The landlord/tenant dilemma arises when the interests of landlords and tenants misalign and is one of the greatest barriers hindering the development of sustainable renovation of residential buildings in Europe. The aim of this research is to investigate how regulatory changes and contractual solutions can help solve the landlord/tenant dilemma in relation to sustainable renovation of residential buildings, and how the general awareness of sustainable renovation can be increased. Particular focus is on whether tools like energy performance contracting and energy labeling can help solve the landlord/tenant dilemma. The research was done in relation to the specific situation in Denmark, but theory, information and experiences from other countries were included. The results show that there are plenty of opportunities to overcome the landlord/tenant dilemma, but principal/agent problems can only be overcome with a package solution. In the Danish national context the package solution must consist of legislative changes, financial incentives and better dissemination of information. Therefore, an array of different tools must be integrated and used in cooperation to overcome the dilemma.