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Property owners in Paris: what’s changing in 2019
After months of deliberation, la loi Elan has just been definitively adopted by Parliament and published in the Journal officiel. Although it most notably imposes new city planning legislation, it also includes measures that affect homeowners, especially those who rent out their apartment in Paris.
Flexible rental agreements
Property owners will be able to rent out their furnished apartments for a short-term period of one to ten months to renters who are either “in vocational training, studying in a higher education institution, under apprenticeship or internship, volunteering as part of a civic service, in the middle of a job transfer, or on temporary assignment“. The non-renewable lease can be extended up to ten months maximum if need be and will be rent capped. The tenant has the right to move out at any time, without justification, so long as he or she gives one month’s notice. The renter is also exempt from paying a security deposit. Utility charges are fixed by the owner and if renting to multiple tenants, a clause de solidarité, which would force one tenant to pay the rent if another is unable, cannot be included in the lease. Instead, owners benefit from a guarantor system put in place by Action logement, which would protect them from delinquencies. If the renter wishes to stay longer than ten months, he or she must sign a new, classic lease agreement for a furnished apartment.
Furnished rentals on Airbnb
In handful of French cities (Paris, Lyon, Bordeaux, Annecy…), short-term rentals for tourists are henceforth strictly regulated. Owners will not be able to rent out their main residence for more than 120 days a year. If they exceed this maximum, they could be fined €10,000. Owners must also officially register said property, otherwise they risk a €5,000 fine per unlawful listing. If so demanded by their local Town Hall, property owners will have one month to send a statement detailing the number of nights they have been hosting guests, otherwise, they will incur a maximum fine of €10,000 per listing. Local authorities will have until December 31st of the following year to request this information.
In addition, the listing platforms themselves will have to inform the owners of such obligations, send them a statement each year detailing the amount of money an owner received through the service, as well as send a summary report of this activity to the French tax authorities. They are also expected to block rentals that have exceeded the 120-day limit and to verify that the owners are respecting these conditions. Otherwise, the companies could be fined up to €50,000.
Reversing the French administration’s decision to outlaw rent caps in Paris and Lille, la loi Elan authorizes jurisdictions to institute rent caps on a trial basis for a duration of five years. Laws punishing those who fail to comply have been reinforced. Property owners will have to repay any sum received that is over the rent cap limit and will be fined €5,000 (€15,000 if the space belongs to company). Already, Paris has announced its intention to establish rent caps on a permanent basis.
Landlords will no longer have to provide tenants with a hard copy of property regulations and home inspection & risk assessment results (energy performance of the property, natural disaster risks, presence of lead, property measurements, the state of the property’s electricity and gas systems) at the signing of the lease. These documents can henceforth be sent electronically to the tenant.
The law gives a precise definition as to what exactly squatting entails: “the unlawful intrusion onto someone else’s property by trespassing.” It authorizes the immediate expulsion of the occupants from the premises regardless of the time of year, ending the law that once forbade said expulsion between November 1st and March 31st.