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Exclusive Landlord Rights in France: Know Your Legal Position

Recent legal changes in France have significantly impacted the rights and responsibilities of landlords, including updated rent control measures, streamlined eviction processes, and stricter energy efficiency requirements. Our brief overview covers these important modifications to help landlords navigate their legal obligations.
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Landlords’ rights in France are determined by a mix of statutory laws and common practices that aim to strike a balance between the needs of both landlords and tenants, all while ensuring fairness in rental contracts.

Section 1: General Rights of Landlords in France

1. Choosing Tenants

As long as they follow the legislation regarding nondiscrimination, landlords are free to choose who their renters are. They can scan potential tenants based on standards like references, creditworthiness, and rent-paying capacity.

While it could be thrilling to find your first tenant, it’s crucial to ensure that they, as well as every other tenant you rent to, fulfill the minimal requirements you’ve set. Landlords usually ask prospective tenants to submit a rental dossier.

Likewise, landlords frequently need proof of income, such as pay slips and tax returns. Verifying information by completing a tenant background check can be a crucial step in the process. Speaking of which, don’t forget to keep local and state rules in mind when screening tenants in France.

This generally means you cannot discriminate against or favor a potential tenant based on age, family situation, gender, race, religion, national origin, sexual orientation, or handicap in your screening criteria.

2. Rental Income

Landlords are entitled to timely payment of the rent that was agreed upon.
Generally speaking, a prospective tenant and the landlord can freely decide on the rent amount for a new tenancy.  Nevertheless, if the property is the tenant’s primary residence, there are limitations on rate increases for newly leased apartments in France’s major cities.

Setting the right rent price means more than trying to make a profit. First, you cannot estimate the rent price of an apartment instantly; you must actively research it by Calculating Your Apartment Rent in France.

So take your time for the estimation process from the start, and do not rush.

One way is to contact a few local estate agents who are happy to provide this service for free.

Another option is to contact a local notaire who is well-versed in the area’s property prices and can provide an estimation at no charge.

You can also conduct your own research by checking property prices online and consulting the public land registry (cadastre).

3. Security deposit

Landlords may ask for a security deposit at the beginning of the rental.

It is standard practice for a landlord to ask for a rental/damage deposit or dépôt de garantie from a new tenant, which is refundable at the end of the tenancy.

Yet, the deposit is not obligatory, and a landlord cannot insist on one if the rent is payable more than two months in advance.

The amount of the deposit is, in part, regulated by the law: it is one month’s rent for unfurnished properties and two months’ rent for furnished flats.

4. Lease Agreement Enforcement

Landlords can enforce lease conditions as long as they comply with French law. This covers clauses about pets, subletting, and property modifications. The rental contract covers all aspects, such as the length of a lease, landlords’ and tenants’ responsibilities and entitlements, clauses regarding rent and security deposit, and penalties for any breaches of the agreement.

Discover more about the terms, clauses, and different lease options to find the one that best suits your needs. 

5. Modification of Rent 

Subject to legal restrictions and regional caps, landlords can increase rent annually based on indices published by the government, typically linked to the cost of living index.

While some landlords choose not to increase rents, others may do so. And it’s normal as long as it falls within the current year’s index amount.

Similarly, remember that some rental agreements may include an automatic rent increase for multi-year leases.

Setting the right rent price for your investment rental property means more than trying to make a profit. First, understand that you cannot estimate the rent price of an apartment instantly; you must actively research it.

Once you set the rent and sign a lease, specific rules regulate how and when you can increase the rent. You cannot increase the rent if the lease does not include a particular clause.

A landlord can increase the rental once a year, provided the tenancy agreement allows it.

Missing such a clause means you cannot raise the rent, whether the property is furnished or not. Additionally, regulations restrict rent increases for properties with poor energy efficiency ratings in certain high-stress housing areas.

Nevertheless, the rent increase cannot be higher than the previous letting, adjusted by the inflationary increase in the rental index—the Indice de Référence des Loyers (IRL).

https://hub.wunderflats.com/how-to-legally-increase-rent-in-france

6. Eviction

The eviction process is strictly regulated to protect tenant rights. Landlords can only ask tenants to leave for reasons like needing the space themselves (reclaiming for personal use), wanting to sell the property, or if the tenant violates the lease agreement (like not paying rent).

A recent law in France has simplified the process for landlords dealing with tenants who fail to pay rent. When signing an agreement, the landlord must now include an “automatic termination clause.” This clause allows the landlord to terminate the lease without court intervention if the tenant fails to pay rent.

Don’t hesitate to refer to our digest on evictions, ways of reclaiming unpaid rent, and procedures regarding notice periods for French landlords for more comprehensive advice.

7. Tax Benefits

Landlords can benefit from various tax deductions related to property ownership. They can deduct expenses from their taxes, such as property taxes, maintenance fees, and interest paid on loans used to buy or renovate real estate. Professional landlords enjoy tax advantages. For instance, they can offset losses against their total income, not just from furnished rentals. Also, they could have an exemption from wealth tax on rental properties and concessions on capital gains tax.

Please consult our guide on Tax on Rental Income in France for more specific directions.

7. Subletting

Tenants can sublet their apartments in France by receiving written permission from the landlord. When subletting, the tenant must send an official letter to the landlord stating the reason for subletting, information about the flat, and duration. For that matter, subletting without the landlord’s approval leads to termination of the rental agreement and massive fines.

8. Hiring a property manager

This resource is ideal for landlords looking to manage their properties effectively from afar. Landlord managers are responsible for minimizing property owners’ risks. To do this, they handle various tasks, from conducting market research to lease negotiations and beyond. After all, this ensures peace of mind, knowing someone is taking care of your property when you’re away. You’ll always have someone to contact for assistance and prompt issue resolution, even if you’re thousands of miles away.

Furthermore, the landlord’s manager handles tasks related to managing the property, such as collecting rent, overseeing maintenance and repairs, and addressing tenant concerns. 

Section 2: Recent legal changes and their implications for landlords

Recent legal changes in France have significantly impacted landlord rights and responsibilities. Here’s an overview of some recent legal changes and their implications for landlords in France:

1. Alur Law (Loi pour l’Accès au Logement et un Urbanisme Rénové)

Implemented in 2014, this legislation established rules to oversee rent increases, support tenant protections, and improve the market’s transparency. It also involves guidelines for setting rent limits in areas with demand and establishing a universal rental guarantee system.

2. Elan Law (Loi Evolution du Logement, de l’Aménagement et du Numérique)

This law, enacted in 2018, was designed to streamline and update housing regulations. It includes provisions for faster eviction processes in case of unpaid rent, encouraging shared housing, and introducing new types of housing agreements, like mobility leases (bail mobilité).

3. Energy Efficiency Requirements

Recent regulation updates have increased the energy efficiency requirements in rental properties. For instance, properties that meet the requirements for “acceptable housing” must have a class F EPC by January 1, 2025, a class E EPC by 2028, and a class D EPC by 2034. Eventually, rental buildings in EPC classes E through G will have to adhere to the new energy efficiency requirements or will no longer be on the rental market.

4. Declaration d’Occupation

As of 2023, all property owners must complete a new French tax declaration called the Declaration d’Occupation, which details the occupancy status of their property or properties. All real estate owners in France, including those who own second homes or are not residents and are generally exempt from filing a French tax return, must make this one-time declaration.

You must fill out this form if you own any type of property in France, regardless of whether you reside there, use it as a second home, rent it out, or pay taxes there. Whether you pay Taxe d’Habitation or not, you must complete it.

You can do this online by logging into your personal space on the impots.gouv.fr website. 

However, if you’re unsure, it’s best to inquire with your local tax office.

Take advantage of our expert rental service to find the perfect tenants for your furnished flat! Rent out now via Wunderflats!

Please note: This article does not constitute legal advice – the information on this page has been prepared solely for your information. As we are not a law firm and act as a platform, we can and may share our estimations, but we cannot give you legal advice for your individual further proceedings.

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