The suspension of rent is one of the most sensitive issues in commercial lease law.
Can a tenant stop paying all or part of their rent when they believe that the use of the premises is no longer consistent with what was agreed?
A recent judgment from the Justice of the Peace Court of Luxembourg (5 June 2025, No. 1929/25) provides important clarification on the conditions under which such a suspension may – or may not – be permitted under Luxembourg law.
1. Rent suspension under Luxembourg law: a regulated mechanism
In Luxembourg commercial lease law, the payment of rent constitutes the tenant’s primary obligation.
However, a tenant may rely on the defence of non-performance (exception d’inexécution) provided for under the Civil Code if the landlord fails to fulfil their own obligations, in particular:
the obligation to deliver the premises,
the obligation to maintain the property,
the obligation to guarantee peaceful enjoyment of the premises.
That said, this mechanism is neither automatic nor discretionary.
Luxembourg case law consistently recalls that:
the alleged breach must be genuine,
it must be sufficiently serious,
and the tenant’s reaction must be proportionate to the situation.
In other words, a simple inconvenience is not enough to justify the suspension of rent.
2. Loss of enjoyment or mere inconvenience?
In the case decided on 5 June 2025, a commercial tenant had partially suspended payment of rent on the grounds that certain elements necessary for operating the premises were no longer accessible.
The tenant relied on:
the defence of non-performance,
and subsequently the loss of the leased property to justify termination of the lease.
The Court rejected these arguments.
Why?
Because the overall use of the premises had not been eliminated.
Alternative arrangements had been implemented and formalised contractually.
The judge therefore reaffirmed a central principle of Luxembourg lease law:
rent suspension can only be justified if the leased property becomes unfit for its agreed use.
A disturbance, even a genuine one, is insufficient if the tenant can still operate the business.
3. The decisive importance of contractual clauses
The decision also highlights a point that is often underestimated: the drafting of the lease agreement.
The contract contained a clause allowing certain elements relating to the premises to be modified if the organisation of the site required it.
This clause played a decisive role in the Court’s assessment of the dispute.
In practice, the validity of a rent suspension will depend largely on:
the precise wording of the commercial lease,
the scope of the landlord’s obligations,
the flexibility clauses included in the contract,
and the operational criteria that have been contractually defined.
The initial drafting of the lease therefore has a significant impact on potential litigation risks.
4. Key takeaways for real estate stakeholders in Luxembourg
For landlords
Clear drafting of flexibility clauses and properly documented management of adjustments made during the execution of the lease help secure the contractual balance.
Formalisation (amendments, traceability, and access conditions) is essential.
For tenants
Elements that are truly essential to the operation of the business (accessibility, specific equipment, safety, technical characteristics) should be expressly incorporated into the lease agreement.
Otherwise, it may be difficult to later invoke a sufficiently serious breach.
For developers and project owners
In a property development that evolves over time, contractually anticipating potential changes can significantly reduce rental risks and future disputes.
5. A requirement of proportionality in commercial lease disputes
This decision confirms a consistent trend in Luxembourg case law:
the suspension of rent or the early termination of a commercial lease must be strictly proportionate to the alleged breach.
Commercial lease disputes in Luxembourg therefore depend not only on legal analysis but also on the initial contractual balance.
FAQ – Commercial leases in Luxembourg
Yes, but only if the landlord seriously breaches their obligations and the tenant’s enjoyment of the premises is genuinely compromised. The measure must remain proportionate.
It is the right of one party to suspend the performance of its obligation when the other party fails to perform theirs. In Luxembourg commercial lease law, its application is strictly regulated.
No. The seriousness of the breach is assessed by the court on a case-by-case basis.
Our real estate law practice in Luxembourg
Our Real Estate team advises landlords, tenants, investors and developers on:
negotiating and drafting commercial leases in Luxembourg,
managing contractual risks,
handling lease-related disputes,
structuring complex real estate transactions,
…
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