The government knows that certain real estate agents have charged hidden fees when leasing flats to unsuspecting renters in the past, Housing Minister Claude Meisch has acknowledged.

“The government is aware that [when renting out flats], some real estate agencies charge fees that are listed under the headings ‘membership fees’, ‘service fees’ or similar indiscriminate charges,” Meisch said last week in response to a written parliamentary question from the Pirate Party MP Marc Goergen.

Meisch did not provide any figures on how many cases had been recorded and when the complaints were lodged.

“These practices have been brought to the attention of the competent services, among others, through reports from affected parties,” Meisch stated. “The government has not been aware of any such cases recently, but if more such problems are reported by affected parties in the future, the government will analyse what steps are necessary to ensure that the agencies comply with the legal framework.”

While there are no legal restrictions on the commission rates that real estate agencies can charge renters for placing them in a property, fees need to be “reasonable” and be clearly spelled out in advance, Meisch said last year. Common industry practice in Luxembourg is to charge tenants about one month’s rent.

Meisch told Goergen last week that “the terminological designation is not decisive” but that all “activity of searching, brokering, presenting or concluding a rental agreement is to be qualified as a commission or brokerage fee,” meaning tenants should only pay one single commission for their rental search.

Landlords and tenants can request separate services that do not fall under the commission, with move-in and move-out inspections being the most common. Agents can charge separate fees for these services, Meisch said.

Tenants who suspect agencies or agents are illicitly trying to charge additional commission fees can file a complaint with the Consumer Protection Directorate, “or, if necessary, the competent courts,” the housing minister added.

Luxembourg law does not provide for administrative fines against agencies that charge hidden fees, but Meisch said agencies could be forced to return the “amounts unlawfully collected” and face “professional consequences” from their industry regulatory body.