ENCADREMENT DES LOYERS
Table of contents
Rent control consists of complying with laws and regulations that set limits on rents and the level of increases that can be applied to them.
This concerns first leases, changes of tenants and lease renewals. Rent control only applies to principal residences.
To comply with the rent control, the rent charged (excluding charges) must be between the reference rent plus 20% and the reference rent minus 30%.
This does not apply to second homes, low-rent housing or seasonal rentals.
1. What is a principal residence ?
According to the law of 6 July 1989 as "housing occupied for at least eight months a year, except professional obligation, health reason or force majeure, either by the lessee or his spouse, or by a dependent within the meaning of the Construction and Housing Code." (Article 2).
In the principal residence contract, the rent and charges are separated. It is essential to ask the landlord to provide the statement of the expense accounts.
Since 2019, rents are regulated in Paris (Alur law) for main residences.
2. How is the median reference rent determined?
To avoid the imperfections of the law of 48, the ELAN law through article 140 specifies that the maximum value is 120% of the average rent recorded for a type of property and a given area.
The median reference rent corresponding to the medians (average) of samples of contracts defined according to:
- The area: a division into administrative districts (80 districts in Paris)
- Year of construction: are defined as milestones 1946, 1970, 1990
- The type of rental: empty or furnished
- The number of rooms
The framing values also take into account furnished rentals, for which the rent control applies when it comes to furnished principal residence on a one-year lease.
The framework also applies to shared tenancies (single lease or individual lease).
Namely: Maximum rent = increased reference rent = median reference rent X 1.2
3. What is the exceptional rent supplement?
It is possible to exceed the maximum rent by defining an exceptional rent supplement.
"A rent supplement may be applied to the basic rent as fixed in A of this III for dwellings with characteristics of location or comfort justifying it, by comparison with dwellings of the same category located in the same geographical area." (Article 140 of the ELAN Act)
The additional rent must be justified by an exceptional element compared to the property in the same area with the same characteristics of number of rooms, date of construction or furnished or empty rental.
> It is possible to request an exceptional rent supplement for : terrace, garden, ceiling height of more than 3.30 meters, parking, exceptional view (Eiffel Tower, Notre Dame), luxurious equipment such as sauna, cinema.
> It is not possible to apply an additional rent for: thermal strainer, vis-à-vis less than 10 meters, poor orientation, brightness, exposure, standard cellar, parquet and moldings and small balcony.
4. Can there be any risks if I am exceeded?
In the event of an unjustified exceptional rent supplement – or a rent exceeding the increased reference rent without any justification – the landlord takes the risk of seeing the value disputed by the tenant during the lease.
In the event of non-compliance with the provisions of the framework (indication of the reference rent increased in the lease, justification of an exceptional rent supplement in case of exceedance), fines can go up to €5,000.00 for a natural person and €15,000.00 for a legal resident.
5. What are the possible remedies?
If the rent is higher than the increased reference rent, the rent reduction must be requested from the landlord at least 5 months before the renewal date of the lease (excluding any additional rent).
If the rent is lower than the reduced reference rent, the landlord may offer the tenant a new price for the rent at least 6 months before the renewal date of the lease.
In case of a disagreement, both the tenant and the owner may refer the matter to the departmental conciliation commission. The ELAN Law has provided a framework for negotiation as long as the request was made 5 months before renewal.
Find more information on the website of the City of Paris.
6. In which areas does the rent control apply?
- Paris (since July 1, 2019)
- Lille (since March 1, 2020)
- Aubervilliers, Epinay-sur-Seine, L'Île-Saint-Denis, La Courneuve, Pierrefitte, Saint-Denis, Saint-Ouen, Stains and Villetaneuse (since June 1, 2021)
- Lyon (since November 1, 2021)
- Bagnolet, Bobigny, Bondy, Le Pré-Saint-Gervais, Les Lilas, Montreuil, Noisy-le-Sec, Pantin, Romainville (since December 1, 2021)
- Montpellier (since July 1, 2022)
- Bordeaux (since July 15, 2022)
7. How to avoid rent controls?
To avoid rent control, it is possible to:
- Propose a Civil Code Lease
- Rent as a Second Residence
- Rent as Corporate Housing
Indeed, in a secondary residence, there is no rent control (civil code lease). The Civil Code lease corresponds to people who wish to rent a second home, a pied-à-terre, as well as companies with corporate housing for their employees.
Important Note: The mobility lease is subject to rent control when it comes to the tenant's main residence, as indicated in this ANIL sheet.
8. The mobility lease and rent control
The mobility lease is subject to rent control when it comes to the tenant's main residence, as indicated in this ANIL sheet.
Thus, so that the mobility lease is not affected by the rent control (like any other rental contract), the dwelling must not be the tenant's main residence, it must be his secondary residence.
Indeed, the rent control does not apply if it is the tenant's second home.