Monaco Law 887
Rent control, tenant rights and the effect on property value. What every buyer needs to know before purchasing a Law 887 property in Monaco.
Important for buyers
Law 887 is a significant legal constraint. Properties affected by this legislation are typically priced well below free-sector equivalents. MonacoViews flags Law 887 properties clearly so you can make an informed assessment before enquiring.
What is Law 887?
Law 887 is a piece of Monegasque rent-control legislation that provides residential tenants in Monaco with the right to remain in their home. The law was introduced at a time when Monaco faced significant housing pressure, and it was designed to prevent landlords from displacing sitting tenants simply by selling the property or changing the intended use.
The core principle of Law 887 is that a sitting tenant cannot be required to leave their home merely because the property changes hands. An owner who sells a Law 887 property transfers it subject to the existing tenancy. The buyer steps into the shoes of the previous owner and takes on the same obligations.
A further distinguishing feature of Law 887 is the hereditary right. When a qualifying sitting tenant passes away, the right of occupation can transfer to a close family member who was habitually resident in the property at the time — typically a spouse, civil partner, or direct descendant. This means the restriction can persist across two generations of a family, and the timeline to vacant possession may be very long or entirely open-ended.
What does Law 887 mean for buyers?
- No right to vacant possession on purchase
- Rent is set below market rate
- Tenant right may be inherited by family
- Owner use or redevelopment is restricted
- May affect mortgage financing options
- Purchase price typically 20–40% below free-sector
- Guaranteed rental income from sitting tenant
- Predictable, regulated tenancy
- Long-term asset in a supply-constrained market
- Potential capital uplift when vacant possession is achieved
A Law 887 property can be an attractive long-term investment if you are comfortable holding the asset for an indeterminate period and do not require immediate occupation or renovation. The discount at purchase can be substantial, and the controlled rent provides a steady, if modest, income in the interim.
How does Law 887 affect price?
| Scenario | Typical price vs free-sector |
|---|---|
| First-generation sitting tenant in place | Approx. 30–40% below market |
| Second-generation (inherited) tenant in place | Approx. 20–35% below market |
| Tenant is elderly; natural vacation anticipated | Approx. 15–25% below market |
| Vacant possession now available (law lapsed) | At or near full market value |
Discounts are indicative only and vary by building, district, tenant circumstances, and negotiation. Always obtain professional advice before purchase.
Buyer checklist for Law 887 properties
Frequently asked questions
What is Monaco Law 887?
Monaco Law 887 is a rent-control law that grants residential tenants in Monaco the right to remain in their property. The law restricts an owner's ability to recover vacant possession, and the occupancy right can be inherited by a qualifying close family member of the sitting tenant.
Can a Law 887 property be sold?
Yes, a Law 887 property can be sold. However, the sale transfers subject to the existing tenancy. The buyer acquires the property with the sitting tenant in place and cannot require the tenant to vacate simply because of the change in ownership.
How much cheaper is a Law 887 property?
Law 887 properties typically sell at a discount of 20 to 40 per cent compared with a free-sector equivalent in the same building or district. The discount reflects the uncertainty around vacant possession and the reduced flexibility for the buyer.
Who qualifies as an heir under Law 887?
The hereditary occupancy right under Law 887 can pass to a close family member of the sitting tenant — typically a spouse, civil partner, or direct descendant — provided they were habitually resident in the property at the time of the tenant's death.
Can a Law 887 property be rented?
Law 887 properties can be rented, but the controlled rent level is typically below market rate. Owners are not free to set the rent at whatever the market will bear, which is a further factor that affects the investment return and therefore the capital value.
Is Law 887 the same as Law 1.235?
No. Law 887 and Law 1.235 are separate pieces of Monegasque legislation, both providing tenant protections but with different scope and application. Law 1.235, subsequently amended by Law 1.291, extended rent-control protections to a broader category of residential tenancies.
Related legislation: Law 1.235
Law 1.235, subsequently amended by Law 1.291, extended rent-control protections to a broader range of residential tenancies in Monaco. If you are looking at properties that reference Law 1.235, our dedicated guide covers the key differences.
Monaco Law 1.235 guideThis guide is for general information only. Monaco property law is complex and circumstances vary. Always obtain independent legal advice from a Monegasque notary or qualified lawyer before making a purchasing decision.