The formalities of the termination of the lease
By Lex Thielen, Attorney at the Court.
Residential lease
In the case of a housing lease, Article 12 of the Residential Tenancies Act of 21 September 2006 sets out the various conditions to be respected in the event of termination of the lease.
- Termination for personal need of the lessor
The landlord invoking the personal need may terminate the lease when it expires when it is for a fixed term, respectively with a notice of 6 months in the case of an indefinite lease. It should be noted that the purchaser of a rented dwelling who wishes to occupy it himself - or have it occupied by a relative or ally up to the 3rd degree inclusively - must imperatively send the tenant a registered letter termination of the lease within three months from the acquisition of the unit.
The law provides for specific formalities for the termination of the lease for personal need of the lessor, which are stricter than in case of termination for other reasons. The form requirements are as follows:
• the termination must be in writing,
• the letter of cancellation must be sent by registered mail to the post office with acknowledgment of receipt,
• the letter must state the reasons for terminating the lease,
• If necessary, attach proof of the reasons given, but the law does not specify which documents are involved.
In addition, the letter of cancellation must - under pain of nullity - mention the text of paragraph (3) of article 12 of the Residential Tenancies Act of 21 September 2006, which sets out the conditions under which the lease may be terminated for personal need. The law does not specify what it means to "mention": to make a reference to the text or quote it in full? Given the importance of the possible consequences, we believe that it is more prudent to cite it in its entirety. Since readers have asked us questions about this, we reproduce below this text - long enough! - which is the following:
"By way of derogation from Article 1736 of the Civil Code, the period of termination in the cases provided for in paragraph (2), point a, is six months. The letter of cancellation must be written, motivated and accompanied, if necessary, by related documents and be made by registered letter with the return receipt. It must mention, under pain of nullity, the text of this paragraph.
Within three months of the notice of receipt at the post office, the tenant may, under pain of foreclosure, request an extension of the period of termination to the justice of the peace. In the absence of this request, the landlord may apply to the justice of the peace for a decision authorizing the eviction of the tenant after the expiry of the six-month cancellation period. However, the tenant may still file an application for a stay of execution of the decision, in accordance with Articles 16 to 18. In this case, the eviction of housing by the tenant must take place no later than fifteen months after the date of sending the letter of termination of the lease. The decision authorizing the forced eviction of the tenant will not be subject to opposition or appeal.
In case of request for extension of the cancellation period, the parties will be convened within two months at the hearing. Unless the request is seriously questionable or disputed, the justice of the peace will grant an extension of time to the tenant provided that it justifies, before the expiry of the initial period of six months, by parts, or be in the process of building or to convert a dwelling belonging to it, either to have rented a dwelling under construction or to conversion, or to have made useful and extensive steps to find a new home. The extension of the time limit may in no case exceed by twelve months the date of expiry of the initial period of six months. The favor of suspension, provided for in Articles 16 to 18, will no longer apply. The decision granting or refusing the extension of the period shall be legally enforceable for a forced eviction of the tenant after the expiry of the period. It is not subject to opposition or appeal. "
- Resolution for tenant's fault
The landlord may ask the judge to terminate with immediate effect the lease contract in case of fault of the tenant. He does not need to comply with any notice or wait for the next contract. In this case it is not a cancellation, but a resolution of the lease. To obtain this judicial resolution, the lessor will seize by simple request the justice of the peace of the place where the leased dwelling is located.
If he prefers, the lessor may invoke the lessee's fault as a serious and legitimate cause and terminate the lease on that basis. In this case, he must respect the notice period applicable in this respect.
- Termination by the lessor for serious and legitimate reasons
If the lessor has serious and legitimate reasons for terminating the lease - eg if he wishes to carry out works of such a scale that their smooth operation requires the premises to be vacant - he may give leave to the tenant. However, he must observe certain deadlines:
Termination for serious and legitimate reasons can be done:
• at the end of the lease, when it has a fixed term,
• with prior notice according to the custom the places which, according to the jurisprudence is of 2 months in the municipalities falling under the jurisdiction of the court of peace of Esch-sur-Alzette and 3 months in the other communes, including Luxembourg if it is a lease of indefinite duration,
• If the lease agreement provides for a different notice, it must obviously be respected, as long as it is in favor of the tenant.
According to the law, the lessor must "establish" serious and legitimate grounds. The burden of proof therefore belongs to him in case of dispute by the tenant.
By contrast, unlike termination for personal need, the letter of termination for serious and lawful reasons does not need to mention any text of the law. Moreover, the termination is not related to any form, it does not even need to be written and could be verbal or even tacit, subject to the difficulties of proof of such termination.
- Termination by the tenant
The tenant may terminate the lease without having to rely on any reason. However, he must respect the deadlines in this respect. Thus, he must respect the term of the lease if it is for a fixed term. Otherwise, he may be ordered to pay the landlord the necessary rent until the relocation, plus possible damages.
In the event that he has entered into an indefinite lease, the lessee must respect the notice following the use of the premises, which is the same as that of the lessor in the event of termination of the lease for serious and legitimate reasons and which we have described here. above, namely 2 respectively 3 months.
- Resolution for fault of the lessor
In the event that the lessor fails to comply with its obligations, the tenant can apply for a judicial resolution immediately, without condition of notice or respect of the deadline. But the resolution of the lease is effective only with the decision made in court. Until then the tenant remains bound by his contract.
However, if he wishes to avoid resorting to legal proceedings, the tenant can invoke the fault of the lessor to terminate the lease at maturity, respectively with notice in case of lease of indefinite duration.
- Termination by mutual agreement
Even if the law does not mention it expressly, a residential lease can always be terminated by mutual agreement. Neither a particular form nor a period of notice are in this case imposed on the parties. However, it is prudent to document this agreement in writing to avoid any future problem of evidence.
Commercial lease
For commercial lease the conditions of form are different than those relating to the lease of housing.
- Form
No form is provided for termination by mutual agreement. Termination can be oral, written and even tacit.
Termination with notice shall be by any written means, unless the contract provides for the obligation of a registered letter. Evidently problems of proof can arise in case of simple mail. An indication of the reasons in the termination letter is not normally required unless the parties have provided for such an obligation in the contract.
- Time limit
The parties may provide for a notice period in the lease of indefinite duration. Otherwise, the period of use applies which, according to the case law, is 6 months. In case of termination for fault, no notice period is to be respected, the resolution can be requested immediately.
Finally, it should be noted that in a fixed-term contract that does not contain a renewal clause, a termination is not necessary - it ceases automatically upon expiry of the agreed term.
Mixed lease
The judge will examine whether the will of the parties was to sign mainly a residential lease or a commercial lease and he will apply the formal conditions relating to the lease which, in his eyes, has been preponderant in the will of the parties.