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In Luxembourg: What tenants need to know in the face of soaring energy prices

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In LuxembourgWhat Tenants Need to Know About Soaring Energy Prices

LUXEMBOURG – To avoid any unpleasant surprises on receipt of the next statement of rental charges due to the dizzying rise in energy prices, owners and tenants should take the lead.

In order to avoid unpleasant surprises, landlords and tenants should take the lead in terms of rental charges.

Oil and gas prices have exploded in recent months. Energy Minister Claude Turmes confirmed on Tuesday a drastic increase in the price of gas at energy supplier Enovos. What makes it tremble more than one before the next count of rental charges. Even if, for most tenant residents, it will not intervene until next year. While landlords want to avoid having to submit bills that are too high, tenants worry about down payments and arrears of charges.

But what about monthly advances? Can owners just increase them? “Yes, in writing”, explains Navid Poushanchi, lawyer at the Luxembourg Union of New Consumers ASBL (ULC). He specifies that in Luxembourg, the percentage of the increase in the advances of charges is not capped. The terms are however governed by the Residential Tenancies Act 2006. Thus, the increase must be established objectively and correspond to the real situation; increases in advances of fictitious or unfounded charges as a “gift” to the lessor are not permitted and would appear anyway on the following statement. Also, retroactive increases are not allowed.

Benevolence rather than litigation

What happens if the tenant prefers to put money aside himself rather than paying higher monthly charge advances? This is in principle possible “if the lessor agrees”, specifies Navid Poushanchi who recommends flexibility in the interest of both parties. It is, for example, possible to find a happy medium by paying a part of the higher advances in advance and saving a part yourself. By reducing the advances, however, the tenant takes a certain risk. Indeed, if he is unable to pay an arrears of charges, the lessor can, in the worst case, put an end to the lease contract. “If the tenant does not pay the owner, it would be a serious fault in rental law, which would justify the termination of the lease”, explains the lawyer. The owner would, by the way, not have the right to simply turn off the heating.

Even in the absence of payment, the ULC lawyer pleads for benevolence. For landlords to recover their money for gas and fuel oil and for tenants to keep their accommodation, it is for example possible to agree on a payment in instalments. “As a mediation service, our primary objective is to avoid litigation in court,” he concludes.

How much is all this going to cost me?

The two largest gas suppliers in Luxembourg have announced that they will increase their prices by 80 to 90% in October. According to the Statec 2021 household budget survey, the average surface area of ​​a rental accommodation in Luxembourg is 85 m². Assuming consumption of 11,900 kWh per year, the calculator of the Luxembourg Regulatory Institute (ILR) indicates that SUDenergie and Enovos have so far charged between 1,200 and 1,400 euros per year for gas, depending on the tariff chosen. . A price increase of 80% would increase this to between 2,160 and 2,520 euros per year.

Where oil heating is used, the price increase is already clearly felt by consumers. According to Statec data, fuel oil cost 68% more in July than in December 2021.

Finally, the price of electricity is closely linked to the price of gas. Here too, the Encevo group, of which Enovos is a part, announced a price increase of 35% from January.