respected, as the concepts of “shared accommodation” and “co-tenants” depend notably on the signing of a co-tenancy agreement and a single lease contract with all the tenants

If these formalities are not respected, do the new rules simply not apply? Could the parties then choose whether or not to apply the new rules? If the parties wish to include them, they must comply with certain formalities. Otherwise, it would suffice not to comply with them.

The wording of the law, which specifies that the concept of “shared accommodation” applies if the parties “opt” for the application of the specific rules, supports this thesis.

This issue will likely need to be clarified by the courts.

The law is also silent on the fate of the portion of the rent attributable to the departing tenant if they are released from their obligations, but no replacement has been found in time.

Does the landlord have to bear this rent loss, or do the remaining tenants cover the remaining amount? Given the legal joint liability provided by the new text, one could argue that the risk lies with the remaining tenants, although this may not align with the intent of the law.

These are not the only questions that arise, and practice will undoubtedly provide us with important answers.