Airbnb is a collaborative platform that allows individuals to rent all or part of their accommodation to third parties as temporary accommodation. This is a recent and rapidly growing social phenomenon, and we will discuss some of its interesting legal aspects.

1. Legal Context

Although Airbnb rentals were not governed by specific legislation when they first emerged, many cities around the world have now introduced regulations, the content of which can vary considerably.

At the EU level, the European Commission has come out in favour of collaborative platforms on the grounds that they contribute to the economy and the internal market.

In Luxembourg, collaborative short-term accommodation platforms have been fairly well received.

At the legal level, the relationships between the parties to an Airbnb-type rental are, in the vast majority of cases, governed by general contract law, or even by general law on rental contracts, and not, as some sources claim, by the Law of 21 September 2006 on residential leases.

The legislation applies exclusively to rentals for the purpose of primary residence and excludes second homes.

The Grand Duchy has expressed its intention not to establish specific standards applicable to the platforms in question as long as individuals do not behave as genuine professionals.

However, they will have to comply with several rules: 

• The legal criteria for health, hygiene, habitability and safety of the accommodation;

• Keeping accommodation records for travellers;

• Declaration of income from the activity (it should be noted that the Tax Administration regularly consults the platform and carries out the relevant checks);

• Prior notification to the mayor of the rental of the premises and the maximum number of people that can be accommodated there.[1]

Finally, we refer to Article 18 of the amended law of 17 July 1960 establishing a status for hotels, which prohibits any individual from “habitually providing accommodation to travellers for payment if they have not registered their rooms with the municipal authority responsible for room registration” under penalty of a fine of between 25 and 250 euros (however, there is no definition of the frequency of accommodation taken into account).

2. Some Specific Aspects

• Airbnb and the tenant

Significant litigation is likely to arise in relation to tenants who profit from their accommodation via Airbnb.

Article 1717 of the Luxembourg Civil Code allows the lessee to sublet their accommodation. However, as this provision is not a matter of public policy, most contracts simply exclude it. What is the situation in the case of Airbnb?

In a decision by a Luxembourg Court, frequent rentals through the Airbnb platform were found to be contrary to the lease agreement, which contained a clause prohibiting subletting.[2]

It should be noted, however, that in the case in question, the lease in its entirety appeared to clearly prohibit Airbnb-type rentals, in particular by virtue of another clause. It is therefore not certain whether the subletting prohibition clause alone would have been sufficient to prohibit rental via a collaborative platform, although the author is of this opinion.

Apart from Article 1717, Article 1729 of the Civil Code offers the landlord more options, allowing them to terminate the lease through the courts if the tenant uses the property for a purpose other than that for which it was intended.

In order to avoid any dispute, it is recommended that landlords include a clause in their lease prohibiting, without their express prior consent, both subletting and letting or making the property available via an accommodation platform such as Airbnb.

• Airbnb and co-ownership

According to Article 2 of the amended law of 16 May 1975 on the status of co-ownership of buildings, co-owners have free use of the private and common areas, subject to the rights of the other co-owners and the intended use of the building. This purpose is the use to which the co-owners have intended to put the building, taking into account its location and layout and in accordance with the building regulations. It must be specified in the co-ownership regulations.

In the absence of a specific prohibition, it is likely that a judge would consider Airbnb rentals in a co-owned property to be authorised, unless the co-ownership agreement contains a clause prohibiting professional activities. This is because repeated Airbnb-type rentals may, in some cases, constitute a professional activity.

The co-ownership regulations may also expressly prohibit Airbnb-type rentals. Such a prohibition clause could be justified in a co-ownership that is primarily residential in nature. The courts will assess each case on its own merits, as the law on co-ownership stipulates that co-ownership regulations cannot impose unjustified restrictions on co-owners, and clauses restricting the rights of co-owners must be interpreted strictly.

• Airbnb and the local authority

The legislator has provided for penalties for anyone who infringes in any way the provisions of a municipality’s development plans.[3]

Where a development plan stipulates that certain buildings may not be used for commercial purposes, repeated short-term rentals of such accommodation could be contrary to the development plan if it is considered that this type of rental carried out on a regular basis is of a commercial nature. However, it is not certain that this activity can be considered as “commercial activity”, as the rental concerns residential accommodation.

On the other hand, a single short-term rental may also be contrary to a municipality’s development plan if the rented property is classified as a single-family, two-family or multi-family dwelling, as these types of dwellings are intended for permanent accommodation.[4]

Finally, in cases where Airbnb-type rentals are not in themselves incompatible with development plans, prior authorisation must be sought from the mayor in the event of a change in the use of the premises.[5]

Airbnb-type rentals could, where applicable, constitute a change of use through the conversion of residential accommodation into commercial accommodation (provided that repeated short-term rentals can be considered as ‘commercial operation’) or through the conversion of a single-family, two-family or multi-family house into accommodation not used as permanent accommodation.

[1] By a law of 20 December 2019 and its implementing regulation of the same date, the Luxembourg Government amended the health, hygiene, safety and suitability criteria for dwellings and rooms rented or otherwise made available for residential purposes. Even though premises rented through a collaborative platform do not generally constitute principal residences within the meaning of the law of 21 September 2006, they are nonetheless rented for residential purposes. We therefore consider that the declaration to the mayor provided for by the law of 20 December 2019 is mandatory in the case of “Airbnb” rentals.

[2] Luxembourg Magistrates’ Court, 13 June 2019, judgment no. 2008/2019.

[3] Article 107 of the amended law of 19 July 2004 on municipal planning and urban development.

[4] S. Couvreur, Towards “Airbnb” regulations in Luxembourg?, Krieger et Associées, November 2018, http://www.krieger-avocats.lu/blog.

[5] Article 37 of the amended law of 19 July 2004 on municipal planning and urban development.