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12 January 2020

Rent control

Rent controlWhat types of rentals are concerned by the rent control in Paris?

Rent control was reactivated by the ELAN law voted at the end of 2018. The Paris City Council has therefore chosen to put this system back in placeat the end of July 2019, after a cancellation in July 2018.

The general principle of this framework was to define a maximum rent value per sqm for all newly signed leases, known as the “réference de loyer majoré”

In order to avoid the shortcomings of the Law of 48 and its rents blocked at ridiculous values, the law specifies that the maximum value is equal to 120% of the average rent recorded for a given type of property and area.

In Paris, the rent observatory has therefore defined a set of reference values, called median reference rent, corresponding to the medians of sample leases defined according to a breakdown of criteria: zone: Paris is divided into 80 administrative districts date of construction: four sections are defined with 1946, 1970, 1990 as milestones. type of rental:

  • empty or furnished number of rooms: from a studio to 5 rooms at most
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The framework values therefore take into account the furnished properties, for which the rent framework also applies (in the case of furnished main residences on a one-year lease).

You will find the framework reference values on the following site http://www.referenceloyer.drihl.ile-de-france.developpement-durable.gouv.fr/

http://www.referenceloyer.drihl.ile-de-france.developpement-durable.gouv.fr/

 

The framework provided by the ELAN law applies to new leases signed as of July 1, 2019 in Paris and is not retroactive.

An old lease that is well above the increased reference value may very well continue but the tenant may try to renegotiate the rent in two ways :

– request a reduction under the threat of a holiday: in this case the lessor may be led to accept the reduction if he knows that the management on the new lease will oblige him to concede this revaluation in any case

– renegotiate at renewal: the ELAN law has provided a framework for negotiation by the tenant in the context of the renewal of the lease after July 1, 2019; the readjustment is not automatic and the request must be made 5 months before the renewal.

 

Exceptional additional rent beyond the frame?

A rent supplement may be applied to the basic rent as set out in A of this III for dwellings with locational or comfort characteristics justifying it, compared with dwellings of the same category located in the same geographical area. Article 140 of the Elan Law.

The additional rent must be justified by a truly exceptional element in relation to the property in the same area with the same characteristics in terms of number of rooms, date of construction or furnished or empty rental.

As the reasons justifying a supplement have not been defined, it is necessary to use common sense in choosing reasonable grounds. Here is a summary table that

What are the risks involved in overrunning?

As a preliminary, we would like to remind you that the model lease that has been mandatory since 2014 requires the median and increased reference values to be explicitly indicated. The tenant can therefore easily know whether or not the requested rent is higher than the increased reference value (median value + 20% as a reminder).

The potential procedures can be broken down by degree of dispute as follows:

  • request to the landlord by registered mail referral to the conciliation committee subpoena
  • The conciliation board
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The conciliation board is a body that issues non-binding opinions, so the tenant will have to go to court if the landlord refuses to implement the decision.

If necessary, you are obliged to indicate an explicitly justified rent supplement on the lease.

The tenant who wishes to contest the rent supplementhas a period of three months from the signing of the lease to refer the matter to the departmental conciliation commissionprovided for in Article 20of the aforementioned Law No. 89-462 of 6 July 1989, …] In the absence of conciliation, the lessee has a period of three months from receipt of the opinion of the departmental conciliation commission to bring an application to the court for annulment or reduction of the rent supplement. The judge may raise the case automatically in the absence of prior referral to the departmental conciliation commission. Article 140 of the Elan Law.

Law The new law also introduces a mechanism allowing the “representative of the State in the department” to set administrative fines for the lessor who does not comply with the provisions of the framework (indication of the increased reference rent in the lease, justification of an additional rent except for the “rent for the first time”, etc.).

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Category: Legal aspects
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