The Long-term Lease, A Real Property Right Or Illusion?

The Law of 22 October 2008 called the Housing Pact (Pacte Logement) defines a long-term lease (bail emphytéotique) as "a real property right consisting of having the full enjoyment of a building belonging to another, by means of payment of a fee to be agreed between the owner and the lessee."

"The lessee exercises all rights attached to the ownership of the building without under any circumstances diminishing its value." In particular, "the lessee has the ability to transfer his/her right, to hypothecate it and to encumber the building with easements for the duration of the long-term lease."

In Luxembourg, long-term leases regularly include limitations on those rights, particularly the lessee's obligation to occupy the property himself/herself.