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Most Important Landlords’ Duties In The French Rental Market

We delve into landlords' responsibilities and legal obligations in the French rental market. You will discover the key preparations required for properties before leasing, learn about contractual and financial duties, and find out how to stay compliant with the latest legal changes.
Photo by Brooke Cagle on Unsplash

Section 1: Legal Framework Governing Landlord Duties

Section 2: Preparing the Property

Section 3: Contractual Obligations

Section 4: Financial Obligations

Section 5: Maintenance and Repairs

Section 6: Updates and Compliance

Section 7: Resources for landlords

Section 8: Case Studies

 

Section 1: Legal Framework Governing Landlord Duties

Overview of French laws relevant to landlords

The Loi Alur (Accès au Logement et à un Urbanisme Rénové) introduced significant changes aimed at regulating the housing market and improving tenant protections. Critical aspects of the law include:

  1. Rent Control
  2. Enhanced Tenant Protections
  3. Diagnostics and Safety
  4. Deposit and Rental Guarantees
  5. Property Management

The Loi Pinel is an amendment to the French Tax Code to encourage private investment in new rental housing. The law offers a tax incentive to landlords who buy new properties and agree to rent them out for 6, 9, or 12 years.

Here are the key features of the Loi Pinel:

Tax Reduction

  1. 12% reduction for a 6-year commitment,
  2. 18% reduction for a 9-year commitment,
  3. 21% reduction for a 12-year commitment.

Eligibility: The properties must be new or thoroughly renovated to meet specific energy and performance criteria.

Rental Conditions: The property must be rented out as a primary residence, and the rent must be capped at an affordable rate to middle-income tenants.

Loi Pinel has been extended several times, most recently until December 2024.

Discover more about Rental Investment Pinel/Duflot Law (tax reduction).

Registration and legal requirements before renting out property

Business Registration

The detailed rules and procedures outlined for landlords in France, especially for non-residents, highlight the complexity of tax and legal considerations in the letting business.

Whether a landlord is considered professional or non-professional, obtaining a Siret number by declaring their activity to the commercial court (Greffe du Tribunal de Commerce) is necessary for tax purposes. This process is essential for administrative and taxation requirements.

Para-hôtelier

To further classify and possibly shift the status towards that of a business operating hotel-like services (para-hôtelier), the landlord must offer at least three of the following services: breakfast, cleaning services, or supplying guests with linens.

However, if these services are provided on a marginal basis to the main letting activity, the owner retains the status of a landlord of furnished accommodation. For example, if cleaning only occurs at guest turnover, linen change is not regular, or welcoming is limited to key handover, the status does not shift to that of a para-hôtelier.

This definition is crucial for understanding the tax implications and regulatory requirements for landlords in France. It distinguishes between simple rental activity and those offering additional services that could be considered running a hospitality business.

Business Registration Number (SIRET Number)

A business registration number, commonly called a SIRET number in France, is a unique identifier assigned to each business entity. This 14-digit number is crucial for all businesses, including landlords of furnished accommodations, as it formalizes the business’s existence under French law and is used in all administrative dealings, especially for tax purposes.

Obtaining a SIRET number involves declaring rental activity to the relevant authorities, typically the local commercial court or the business formalities center.

SIRET registration

You can read more at Permits for Letting Furnished Property in France.

Local Council Registration/Authorisation

Local Council Registration/Authorisation refers to the specific regulatory requirements that landlords must comply with when offering furnished tourist accommodations on a short-term basis. This regulatory framework aims to manage and monitor the short-term rental market, ensuring compliance with local housing policies, safety standards, and tax obligations.

Landlords of “meublés de tourisme” must register with their local council. This process typically involves declaring the property as a short-term rental accommodation, providing details about the property, and obtaining a registration number. You can do so at Déclarer un hébergement de tourisme.

Platforms like Airbnb and other short-term rental services are often bound by reporting procedures to local authorities. These procedures help municipalities monitor and regulate the short-term rental market.

Section 2: Preparing the Property

Standards and conditions required before leasing (safety, health, amenities)

The landlord must give a prospective tenant several documents. A certified professional in real estate assessment conducts a genuine estate evaluation to assess a property’s state, pinpoint risks, and offer impartial details regarding its technical features. These survey reports are collectively known as the dossier de diagnostic technique immobilizer and are attached to the agreement upon signing.

Required diagnostics and certificates (e.g., energy performance, risk exposure)

1. Lead Testing

2. Energy Efficiency (Diagnostic de performance énergétique—DPE)

3. Asbestos Check (Amiante)

4. Electrical and Gas Safety Inspections

5. Natural Risks Disclosure

6. The Environmental Risk and Pollution Diagnosis (ERP)

7. Non-Collective Sanitation Diagnosis

8. Termite Inspection

9. Zone de bruit

10. Television Reception

11. The Boutin Law

The Full List of Official Certificates for French Property Owners considers all these reports in more detail.

Section 3: Contractual Obligations

Key elements to include in a rental agreement

The rental agreement, or the lease, officially recognizes the transaction and lists the rights and obligations of the landlord and tenant. 

A landlord must provide a formal tenancy agreement, a contract de location, or bail if the property serves as the tenant’s primary residence. Many French landlords have their own contracts or standard agreements that can be purchased from most good bookshops.

Four approaches to the preparation of a tenancy agreement are possible:

  • Use one of the standard forms of pre-printed tenancy agreements that can be purchased from any good bookshop.
  • Use of a property professional such as an estate agent or huissier who may themselves have a model contract that can be used.
  • Preparation of an agreement by a notaire who will provide a tenancy agreement as an acte authentique.
  • Use the government-controlled service at DossierFacile, an online service that provides all the documents you will need.

In France, notarizing your agreement isn’t mandatory. But it can add an extra layer of security, making it easier to enforce in a dispute. Whether you go that route or not, ensure both parties have a signed copy.

Obligatory clauses

In a rental agreement, specific clauses are obligatory. The agreement must include:

  1. Names of tenant and landlord;
  2. Address of the rented apartment;
  3. If booked from the agency, the address of the rental agency;
  4. Start and end date of the contract;
  5. Contract renewal possibilities;
  6. Obligations and responsibilities of tenant and landlord;
  7. Amount of rent and deposit;
  8. Insurance information;
  9. A clause about rent increase;
  10. Clauses about fines;
  11. Methods for paying rent;
  12. Inventory of the apartment;
  13. Utility information (if it’s included in the rent);
  14. Check-in and check-out information;
  15. Information on notice periods for ending the contract.

Additionally, a landlord must annex the condition report—a technical report on the rental (Dossier de Diagnostic Technique)—and survey reports on energy performance (Diagnostic de performance énergétique) to the tenancy agreement.

Understanding the types of rental contracts: furnished vs. unfurnished

When renting an apartment in France, it’s essential to understand the type of lease you’re entering into.

There are different types of leases for apartments. Here are some common ones you may come across:

1. The furnished residential lease (Bail habitation meublé)

This lease type applies when you plan to use the apartment as your primary residence, i.e., to live in the property. Usually, the contract automatically renews after each term. You can legally end the lease only if you decide to do so or if the landlord provides a good reason. Tenants sign this lease for a minimum of one year.

2. The unfurnished rental lease

It is considered unfurnished if a rental property lacks the necessary amenities to enable its occupants to eat, sleep, and live decently and properly in the demands of everyday life.

An unfurnished property has three years if the owner is an individual or family. In the following cases, the lease may be shorter (minimum 12 months):

  • The tenant is a student.
  • The renter moved temporarily because of changes at work.
  • The renter is retired.
  • The lessee is expected to vacate.

3. The student lease (Bail d’étudiant)

4. A Bail Mobilité 

5. A Civil Code lease 

6. Holiday Lease

For further answers on every type of rental contract, you can consult our overview of Apartment Leases in France.

Rights and responsibilities defined by the lease agreement

The tenant’s rights

The tenant’s rights are what they may expect from their landlord, and his responsibilities are:

  • Right to have his privacy (the landlord has to seek his consent before having access to the property);
  • The decency of the accommodation;
  • The minimum standard of security.

The landlord rights

  • Set the amount of rent

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, rate increases for newly leased apartments in France’s major cities are limited.

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.

  • Selecting Your Tenant and Vetting Documentation

Tenants in France are highly protected from eviction, so you should carefully select prospective renters.

This is why conducting thorough tenant background checks is crucial. We’ve discussed the legal and practical considerations landlords must consider when performing them in France, so feel free to check it out.

  • État des lieux (Inventory report)

After a tenant finds your property, the landlord and tenant need to sign a contract and complete an état des lieux, or inventory and condition report. État des lieux is documenting the property’s condition when you start renting. You can download the inventory sample to familiarize yourself with état des lieux’s necessities.

  • Guarantee rule

As the property owner, you can ask tenants for a guarantee to ensure they can sustain the lease until its end. Only if the tenant’s income is over three times higher than the monthly rent will the tenant no longer have to comply with this requirement.  If needed, there are ways to insist on applying this guarantee rule.

    • Have the tenant pay the rent upfront;
    • Require a financial guarantor;
    • Have the tenant pay up to two months’ refundable security deposit (for potential property damage).

Section 4: Financial Obligations

Taxes and fees landlords must pay

Landlords have three options for income taxation on profits from furnished accommodations: micro-enterprise, régime reel, and micro-fiscal for those registered as micro-entrepreneurs.

Handling of security deposits and management of rental payments

A landlord usually demands a damage deposit (dépôt de garantie). Deposit can be used to offset the property’s neglect and rent arrears.

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.

Furthermore, unless otherwise stated, the tenant can’t use the deposit to pay last month’s rent.

The tenant will receive back the security deposit 60 days after moving out unless the property is damaged, in which case the landlord will retain the deposit to pay for the costs.

Financial subsidies available for landlords

MaPrimeRénov – French Home Improvement Grant

Those making significant improvements to their property’s energy efficiency are exceptionally qualified to use this incentive.

Both landlords and owner-occupants are qualified, albeit there are a few requirements, such as the property being used as the primary residence for at least five years after the grant is awarded.

Learn more about maximum income ceilings, eligible works, eligible properties, and application procedures in this guide.

Section 5: Maintenance and Repairs

Landlords in France are responsible for various maintenance tasks related to rental homes. Essentially, the tenant covers the cost of routine maintenance. For example, s/he pays to fix a leaky faucet but not to replace it. Or they are paying only for the use of the elevator but not its replacement. The French Civil Code and other relevant laws specify these obligations.

What are the landlords’ principal maintenance duties, legal obligations for emergency repairs and regular maintenance, and how do they handle renovations and their impact on tenancy? You can easily find out in Landlord Maintenance Duty in France: Know How to Be Ready

Section 6: Updates and Compliance

Staying updated with the latest legal changes in the rental market

Maintaining a rental home might require much work. Prospective landlords can, therefore, find the following questions and answers helpful in determining the benefits of the rental market.

Section 7: Resources for Landlords

For landlords in France seeking resources, there are several legal, advisory, and support services available to aid in effective property management and legal compliance:

Legal Advice and Associations:

  1. UNPI (Union Nationale des Propriétaires Immobiliers): This association provides advice, training, and legal resources tailored explicitly for property owners in France. It offers various services, including legal consultations and representation in disputes.
  2. CNAB (Confédération Nationale des Administrateurs de Biens): CNAB offers support and advice for property managers and landlords, covering lease management and property regulations.

Online Resources and Tools:

  1. Service-public.fr: A comprehensive government portal that provides information on legal obligations for landlords, including templates for rental agreements and details on required diagnostics before renting.
  2. Mon-Immeuble.com: A platform offering news, legal articles, and practical guides on property ownership and management in France.

Legal Aid:

  1. Bureau d’Aide Juridictionnelle: This office is available at local courthouses. It provides legal aid for those who qualify based on income, covering part or all of the costs associated with legal proceedings.
  2. L’aide Juridictionnelle: This program allows landlords to apply for state assistance in covering legal fees, which is necessary for landlords who might face legal challenges but lack the resources for extensive legal battles.

Training and Education:

  1. École Nationale de la Magistrature (ENM) offers seminars and training sessions to help landlords better understand legal practices and tenant management.
  2. Chambre de Notaires: Notaries often hold informative sessions to help landlords understand the legal intricacies of real estate in France.

Section 8: Case Studies

Successful property landlords understand that managing rental properties is a full-time job rather than a side gig. It must be completed correctly, and as a result, this position necessitates both execution and planning abilities.
Most importantly, you should respond to the tenant’s reasonable requests immediately. For instance, if the tenant reported a plumbing issue, you would send in the plumber the same day.

In the long run, becoming a successful landlord is 90% commitment and 10% skill

The most frequent cause of landlords’ business failure is their inadequate understanding of property laws and ignorance of their rights and obligations.

Take note if you’re wondering how to become a successful landlord since we’ve gathered some advice from experts in the industry.

Lessons learned from common pitfalls encountered by landlords

It would be best to start with a good vibe with the tenant. Obviously, this does not apply to unreasonable requests. You will need to be firm and politely refuse by saying that this is not covered in the rental contract.” Founder of Doc Pro
If you deal with any issues calmly, your tenant will appreciate that you are reasonable. This means they are more likely to let you know of a potential issue, such as rent being a day or two late, but they may also be more inclined to continue their lease.” Baruch Silvermann, the CEO & Founder of The Smart Investor
Having carried out thousands of property surveys for landlords, I can say that energy efficiency makes a big difference to how your tenant feels about living in your property.

Energy-efficient properties are cheaper to run, easier to keep at a constant temperature (and therefore more comfortable to live in), and also are generally more valuable than a less energy-efficient equivalent, attracting higher rents and a higher eventual sale price.” Guy Smith, Director at Every Property Certificate Ltd
Flexibility is the sign of a good landlord. A landlord also needs to understand the circumstances of his tenants. Compassion can be appropriate if the tenants have a good payment record and are currently having a crisis.” Jason Simrad Realtor & Owner Sims Real Estate Group

 

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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