Landlords

Real estate in France – changes to French property law

French property law has undergone several changes and amendments in the last few years. For the example, The Alur Law brought in in 2014 specified changes as varied as a rent cap, standardised rental contracts and what exactly constitutes furnished. French property law, like law in general! – can often be difficult to navigate. We’ve put together a short summary for those involved in real estate in France, both landlord and tenants, to keep you up to speed,

Alur Law – what does it involve?

  • Rent cap: landlords cannot raise their rent by more than 20% of the previous rental agreement nor can they reduce it by more than 30%. Due to be implemented summer 2015
  • Universal rent warranty: protects landlords from unpaid rent. This encourages landlords to offer tenancies to those on lower incomes (previously it made more sense offer tenancies to wealthier customers)
  • Contracts: to minimise conflicts between landlord and tenant, contracts and inventories will now be regulated and made consistent. Takes effect 01/08/2015
  • Cooperative ownership of properties
  • More power to groups of councils to determine housing plans
  • Extends winter truce during which landlords cannot evict tenants

French property law change – who’s affected?

Affects:

  • Those who rent out additional homes short-term during summer and winter
  • Property owners in large cities with more than 200,000 residents
  • Property owners in towns with more than 50,000 residents and with housing shortages

Doesn’t affect:

Those who rent out or house-exchange their primary residence

Why the changes? Short-term rentals

Real estate in France has been affected by the increase in short-term rentals strangulating the wider rental market and inflating prices. In Paris, 20,000 holiday properties are vacant at certain points throughout the year, reducing the number of homes available for mid- to long-term rental. There may also be a financial justification: are landlords or tenants who sublet paying the correct tax on their earnings? It’s not only real estate in France that has been affected. Changes like those made to French property law have also been enacted in Germany and the Netherlands.

Reactions?

42% of 948 estate agencies surveyed in 40 of 101 French departments don’t respect the Alur law.

The Alur law was amended in 2015. Clarifications can be found here (French). One of the amendments to the law concerns what exactly constitutes ‘furnished’. The law was enacted in 1989,  was clarified in 2014 and this year (2015) has been made explicit. Check out the infographic below ensure the flat you are letting or renting can be legally described as ‘furnished’.

 

Header image: Steve Cadman under Flickr creative commons license. Changes made.

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