Rent control 2023: Paris "tense” area
In France, the rent control law limits the rent a residential lease property owner can charge. This rule applies to high-demand areas ("zone tendue" in French), specifically in municipalities such as Paris, Lille, Montpellier, and Bordeaux.
Owners of furnished or unfurnished apartments for rent are therefore bound by the Rent Framework, and the rent will have be calculated on the basis of three references per m2:
- the reference rent
- the minus rent (corresponds to the reference rent - 30%)
- the increased rent (corresponds to the reference rent + 20%).
How to estimate your reference rent in Paris?
To calculate the regulated rent in Paris, the French Public Service has created an online platform to estimate the reference rent of your private rented housing. To do so, you will have to enter your region, the number of main rooms, the construction period of the building, and the type of rental (furnished or unfurnished). Then finish by selecting the desired period and entering the address.
Which rental accommodations are affected by rent control?
The rent control rule does not apply to accommodations that have never been rented before, which is the first rental.
In France, if the rental property is being rented for the first time, the lessor can request the rent amount as they wish and is authorized to revise the rent amount once a year according to the rent review clause indicated in the lease agreement.
The rental accommodation concerned should meet the following two conditions:
- Unfurnished or furnished accommodation rented as a primary residence
- Use the rental accommodation for residential or mixed professional use (the tenants use the accommodation as their main residence and professional purposes).
Landlords: How to overcome rent control in France?
Several situations make it possible for landlords to escape from the rent control limit. For example,
1. Rental property excluded from the rent control are the following:
- seasonal rental
- commercial lease
- rental exclusively for professional use
2. It is possible to apply a rent supplement (complément de loyer) as long as it can be justified. Thus, a rental apartment with a reference rent of €3,000 can be rented out at €3,650 if its comfort characteristics allow it.
Here are some examples of rent supplements:
Balcony, view of the Eiffel Tower, air conditioning, full double-glazed windows, wine cellar, video projector, marble floors, sauna, modern bathrooms and fully equipped kitchen, high-quality bedding, linens included, private garden, terrace, etc.
What are the rental publication constraints in France?
The rental listing in France must mention the following components whether you are a private owner or a real estate agency.
- Basic rent (loyer de base)
- Recoverable rental charges (charges locatives)
- Rent supplement (complément de loyer)
- Reference rent: (loyer de référence)
- Increased reference rent - the base rent not to be exceeded (loyer de référence majoré).
What is the basic rent?
The basic rent (loyer de base) is the rent amount without any extra rental charges or rent supplement.
What is the reference rent?
The reference rent is the regulated rent price per square meter in the rent control area.
What is the increased reference rent?
The increased reference rent is the basic rent amount that can not be exceeded for the lease signed under the Alur law. It is fixed depending on the rent levels observed by the local French Rent Observatory Department. Therefore, it cannot be 20% higher than the reference rent.
What is the rent supplement?
For a Code Civil lease (secondary residence lease or company lease), the landlord has the right to charge the rent supplement if the following two criteria are met:
- The rental accommodation possesses unique features in terms of location or comfort,
- The basic rent equals the increased reference rent.
However, for any leases signed after August 18, 2022, the rent supplement will not be allowed if the apartment has certain features, such as
- inadequate electrical installation,
- poor exposure to the main room,
- signs of moisture on walls
- DPE (Energy Performance Diagnosis) classes for F or G, etc.
What consequences if the landlord does not respect the rent control?
For an individual, the penalty amount may extend up to 5,000 euros. On the other hand, the legal entities such as real estate agencies, SCPIs (Société civile de placement immobilier), and rental platforms, the penalty may increase to 15,000 euros.
For any lease signed under the Alur law, suppose the landlord does not respect the French rent control regulation. In that case, the French police will provide the non-compliant landlord a two-month grace period to rectify the lease agreement and reimburse any excess rent payments to their tenant. However, if the landlord fails to comply within two months of receiving the formal notice via letter, the prefecture may give a penalty.
Editor : Siyi Chen
Credit Photo @Anh Q Tran
Sources: Service Public
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