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On occasion, disagreement may arise between the landlord and the tenant on the setting of rent and/or additional rental expenses. In most cases, the two parties are able to come to an amicable arrangement.
However, when the parties are unable to reach an agreement, the landlord may decide to lodge an application to increase the rent with the Rent Committee of their commune. The tenant, for their part, may apply to the same Committee to reduce the rent.
Considered as conciliation bodies, the Rent Committees set up at the communal administration offices are a useful tool in amicable conflict resolution. Indeed, they are highly useful in practical terms, because many disputes conclude with an agreement, rather than having to be pursued through the courts.
Who is concerned
This procedure is applies to all tenants or landlords of residential property. The following types of properties are excluded:
- those subject to commercial lease agreements;
- those subject to administrative lease agreements;
- those subject to industrial lease agreements;
- rental agreements for artisanal use or for the exercise of a freelance/liberal profession.
The following property types are also excluded:
- secondary residences;
- premises that are not attached to a housing unit (such as a garage not attached to a house);
- hotel rooms;
- shelters for temporary accommodation of foreigners for the purpose of their reception and integration in Luxembourg;
- furnished or unfurnished dwellings in special accommodation facilities (old people's homes, integrated centres for the elderly, geriatric centres, centres for the disabled, etc.);
- furnished or unfurnished dwellings made available to natural persons as part of a social assistance programme implemented by a commune, an association of communes, a non-profit association or a foundation involved in the field of housing.
Before being able to apply to the Rent Committee, though, the claimant (be it the landlord or the tenant) must first notify the other party of their intention to do so, in writing—it is advisable to send the notification by registered letter—, failing which the application will not be accepted.
This notification is considered to be an attempt to reach agreement prior to taking the case to the Rent Committee.
If no agreement has been reached within a month of that notice being served, then the claimant can send a request to the board of the mayor and aldermen of the commune where the building in question is located. That board of the mayor and aldermen will then forward the application to the appropriate Rent Committee.
How to proceed
Conditions and procedure
The Rent Committee can only hear disputes relating to the setting of rent and additional rental expenses.
Applications to the Rent Committee to increase or decrease rent submitted during the first 6 months of the lease will not be accepted. (In calculating that period, it is not the date of signing of the lease which is taken into account, but the first 6 months of the rental relationship). Thus, a tenant having accepted a certain level of rent at the time of signing the lease cannot, immediately after signing that lease, apply to the Rent Committee for a reduction of the rent.
Although the procedure with the Rent Committee is not a judicial procedure, but rather a procedure to seek conciliation between the parties, there are a minimal number of rules which must be observed:
1) After the claimant has sent the request to the board of the mayor and aldermen of the commune where the building is located, the tenant and landlord are summoned to appear before the Rent Committee, by registered letter with acknowledgement of receipt, containing:
- the date, time and place to appear before the Rent Committee;
- a copy of the claimant's original request.
The parties must appear in person or be represented by proxy—a person with the authority to act with power of attorney on behalf of the other, such as a lawyer—before the Rent Committee, at the time and date indicated in the summons, and will present their testimony.
2) The Rent Committee may visit to the rented property. It may bring in an expert/consultant to clarify one or other of the issues raised before the Rent Committee. The fees incurred by such an expert assessment are not borne by the Committee, but by the parties, depending on the outcome of the matter. The claimant, however, must advance these fees.
3) Following the submission of a dispute to the Rent Committee, several scenarios are possible:
- in case of conciliation, the Committee's written report setting out the conditions of the arrangement must be signed by the parties (or their representatives) and by the chairman of the Committee;
- in case of non-conciliation or failure to appear by one of the parties, the Committee will determine the rent falling due and/or the advances on fees;
- when the parties have asked the Rent Committee to arbitrate, the decision will be binding on the parties and come into effect immediately.
4) The Committee is required to hand down its decision within 3 months of the date of submission of the application. Decisions by the Rent Committee do not have the status of judicial decisions. Therefore, they cannot acquire the status of res judicata. These decisions are only mandatory because of the express or tacit acceptance of the outcome by the parties.
Appeal against the Rent Committee's decision
If dissatisfied with the Rent Committee's decision, either one of the parties may, within a month, file an appeal with the Justice of the Peace (juge de paix), depending on the location of the building. That 1-month period begins when the decision is notified to the parties by registered letter.
If one of the parties (for example, the landlord) has not taken action against the decision within a month of notification of the Committee's written report, they are deemed to have accepted it (including any of the fees they are instructed to pay). Later, in sub-judice, in the context of an appeal filed against the Rent Committee's decision by the tenant, the landlord cannot decide to increase or alter the rent. Thus, if no appeal has been filed against the decision within the prescribed 1-month period, the Rent Committee's decision is considered to have been accepted fully by the parties.
The decision to set the rent passed by the Rent Committee (or by the Justice of the Peace) may take effect retroactively from the date of the first rent falling due after the date on which the board of the mayor and aldermen received the request to raise or lower the rent.