13. Protection Against Arrears of Rent on a French Rental Property

If you want to reduce the risk of non-payment of rent then you need to select your tenant with great care.

Nevertheless, even though you may have made the right choice, personal circumstances can later change (economic uncertainty, family instability, deterioration in relationships), and so a prudent landlord needs to protect against these later risks.

There are three main forms of protection that a landlord can take against the non-payment of rent.

1. 13.1. Rental/Damage Deposit
2. 13.2. Insurance Policy
3. 13.3. Guarantor

None of these steps offer complete security, and they do not apply in all circumstances. In particular, the use of insurance cover is going to be more difficult to get in the case of a long-term letting to someone from overseas, and the use of a guarantor in such a case equally problematic.

Accordingly, if you let to an international tenant, you are going to have to place greater reliance on your vetting procedures, a larger initial deposit and/or rental payments well in advance.

13.1. Rental/Damage Deposit

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

The deposit is called the dépôt de garantie.

However, the deposit is not obligatory, and neither is a landlord permitted to insist on a deposit if the rent is payable two months or more in advance.

The deposit does not carry reimbursable interest to the tenant, and cannot be revised during the tenancy.

It must be returned to the tenant within a maximum of two months from the end of the tenancy.

The amount to be returned will be the balance left after payment of any rent arrears or charges, and the cost of justifiable repairs.

The only repairs that are admissible are those for which the tenant was responsible, including any damage or neglect of the property that they should have repaired prior to termination.

If the tenant should give notice to terminate the tenancy, they are not entitled to use the deposit held by the landlord in lieu of rental payments. They must pay the rent as normal and seek a refund of the deposit when they vacate the property.

Disputes about the non-reimbursement of the deposit at the end of the tenancy are one of the biggest sources of litigation between landlords and tenants.

If the landlord unjustifiably withholds refund of the deposit then it carries interest at a rate set by government – about 2%.