Higher rental yield and more secure income thanks to the presence of several tenants: renting out your apartment as a shared accommodation may seem like an excellent idea. However, be careful — house sharing comes with its own rules and limitations… and poor preparation can quickly work against you in many ways.
To put all the chances on your side, discover the main mistakes to avoid when renting your property to flatmates.
1. Overlooking the legal framework of shared accommodation
There is a legal framework in Luxembourg that applies to all forms of shared housing. Before renting out your apartment or house, you must establish both:
- A single lease agreement, signed by you and all the tenants.
- A house-sharing agreement, signed by all the tenants, to clearly outline how community living will work and to define practical arrangements (rent and utility sharing, inventory of furniture, move-in and move-out terms, possible conflict management, etc.).
- A joint liability clause. All tenants must share responsibility for complying with the terms of the lease, particularly concerning rent payment. In practice, this means that if one tenant fails to pay, you can claim the full rent from any of the other tenants.
2. Failing to clarify the tenants’ joint liability
Joint liability only applies to single leases. In this case, all your tenants are jointly responsible (hence the importance of clearly formalizing this clause from the start). However, if you set up multiple (individual) leases, it means that each tenant is only responsible for their own share and that no joint liability applies.
Think carefully in advance about the most suitable structure to ensure your financial security within this shared rental. Don’t hesitate to seek advice from real estate professionals who can guide you (depending on the type of property or the tenant profiles you plan to host).
For a smooth rental process, rely on real estate experts and save valuable time!
3. Forgetting about early termination terms
In a shared rental, tenants benefit from a certain degree of flexibility:
- A tenant may leave the property before the end of the lease by giving three months’ notice via registered letter to both the landlord and the other tenants. They must find a replacement or prove that they actively searched for one. Once a new tenant is found, all parties sign an amendment to the lease.
- If the majority of tenants leave within a three-month period, you may terminate the entire lease with three months’ notice.
- In case of early departure, you must carry out an interim inspection to determine responsibilities and any related costs.
Anticipating these elements is essential — both to save time and to avoid disputes.
4. Ignoring rent ceilings and the revision principle
In Luxembourg, the total annual rent (for shared or any other type of rental) cannot exceed 5% of the capital invested in the property. You must take this into account when setting the rent per tenant.
“When reviewing the rent, specific rules also apply.”
Likewise, when revising the rent, regulations must be respected. Any increase cannot exceed 10% every two years. However, you may add a furniture supplement if you rent out a furnished apartment or house. This supplement is capped at 1.5% of the total furniture value.
Other important rules should also be considered when renting out your property as shared accommodation: make sure you comply with all hygiene, safety, and habitability standards. Finally, don’t hesitate to require your tenants to take out home insurance — as any damage or incident could lead to disputes among multiple tenants.
