Pre-emption rights in Monaco: when can they apply to a property sale?
When an owner decides to sell an apartment or a building in Monaco, signing an agreement with a buyer does not always mean that the buyer will necessarily become the owner.
In certain circumstances provided for by Monaco law, the State, a residential tenant or, in a commercial context, the tenant of premises may benefit from a right of pre-emption. There is also a specific mechanism allowing the tax authorities to intervene when they consider a declared price to be insufficient.
For sellers and buyers alike, it is therefore important to identify these situations early enough. Pre-emption is not a general rule applying to every property sale in Monaco: it stems from specific legislation and depends in particular on the building’s construction date, the legal regime governing the premises, their occupancy and the nature of the transaction.
What is a right of pre-emption?
A right of pre-emption allows its beneficiary to take the place of the intended buyer, subject to the conditions laid down by law.
In other words, the owner remains free to decide whether to sell the property. However, when a right of pre-emption applies, the owner must follow a procedure allowing the beneficiary to decide whether to exercise priority to purchase.
In Monaco, it is particularly important to distinguish between:
- the State’s right of pre-emption under Law No. 1.235;
- the tenant’s right of pre-emption in certain sales falling under that same law;
- certain rights applicable to commercial premises;
- a specific mechanism benefiting the Treasury when the declared price is considered insufficient under the conditions laid down by law.
1. The main residential case: older housing governed by Law No. 1.235
Law No. 1.235 of 28 December 2000 concerns certain residential premises built or completed before 1 September 1947. Article 38 establishes a pre-emption mechanism for certain transactions involving premises within its scope.
The legislation covers, in particular, certain voluntary transfers for consideration and certain contributions to companies. This is therefore a point to check when an apartment is located in an older building in Monaco.
However, the apparent age of the building alone is not enough to determine the applicable regime. The law provides for exclusions, and the legal status of the unit must be confirmed. The notary handling the transaction is the natural point of contact for this check.
2. A declaration of intent must be sent to the Minister of State
Where a transaction falls within the mechanism under Article 38, a declaration of intent must be sent to the Minister of State in the form prescribed by the legislation.
This declaration states, in particular, the price and terms of the proposed transaction. The law attaches particular importance to this formality and provides for consequences if the procedure is not followed.
The declaration constitutes an offer to sell for the period prescribed by law. The Minister of State may then notify the State’s decision to acquire the property on the declared terms.
3. How long does the State have to respond?
Article 38 provides a period of one month from notification of the declaration for the State to exercise its right of pre-emption.
If the State decides to purchase, the transaction proceeds in accordance with the procedure and deadlines laid down by the legislation.
If the State does not exercise its right, a second question may arise where the property is let: does the tenant have a right of pre-emption of their own?
4. In some cases, the tenant may benefit from a right of pre-emption
Where the conditions laid down by Law No. 1.235 are met, and after the stage concerning the State, the residential tenant may benefit from a right of pre-emption.
The owner must then notify the tenant of the price and terms of the sale in the form prescribed by the legislation.
The offer made to the tenant is irrevocable during the statutory period. The tenant may decide to acquire the property on the terms communicated to them.
The State comes before the tenant
This is an important point in understanding the procedure: under the Article 38 mechanism, the possibility of pre-emption by the State is considered before that of the tenant.
5. The tenant’s financing
The law also addresses the situation in which a tenant wishing to exercise their right needs financing.
Under the conditions set out in the legislation, the exercise of that right may be subject to a condition precedent relating to obtaining one or more loans. The applicable deadlines must then be strictly observed.
In an actual transaction, the notary must check the notification, acceptance and financing dates to ensure that the procedure is properly followed.
6. What happens if neither the State nor the tenant exercises pre-emption?
The owner may then proceed with the sale to the intended third party, subject to compliance with the conditions and deadlines arising from the procedure.
If the sale is ultimately not completed within the prescribed period, or its terms change substantially, a further check of the procedure may be necessary before concluding the transaction.
It is therefore inadvisable to treat a pre-emption declaration as a formality that remains valid indefinitely for all future sales of the property.
7. Are all older properties affected?
No. The law provides for several exclusions, and the unit concerned and its legal history must be examined.
Article 38 provides, in particular, for exceptions for certain transactions, including transfers of undivided ownership interests between co-owners and certain sales involving only ancillary premises such as cellars, parking spaces or storage rooms.
The construction date of a building should therefore not automatically be taken to mean that every sale within it is subject to the same right of pre-emption.
8. The State’s right of pre-emption is subject to legal constraints
Monaco’s courts have had occasion to review the exercise of the State’s right of pre-emption under Law No. 1.235.
The Supreme Court has notably examined the justification for a pre-emption decision in terms of the public interest. This is a reminder that, although legislation gives the State pre-emption powers in certain cases, their exercise remains subject to judicial review.
9. What about an apartment governed by Law No. 887?
Law No. 887 and Law No. 1.235 establish two distinct regimes. The pre-emption procedure under Article 38 of Law No. 1.235 should therefore not automatically be applied to an apartment governed by Law No. 887.
Before a sale, the precise status of the property must be established and the applicable formalities confirmed by the notary.
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10. A right of pre-emption also applies to certain commercial premises
Monaco’s commercial lease legislation provides, in certain situations, for a right of pre-emption benefiting the tenant of premises used for commercial, industrial or craft activities when the owner sells the leased premises.
This regime has its own conditions and exceptions. It must not be confused with the regime applicable to housing governed by Law No. 1.235.
A transaction involving a building containing several types of premises may therefore require particularly careful analysis of the applicable rights.
11. The specific mechanism where a declared price is considered insufficient
Monaco law also provides for a very different mechanism where the authorities consider the price declared for a property transfer to be insufficient.
Under the conditions laid down by Law No. 580 of 29 July 1953, the Department of Tax Services may exercise, for the benefit of the Princely Treasury, a right of pre-emption based on the declared price, in accordance with the procedures laid down by the applicable legislation.
This mechanism does not serve the same purpose as pre-emption of housing in the protected sector. It concerns, in particular, the accuracy of the value declared for tax purposes.
In practice, sellers and buyers must therefore ensure that the price recorded in the deeds genuinely reflects the terms of the transaction.
12. Why check pre-emption before accepting an offer?
For an owner, identifying the issue only a few days before signing can lead to difficulties and unnecessary delays.
Before marketing an older apartment, it is advisable to establish:
- the building’s construction or completion date;
- the legal regime governing the property;
- whether it is vacant or let;
- the nature of the lease;
- any rights the tenant may have;
- the precise nature of the units being sold;
- whether the transaction includes commercial premises;
- the proposed structure of the transaction.
These details also help ensure that the offer or preliminary agreement is correctly drafted and includes the necessary reservations or conditions.
13. Does a right of pre-emption affect the apartment’s value?
Not necessarily. A right of pre-emption is primarily a legal and procedural constraint, rather than a valuation method.
However, the legal regime governing the property may itself affect its value. An apartment in the unrestricted sector, a let apartment and one subject to a specific regime do not necessarily attract the same buyers or offer the same occupancy possibilities.
This is why the valuation of an apartment in Monaco must take its legal regime into account alongside its address, floor area, floor level, view, condition and ancillary spaces.
Frequently asked questions
Can the State pre-empt any apartment sold in Monaco?
No. There is no general right allowing the State to take the buyer’s place in every property sale in the Principality. Each right of pre-emption is based on legislation and specific conditions.
Are all buildings constructed before 1947 automatically affected?
No. The construction date is an initial indicator, but Law No. 1.235 includes exclusions and the exact status of the unit must be checked.
Is a parking space sold on its own subject to the same right of pre-emption?
Article 38 of Law No. 1.235 provides, in particular, an exclusion for certain transfers involving only ancillary premises, including parking spaces, cellars and storage rooms. The legal classification of the transaction must nevertheless be confirmed for the case concerned.
Does pre-emption apply to a transfer between co-owners?
The legislation provides an exclusion for transfers of undivided ownership interests between co-owners.
What is the State’s pre-emption period under Law No. 1.235?
Article 38 provides a period of one month from notification of the declaration of intent.
Thinking of selling an apartment in Monaco?
Before the property goes on the market, Monaco Properties can help you identify its main features, legal regime and market positioning.
We can provide an initial opinion of value based on the information and documents supplied, then arrange a visit to confirm that valuation and prepare the marketing.
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General information article updated in September 2026. Pre-emption rules depend on the property’s circumstances and the proposed transaction. Their application must be confirmed by the notary handling the transaction.
