Monaco regulates the rental of part of its older properties through a unique protective regime. Law No. 887, enacted on 25 June 1970, is one of its pillars. It sets out clear rules: who can rent, for how long, and under what conditions. This guide explains everything about this law, whether you are a tenant or a landlord.
Monaco is one of the densest and most expensive territories in the world. Without a protection mechanism, long-term residents would no longer be able to live in the Principality. Law 887 was created to prevent this. It guarantees certain residents access to housing. It applies to older buildings constructed before 1 September 1947. These buildings form what is known as the protected sector of Monegasque real estate.
Law 887 applies only to rental relationships. It has no impact on property purchase or sale transactions. Anyone can buy an apartment subject to this law. However, if the owner wishes to rent it out, they must comply with specific rules regarding tenant selection and lease conditions.
Law 887 coexists with two other legal frameworks governing housing in the Principality. Law No. 1.235, as amended by Law No. 1.291, applies to the protected social sector. Rents are set by the administration and tenants are selected according to strict priority rules. The free sector, meanwhile, concerns all buildings constructed after 1947. No restrictions apply there. Law 887 is positioned between these two extremes. It maintains eligibility criteria for tenants, while leaving the landlord free to set the rent.
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Law 887 applies to housing located in buildings constructed or completed before 1 September 1947. This is the only determining criterion. Any building delivered after this date falls under the free sector. In practice, the properties concerned are located in older bourgeois residences. They are mainly found in historic districts such as Monte-Carlo, La Condamine or Le Rocher. These apartments are often spacious, with high ceilings. However, they rarely include parking, an elevator or a swimming pool.
Older buildings subject to this law are becoming fewer and fewer. They are gradually being demolished to make way for new developments that fall directly under the free sector. This evolution mechanically reduces the rental supply accessible to eligible residents. It also increases the asset value of properties still subject to this regime.
The legal status of the property is usually mentioned in the listing or by the seller. If not, several clues can help identify it. The year of construction, the absence of modern amenities, or a location in a historic district are good indicators. In case of doubt, a real estate professional in Monaco can confirm the exact regime. The Housing Department may also be consulted.
Properties under Law 887 may only be rented to individuals belonging to precisely defined categories. The official text can be consulted on Legimonaco. Four categories are concerned:
Unlike Law 1.235, there is no strict priority order between these categories. The owner is free to choose among eligible candidates.
The question of residence is often a source of confusion. Our article Renting in Monaco without being a resident answers it in detail.
Proof of eligibility must be provided to the Housing Department. Documents vary depending on the profile:
The tenant must personally occupy the property. Subletting is prohibited unless expressly authorised by the administration. However, the law allows mixed use under conditions. A tenant may occupy the property as a primary residence while carrying out a liberal profession there, if the condominium rules allow it and if the main purpose remains residential use.
Any lease signed under Law 887 must have a minimum duration of 6 years. This duration is a fundamental guarantee for the tenant. It ensures housing stability in an extremely tight market. From the second year onwards, the tenant may terminate the lease annually at their sole discretion, without having to justify their decision. The landlord, however, may only give notice in specific cases: demolition for reconstruction, building elevation, or works making the property uninhabitable. A reinforced protection applies to tenants over 65 years old or with a disability: the landlord cannot exercise their right to repossession during the first 6 months of the lease.
To fully understand lease termination and renewal conditions in the Principality, consult our guide renewal and termination of a lease in Monaco.
This is one of the distinctive features of Law 887. Rent is neither capped nor set by the administration. The amount is freely negotiated between landlord and tenant. In practice, these rents are often lower than in the free sector. This is because the eligible tenant pool is limited, naturally reducing price pressure.
The lease may include an annual indexation clause. It allows the rent to be adjusted each year based on changes in the consumer price index (excluding tobacco) published by INSEE. This increase is capped at that variation, which protects the tenant against excessive rent hikes.
To go further, consult our dedicated page on rental costs in Monaco: security deposits, charges, and additional costs to expect.
Even if the rent is freely set, rental conditions must be validated by the Housing Department before any letting. This visa confirms compliance of the lease with Law 887. Without this step, the lease may be challenged. It applies to each new rental of the property.
When a property under Law 887 becomes vacant, the landlord must declare it to the Housing Department within 8 days of vacancy. This deadline is set by Ordinance No. 4.621 of 29 December 1970. After 3 months without declaration, a fine of €50,000 may be applied. Unless justified, the property must be reoccupied within 3 months of declaration. These rules reflect the authorities’ desire to keep this rental stock actively in circulation.
For each new rental, the landlord completes the “Rental Declaration” form (No. 362-0014_01-2020) and submits it to the Housing Department with tenant documents. The process is done online via the Mon Service Public Monaco portal, by mail, or directly at 10 bis, quai Antoine 1er, Monaco (tel. +377 98 98 80 08). The Department reviews the file and validates compliance. The rental can only take effect after this validation.
Renting a property to an ineligible tenant, or without prior declaration, constitutes an offence. The criminal sanctions provided are set out in Law 887 itself. This system protects eligible residents and ensures the integrity of the Monegasque protected sector.
The Monegasque rental market is divided into three main categories, each with its own rules.
The free sector applies to buildings constructed after 1 September 1947. The landlord freely chooses the tenant, sets the rent and determines the lease duration. Almost all new developments fall under this sector.
Law 887 applies to older high-quality buildings constructed before 1947. The tenant must belong to one of the eligible categories. The lease is a minimum of 6 years. However, rent is freely set between the parties. It is an intermediate regime.
Law 1.235 / 1.291 also applies to older buildings, with a stronger social purpose. Beneficiaries are selected according to strict priority rules, primarily in favour of Monegasques. Rent is set by the administration. This regime offers maximum protection for tenants but the strictest constraints for landlords.
For an eligible tenant, Law 887 provides real stability. The 6-year lease protects against abusive termination. The regulated indexation prevents sudden rent increases. And administrative oversight by the Housing Department ensures a formal and secure framework.
Under Law 887, the landlord retains freedom to set rent. This is not the case under Law 1.235, where rent is administratively controlled. The landlord can also freely choose among eligible candidates, without following a priority order. This system is more balanced between social protection and contractual freedom.
Apartments under Law 887 are generally purchased at a lower price per square metre than those in the free sector. This discount is explained by the constraints imposed on landlords. For a long-term investor, it represents an entry into the Monegasque market at a reduced cost. As a comparison, the 2025 Real Estate Observatory by IMSEE indicates that the average price per square metre exceeds €57,500 in 2025 for the entire market. New properties reach €65,602 per square metre. Law 887 properties allow entry into the Principality well below these levels.
The profile of eligible tenants ensures structurally sustained demand. Monegasques, long-term employees and resident families cannot easily find comparable housing elsewhere in the Principality. The risk of prolonged vacancy is therefore low. The clear legal framework also reduces disputes and simplifies day-to-day management.
However, investors must take certain constraints into account. Rental yield is often lower than in the free sector. Short-term rental is impossible. Tenant selection is restricted. And each tenant change involves administrative procedures. A Law 887 apartment is therefore primarily a long-term asset, suited to investors prioritising stability over immediate returns.
The legal status is usually indicated in the listing or by the seller. A building dating from before 1947, without parking or swimming pool, located in a historic district of Monaco, is very often concerned. Using a specialised real estate agency in Monaco helps confirm this before any commitment. You can also consult our available rental properties in the Principality.
The tenant must ensure they fall into one of the categories defined by law. It is recommended to prepare supporting documents in advance. This speeds up the process once the property is identified.
The landlord freely sets the rent. Both parties agree on the contract terms. The lease must have a minimum duration of 6 years. An indexation clause may be included. The agreed conditions must then be submitted for visa approval by the Housing Department.
The landlord submits the rental declaration form to the Housing Department with tenant documents. The process is available online via Mon Service Public Monaco. The Department reviews the file and issues its visa. The rental can only take effect after this validation.
Buying an apartment under Law 887 implies no restriction if you intend to occupy it personally. The rules only regulate renting to a third party. As long as you live in the property yourself, you are free to use it without eligibility conditions or administrative obligations. The law only becomes active when you decide to rent it out. This allows you to purchase at a lower price than the free market, live in it peacefully, and later turn it into a regulated rental investment.
When purchasing real estate in Monaco, whether subject to Law 887 or not, the Monegasque State has a right of pre-emption. Concretely, after the preliminary sale agreement is signed, the State has 4 weeks to substitute itself for the buyer and acquire the property under the same conditions. This right is rarely exercised, but it must be considered in the transaction timeline. It may delay the final deed by about one month. A Monegasque notary will inform you of the procedure.
Yes. If the landlord decides to sell the property while it is occupied, the existing tenant may benefit from a priority right. This means they must be informed of the sale and can purchase the property with priority over other buyers. This mechanism protects eligible tenants from eviction due to resale.
Yes, under conditions. An eligible tenant may occupy the property as their primary residence while carrying out a liberal activity there, such as doctor, lawyer or consultant. This is possible if condominium rules allow it and if the main purpose of the property remains residential use.
Yes, if included in the lease. An annual indexation clause may be included in the contract. It allows the rent to be adjusted each year according to the variation in the consumer price index published by INSEE. This increase is capped at that variation. Without such a clause, rent remains fixed for the entire lease duration.
At the end of the lease, the landlord may choose not to renew it. They do not need to justify their decision. However, they must respect the notice period set in the contract, usually 3 to 6 months. If neither party expresses the wish to terminate, the lease is tacitly renewed for another 6-year period.
No. Seasonal or short-term rental is incompatible with Law 887. The lease must have a minimum duration of 6 years. Any short-term rental would violate the law and expose the landlord to penalties.
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