RENTAL CHARGES : WHAT DO THEY INCLUDE ?

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Rental charges are an essential part of any rental agreement. The current rental legislation, the “Bail à loyer” issued in 2006, lists them out and stipulates, for each of them, whether it is up to the landlord or to the tenant to pay for them.

 

1) Consumption charges: borne by the tenant

Electricity, gas, heating, water,

Are excluded: the costs of reading the consumed units, which are borne by the landlord.

 

2) Costs related to the maintenance of the rented property and of the communal space (when the rental property is in a residence) : borne by the tenant

- The tenant must take care of all maintenance jobs; they rank from the general cleaning and upkeep of the inside and of the outside (for instance cutting the lawn and trimming the edges) to annual tasks such as the revision of the boiler and the changing of the ventilation filters.

- Are also included the maintenance of the fireplace, the letterbox and the lift inside the residence (if the tenant does not live on the ground floor).

 

3) Costs for small repairs: borne by the tenant unless fault/damage is due to wear and tear (see section 6)

Caused to the floors, walls, windows, doors, fireplace, kitchen appliances, …

 

4) Local taxes : borne by tenant

 

5) Management fees : borne by landlord

Unless some of them relate specifically to a task commissioned by the tenant

 

6) Replacement due to wear and tear, dilapidation and force majeure : borne by landlord

Replacement of wallpaper:

Careful here! Marks on walls are not treated as wear and tear, they fall in the category 2 above.

Are also included in this section the maintenance and replacement of the floor coverings, the roof, gutters, pavement outside the property.

 

Comments:

 

All costs usually endorsed by the landlord can be charged to the tenant instead if the latter clearly is the person responsible for the damage. The reversed situation is also applicable.

 

A rental contract, duly agreed and signed by both parties, may overrule some of the above mentioned information however in absence of such mentions, all parties must refer to the legislation.

 

In a residence, the management company is the recipient for most invoices. At the end of each calendar year, it allocates the total costs to each landlord (based on the surface owned) and the landlord in turn passes on the relevant costs to the tenant. This may happen some time after a tenant has left and it justifies why the landlord has up to 6 months to release the tenant’s bank warranty.

 

In light of the above and in order to facilitate the process, the landlord may elect to invoice the tenant for a fixed monthly amount; these advances must be adjusted with the actual costs at some stage during the following year. So-called actual costs must also be justified.

 

It is advisable to go through the description of each charge with a fine comb ahead of the signature of the rental contract; many tenants are expatriate and one often does not realise that rental conditions can differ greatly from one country to the other.

The rental contract templates available via the internet are generic and unspecific; the estate agent is there to draft a rental contract that relates specifically to a given property with a listing of all the relevant charges and the details of who is responsible for what. Also do not hesitate to ask ahead of the contract signature how the maintenance should be dealt with: some landlords do not want the tenants to paint the walls themselves but insists on professionals to do the job.

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CASCO : WHAT IS IT ?

 

The term “casco” designates a building for which only the external and bearing structure have been completed; the internal fit-out has not been addressed yet.

At the time of building the seller does not know what the space will be used for: a restaurant, a fitness centre, a hairdresser or a furniture store? Each business will require specific fittings with specific technical installations. In order not to narrow the target market the seller chooses then to present the space unfinished.

This allows the new owner / tenant to complete the interior as needed.

When visiting, do not be put off by the possible darkness and the small size of the space. Once the concrete disappears and the white surfaces such as plaster, appear, the space seems to gain in volume and brightness.

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THE RENTAL WARRANTY

 

A refundable warranty worth a maximum of 3-month rent is requested on the day of entering the property. This warranty is either paid into the landlord’s bank account or it is held as a bank warranty (it stays in the tenant’s bank account but only the landlord can have access to it and so until he/she releases it back). The landlord can only use the warranty to cover the costs of damages incurred by the tenant; under no circumstances does it replace the payment of rent.

Attention: the setting up of a bank warranty generates bank fees.

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THE TERMINATION OF THE RENTAL CONTRACT 

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It is essential to clearly lay out the terms of the termination and those of its renewal. By law the termination of a contract calls for a minimum notice of 3 months. Some contracts stipulate an automatic renewal but make sure you agree with the implied extended rental period.

All expatriate tenants insist on the insertion of a “Clause Diplomatique” as it allows them to break a contract before its determined end. However this only applies when the tenant is sent back to his/her country of origin by his/her employer. The 3-month termination notice must still be given and paid for.

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THE OVERLAPPING OF RENTAL CONTRACTS

 

This is totally forbidden. On one hand, two distinct tenants cannot physically share the same rental property and the landlord cannot receive two rental incomes from the same property for the same period.

Be sure that your rental contract stipulates that the property is free at the time of entering and that the previous rental contract has been terminated.

When a tenant wishes to extend the duration of the rental period, this can only be done if a new rental contract covering the same period as that of the extension, has not been signed yet.

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WHEN THE TENANT WANTS TO EXIT THE RENTAL CONTRACT 

 

If a contract is due to end on a specific date, the tenant is simply obliged to complete his/her duties until that date.

However if the contract is tacitly renewable and if the tenant does not want to stay on, a notification must be sent to the landlord ahead of the 3 months’ notice.

In the instance when the rental agreement is tacitly renewed year on year, the tenant is expected to comply his/her duties until the end of the current contract year regardless of the given notice.

Some landlords are more flexible and will accept an earlier exit provided that the tenant or the appointed estate agent is able to find a new tenant to take over the rental property. This does not mean that the new tenant will “finish off” the existing contract, usually a new one is drafted.

The so-called “clause diplomatique” is often included in the contract. It allows the tenant to leave the property earlier than the set date on the one condition that he/she is relocated to another branch of the company, outside of Luxembourg. It does not apply when changing employer or when being let go. The 3-month-notice rule still applies and if the tenant leaves before the notice is up, payments and obligations must still be met until the end of it.

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WHEN A LANDLORD WANTS TO EXIT THE RENTAL CONTRACT 

 

This instance is strictly regulated so as to avoid any abuse; when the rental contract has an indefinite duration, the landlord can request the exit if only one of the 3 following reasons can be brought forward and justified:

The landlord or one of his/her closed relative wants to move in the rental property; he/she will need to elect it as his/her new domicile.

The landlord wants to refurbish the property to such extend that it would be impossible for the tenant to stay in.

The current tenant does not comply with the obligations stipulated by the terms of the lease.

The landlord must then give 6 month notice.

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FIXED RENTAL CHARGES OR ACTUALISED CHARGES ? 

 

Co-rentals do not fall under the general rental legislation of 2006 so quite often the charges are fixed for ease of management. It is up to the landlord to evaluate as accurately as possible what the charges will be. Tenants must be careful that they are not charged outrageous expenses but as it is something they find out before signing a contract, they always have the possibility to say no. The contract must therefore specify that the charges are fixed and not adjustable as a later stage.

Ordinary rentals, however, come with monthly fixed charges which then must be adjusted in relation to the actual costs. Again for ease of management, it is best to ask for a monthly fixed amount. When actual charges are billed to the landlord, he/she has a duty to adjust, ask for an extra payment or reimburse some monies depending on the final balance. The tenant has the right to request copies of actual costs to ensure the billing is correct.

There is one problem though. Bank warranty must be returned to the tenants no later than 6 months if the rental is an apartment (3 months in the case of a house). When the rental is an apartment, it is the management company which receives the invoices and which in turn invoices each landlord. Then the landlord can calculate what is the final balance owed by the tenant. This process is lengthy and the final costs often are known more than 6 months after the tenant has left the property. This explains why landlord are reluctant to release in full the warranty before the due date.

Obviously it is best to remain in good terms with the landlord, especially if a refund is expected. I have come across cases where former tenants were reimbursed by their landlords for over-paid charges a year after their departures. It is best to agree on an arrangement such as returning part of the warranty until actual costs are known

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THE MUST HAVE CLAUSES IN A RESIDENTIAL CONTRACT

 

When negotiating your “contrat de bail”, you will find obvious to discuss some clauses such as the rental price. Some other clauses do not seem so critical yet it is essential that you check them all so as to understand thoroughly the contract you are entering into.

 

Personal details of both parties:

Communication is key so make sure to mention full current addresses, telephone numbers and email addresses.If a married couple is renting, both names (and details) should be listed so if one partner dies, the other can stay legitimately as long as the terms of the contract are respected. Co-tenants are co-responsible for complying with all the terms of the contract.

 

The property:

It is important to specify its boundaries and all that is included in it whether it is a parking space, a cellar in a residence, …

The estate agent will have checked the proprietary rights of the landlord prior to signature.

 

The price:

The current legislation stipulates that the rent can only be adjusted once every 2 years so there is no need to add anything.

 

The warranty:

A refundable warranty worth a maximum of 3-month rent is requested on the day of entering the property. This warranty is either paid into the landlord’s bank account or it is held as a bank warranty (it stays in the tenant’s bank account but only the landlord can have access to it and so until he/she releases it back). The landlord can only use the warranty to cover the costs of damages incurred by the tenant; under no circumstances does it replace the payment of rent.

 

The duration of the contract:

It can be unlimited but usually it is limited to a specific duration. Traditionally the banking contracts ran for 3 years so some landlords still impose such a long rental period. However nowadays a period of 1 or 2 years is more commonly requested.

 

Termination of contract:

It is essential to clearly lay out the terms of the termination and those of its renewal. By law the termination of a contract calls for a minimum notice of 3 months. Some contracts stipulate an automatic renewal but make sure you agree with the implied extended rental period. All expatriate tenants insist on the insertion of a “Clause Diplomatique” as it allows them to break a contract before its determined end. However this only applies when the tenant is sent back to his/her country of origin by his/her employer. The 3-month termination notice must still be given and paid for.

 

The maintenance of the property:

Broadly speaking the tenant is responsible for the general day to day upkeep of the property during the occupancy period and the landlord is responsible at all times for maintaining the structure of the building.

It is advisable to list out who is responsible for maintaining specific items so there are no argument down the road (e.g. who maintains the boiler, who cuts the edges in the garden, should the tenant repaint the property before exiting it?).

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WHAT DOCUMENT TO PROVIDE WHEN LETTING A PROPERTY ?

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Name & first name

Date & Place of birth

Certified copy of I.D. or passport

Physical address

Email address

Mobile number

Social security number

Profession

Physical Identification Form

Description of the property

Cadastral extract

Layout plans

Energy Pass

Minutes of General Assemblies (if applicable)

Details of charges

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SUGGESTED LIST OF FURNISHINGS WHEN RENTING A FURNISHED PROPERTY

 

In each bedroom

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1 140cm wide bed, if you need to buy a new one, select a bed with an easy to maintain headboard, well affixed onto the base (the 2 vertical bar system is quite fragile)

1 bed base

1 bed mattress

2 bedside tables

2 bedside lamps

1 desk

1 desk chair

1 desk lamp

1 tall mirror if none on the wardrobe doors

1 wardrobe

1 chest of drawers if the wardrobe has not shelves

1 cloth hook to hang clothes at the back of the bedroom door

Bedding : mattress protector

Bedding : a mattress sheet

Bedding : a duvet for all seasons

Bedding : a duvet cover

Bedding : 1 or 2 pillows

Bedding : 1 or 2 pillow protectors

Bedding : 1 or 2 pillow covers, usually included in the same package as the duvet cover

1 ceiling pendant, do not forget the bulbs

1 bin / trash can

Window blinds

Some items of decoration, such as a rug, a blanket, something to hang on the walls

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In the bathroom

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1 bin / trash can

1 shower mat

A few towels to give a more welcoming look on the pictures !

 

In the kitchen

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Sink

Hob & hood

Oven

Dishwasher

Washing machine – in apartment or in communal laundry

6 large plates, 6 dessert plates, 6 soup plates

6 knives, 6 forks, 6 soup spoons, 6 coffee spoons

6 wine glasses, 6 water glasses

Serving cutlery

1 water jug

4 place mats

2 oven dishes

A set of pans

1 salad bowl

1 kettle

6 mugs

1 coffee maker / press

2 cutting boards

1 peeling knife

1 cutting knife

Dish mats, made with cork

1 draining board

A few kitchen towels

1 bin (if not integrated underneath the sink)

1 cloth horse (for the balcony)

A cleaning kit

1 hoover, if you wish, otherwise 1 standard broom and 1 mop

1 small shovel & brush

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In the living / commual room

Chairs / sofas / ottomans 

1 table & 4 chairs (2 standard ones & 2 foldable ones)

1 coffee table

Warm up the room with a few pictures or photos on the walls, plaids or/and cushions

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Smoke alarms

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THE RENTAL LEGISLATION

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Use the link below to access the legislation currently applicable in Luxembourg

https://logement.public.lu/dam-assets/documents/publications/bail/bail-loyer.pdf

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TO RENT FURNISHED OR UNFURNISHED

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Traditionally, rental properties have been presented unfurnished, without light fitting, if not a ceiling flushed lamp here and there, and without dressings on the windows. Nowadays, the curtains are still not hung up but at least the light fittings are more often installed ahead of the rental.

 

The question of "furnished or unfurnished" arises because the demand for furnished properties is exploding:

- Among the expatriates, many are those who are single, who recently started their working life and who arrive with only their suitcases.

- When the furniture bought for his/her residence in his/her home country is not expensive, it is not worth the expense of a move. It is cheaper to leave them behind.

 

First of all, what does the law say? The current legislation, namely "the rental lease" of 2006 anticipates the possibility of a furnished rental property and two important points follow:

- By furnished, the law means a property "fully equipped" so 2 or 3 pieces of furniture here and there are not considered sufficient,

- The rent can be increased because of its equipment as long as the rent does not reach twice the rent for the same unfurnished property.

 

In practice, most often, the cost of furniture is totalled, their monthly depreciation is calculated according to the estimated lifespan of this furniture; monthly rents are then increased accordingly.

Be aware that some pieces of furniture do not stand up to intensive use for very long and they can sometimes be neglected. Most landlords therefore opt for less costly accommodation, but in this case, they cannot claim a very large rent increase.

 

Fiscally the improvements on a given property are considered as expenses rather than as investments to be depreciated as long as they do not exceed a certain percentage of the total investment. At current market prices, these costs are more frequently to be treated as an expense.

 

There is little choice in Luxembourg in terms of furniture at low prices, so all owners go to the same branded shops and all rentals tend to be alike.

 

Watch out for the dormitory effect!

 

Between amenities that look the same from one property to another and contractual restrictions that prohibit holes in walls and other opportunities to individualise one's home, tenants are often frustrated.

 

Monde Avenir supports tenants

 

We suggest decorating ideas to personalise your space. 

 

Monde Avenir supports owners

 

In capacity of professional interior designers, we gladly give you advice on how to make your property attractively furnished.

 

To give your rental property a distinctive character, contact us!

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HOW TO FURNISH A PROPERTY YOU ARE RENTING ? FROM A TENANT'S PERSPECTIVE 

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When I moved to Luxembourg, we left our furniture behind us. Firstly because it made more sense to rent our own home as a furnished property secondly because too many items had been custom-designed and would therefore not fit into any new home.

 

We knew we would not rent forever so we went to everyone’s favourite “cheap and cheerful” furniture shop. The challenge was then to put our own stamp in each room to feel at home. This is what I did and what I advise you to do in turn:

• Always respect the volumes; furniture must not look too big nor too small,

• Decide on a colour scheme and stick to it. One easy trick is to work with several neutrals : white, black and greys and combine with one dominant colour, and possibly another one, used more sparingly,

• Landlords often impose a no-hole policy. It does not mean that you cannot hang anything on the walls but that you must be careful with the nails you use: the thinner the better (refill the holes with toothpaste but do not tell anyone I told you!). Nowadays there are also several brands of non-permanent sticky tapes that leave hardly no trace on the walls,

• Surround yourself with small accessories you love: pictures, books or whatever you like looking at,

• Pay special attention to the functional accessories such as the bedding and the bath towels. Choose really nice and good quality items; the whole space will instantly feel more precious and luxurious.

 

Enjoy decorating !

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WHO TO CONTACT WHEN YOU ARE A TENANT - WHO ARE THE SERVICE PROVIDERS

 

In case of theft or damages incurred inside the property, contact your insurer as quickly as possible. You only have a few days to declare any damage.

 

In case of theft or damages inside your building in the common areas, contact the property management. Their contact details are always displayed by the front door or the letterboxes.

 

Water consumption, clean water supply, waste water management and water piping : all is managed by the Commune you live in, check under Technical Services for the direct contact.

If, as a tenant, the bills will be addressed to you directly and not through the property owner, you must register for account subscription and account cancellation / transfer; it is likely that only you can do it and that a request for registration from your estate agent will not be accepted.

Go to the commune or fill in the online forms, it is likely that you will need to present your rental contract as well as proof of entry and/or exit inventory.

 

N.B. Ground settlement are charges to be borne by the property owner. It relates to the maintenance of water pipes outside the property.

 

Gas consumption is managed by a third party supplier, likely to be Enovos.

If, as a tenant, the bills will be addressed to you directly and not through the property owner, you must register for account subscription and account cancellation / transfer. Usually the estate agency does facilitate this process.

 

Electricity consumption is managed by a third party supplier, likely to be Enovos; in the city it acts under the name of Leos.

If, as a tenant, the bills will be addressed to you directly and not through the property owner, you must register for account subscription and account cancellation / transfer. Usually the estate agency does facilitate this process.

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MAINTENANCE GUIDELINES

 

When living abroad you realise that many things look and operate differently from the way they do back home.

What might be obvious to a Luxembourgish landlord is not to non-Luxembourgish tenant; this is why we have compiled this list that we are happy to develop as your comments come in.

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Boiler Heating Unit Maintenance:

The boiler should be serviced every year. The landlord will provide you with the contact details of the service company. However the latter usually sticks a label on the unit itself after each maintenance service, this label usually gives details of the last service together with contact details for emergency and future intervention.

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Power Circuit Braker Box:

If a power outlet is ever over-loaded in the hose, this will cause the power in that outlet to stop working.  In order to fix this, please reduce the items being plugged in and re-set the corresponding switch in the circuit braker box (also known as electrical box).  This circuit braker box is usually located in the basement of the house, if there is one. Alternatively, it will be found typically in a hall or on a landing. If the rental is a very large property, there will be one main circuit braker box and one or two relay boxes usually installed on each floor of the property. You will find the switch corresponding to the overused socket in the nearest braker box.

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Basement Drains:

Basement drains are typically found in the basement rooms that we call “non habitable”; for sure you will find them in laundry rooms and garage areas. It is good practice to pour water in them regularly so as to avoid bad smells from lingering liquid inside the pipes below the drains. We recommend you pour approximately 0.5 liter of water to fill a dry trap and approximately 200 ML if applied once per week. 

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Kitchen appliances: dishwasher

The dishwasher requires Dishwasher Salt to be applied approximately every month.  This salt can be purchased at most supermarkets. 

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Kitchen appliances: hood

Most hoods are operating in a closed circuit with the air being recycled over and over as latest building regulations do not allow exit vents to be installed on external walls. The hoods contain coal filters which need to be replaced every 6 months or so (depending on how much cooking you are doing!).

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Kitchen appliances:

Landlords usually leave the appliances’ user guides in the rental properties but most of them can now be downloaded from the manufacturer’s website.

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Outside Drainage Ravine:

Outside drainage ravines (usually located along garage doors, terraces or along other external walls) should be cleaned out approximately every six months.  Sand, leaves and other debris can accumulate here.  By cleaning it out, you prevent a back-up of water from happening.

Similar debris can accumulate in the gutters at the bottom of the roof. As a tenant you are not expected to get up on a ladder and clean the gutters. However, as with everything damaged, faulty or in need of maintenance, you must mention it to the landlord who will in turn arrange for the gutters to be cleaned up.

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Calcium issues:

The water can be high in calcium, and this accumulates in the faucets and on the sanitaryware.  You may find that the flow from taps then becomes weaker; it is advisable to remove the tap end filters and rinse them from accumulated calcium. Sinks, wash hand basins and other sanitaryware may look like they have been coated with a thin layer of white substance (dry calcium). By using vinegar mixed with water (1 par vinegar for 2 par water) as your routine cleaning, you will avoid calcium accumulation.

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Hanging pictures and other elements on the walls:

The rental contract often stipulates that the tenant must not hang any pictures. Such clauses are often the result of abusive behaviour, whereby some people have drilled very large holes creating permanent damage on walls.

It is terribly unfair not to be able to make the rental property your own therefore, I suggest you consider using the following products which not only will avoid the drilling pf holes but which also leave no marks on the walls once removed.

 

Hanging blinds

For similar reasons as above, the drilling for blinds is not welcome. You do however need a good night sleep! I therefore suggest the following product which simply hangs over the window part of the opening. No drilling and no screws in sight.

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