Monegasque legislation relating to commercial leases is governed by Act No. 490 of 24 November 1948, which has been amended in numerous aspects by Act No. 1287 of 15 July 2004, especially with regard to indemnities for eviction, the pre-emptive right of the lessee in the event of a sale of the property and the pre-emptive right of the lessor in the event of an assignment of the business.
Under Article 1 of this Act, in order to have the benefit of commercial property it is necessary to carry on a business in the leased property for at least three consecutive years.
This is public policy Law. Any clause inserted into an agreement that contradicts its provisions is null and void.
In determining whether or not a commercial lease exists, caselaw does not hold the Court to be bound by the terminology used by the parties in their agreement. On the contrary, the trial judge seeks to determine the presence of an actual business or usage carried on in the leased premises for a period of three consecutive years, in order to determine the legal regime applicable.
A commercial lease is renewable on its expiry. Refusal to renew a lease is strictly regulated by Articles 4 et seq of the Law.
Notwithstanding the indexing clause that may be inserted into the lease, the rent can be revised if it is not commensurate with the fair rental value of the premises in accordance with the criteria set out in Article 6. The rent may be revised either at the time of renewal of the lease under the terms of Articles 4 et seq of the Law, or during the course of the lease under the terms of Article 21 provided that at least three years have expired since the date of the last rent determination.
The Arbitration Commission for Commercial Leases has sole jurisdiction over the fixing of rents.