Draft Law N° 278 of 12 May 2026 (hereinafter the “Draft Law”), applicable exclusively to premises for commercial use and only where the parties have contractually agreed to be bound by it, was adopted alongside the provisions of Law N° 490 of 24 November 1948 concerning leases for commercial, industrial or craft purposes.
The Draft Law establishes commercial tenancies governed by provisions designed to facilitate the establishment and development of commercial activities, while ensuring a secure framework for relations between landlords and tenants.
Here are the key points to remember:
The Draft Law, which would apply at the discretion of the parties, would be restricted to commercial activities, excluding estate agencies, banking and insurance activities.
In Article 5, the Draft Law caps the amount of the security deposit at three months’ rent and service charges.
Article 6 of the Draft Law prohibits the practice of key money (“pas de porte”), i.e. the practice whereby the tenant pays a sum of money to the landlord upon signing the lease, which is not refunded to the tenant at the end of the lease.
The term of the lease is a minimum of seven years, rather than nine years with triennial renewal as provided for in Law N° 490 of 24 November 1948.
In the event of termination of the lease after a period of one year from the date on which the commercial lease takes effect, and subject to six months’ notice, Article 9 of the Draft Law provides that no compensation, rent or service charges remaining due between the effective date of termination and the normal expiry date of the lease shall be payable.
Similarly, no compensation is payable in the event of non-renewal of the lease.
Entry into force and compliance:
Draft Law N° 278, creating a lease exclusively dedicated to commercial activities, was received on 5 May 2026 and adopted in a public sitting of the National Council (“Conseil National”) on 12 May 2026.
The Government may then choose to convert this text into a government bill or to take no further action on it.
Our team remains at your disposal to assist you and answer any questions you may have on this subject.
A.L.F.A. MONACO
