11. What can I Charge in Rent?
11.1. New Tenancy
As a general principle, a landlord is free to set their own rental on new tenancy. There are no nationwide controls on rents.
The level of rents varies enormously over the country, and they can even do so within regions for similar properties. So it may not be easy to determine the market rent for your property.
You need to look at local adverts to see the rents that are being advertised and visit some of the advertised properties to see how they compare with your own!
To obtain some idea of what the market rent is in your area, you can consult the government website Carte des Loyers, from which you can (normally) obtain the averarge rental for properties in your commune.
The figures are derived from the millions of adverts published each year in France for properties to let. Where there are not enough figures available in a particular commune, a wider grouping of communes is used.
The figures are for unfurnished dwellings.
Nevertheless, although there are three average figures for apartments, to reflect different sizes, condition, amenities and locality, there is only one for houses.
There is a general figure for apartments with an average surface area of 52m2, with two others for apartments measuring 37m2 and 72m2. The figure for houses is based on a property measuring 92m2. Accordingly, the data should be used only as a guide.
Another source of information you can use is the Observatoires des loyers where more detailed information is available for 50 towns and cities of France. This is again run by the government.
i. Rental Index
Once a rent has been agreed, and a tenancy agreement has been signed, there are specific controls on further increases in the level of the rent during the period of the tenancy.
A landlord can increase the rental once a year, provided the tenancy agreement has in it a clause to that effect. If it does not, no rental increase is permitted.
However, the rent increase cannot be any higher than that of the previous letting, adjusted by the inflationary increase in the rental index - the Indice de Référence des Loyers (IRL).
There are exceptions to the rule, such as where major works have been undertaken, or where the previous rent was manifestly too low in comparison with other local rents, where an additional increase can apply, but only with the consent of the tenant.
Since August 2022 a 'bouclier loyer' has been in place which supercedes the normal IRL rules, limiting rent increases to 3.5% to March 2024, in the combat against inflation.
ii. Rents Frozen
Since 2014 in areas of housing stress there is there is a cap on the maximum rent that can be charged, called l’encadrement des loyers.
Here on a new tenancy, the rent cannot exceed the rent level of the previous tenant.
The rules only applies if the local council apply it but it is fairly universal.
These areas are:
Ajaccio, Annecy, Arles, Bastia, Bayonne, Beauvais, Bordeaux, Draguignan, Fréjus, Genève-Annemasse, Grenoble, La Rochelle, La Teste de Buch-Arcachon, Lille, Lyon, Marseille-Aix-en-Provence, Menton-Monaco, Meaux, Montpellier, Nantes, Nice, Paris, Saint-Nazaire, Sète, Strasbourg, Thonon-les-Bains, Toulon et Toulouse.
From 1st Jan 2024, this list will be substantially extended by over 2,000 additional communes, whose names can be found at Décret n° 2023-822 du 25 août 2023. The councils in these communes will have the right to impose the controls, but many may choose not to do so.
Rents can, however, rise annually in line with the IRL.
iii. Maximum Rents
Since 2019, in Paris and certain other areas, the rule is tougher, as there is a ceiling on the maximum rent that can be charged.
Rents in these areas can only be increased in line with the IRL if they have not reached their ceiling figure.
The list of places concerned by this rule are Paris, Lille, Hellemmes, Lomme, Aubervilliers, La Courneuve, Épinay-sur-Seine, L'Île-Saint-Denis, Pierrefitte-sur-Seine, Saint-Denis, Saint-Ouen-sur-Seine, Stains, Villetaneuse., Lyon, Villeurbanne, Bagnolet, Bobigny, Bondy, Le Pré Saint-Gervais, Les Lilas, Montreuil, Noisy-le-Sec, Pantin, Romainville, Montpellier, and Bordeaux.
To this list will be added Marseille at the end of 2023 and 24 communes in the Communauté Pays Basque in 2025. The communes concerned in the latter are Ahetze, Anglet, Arbonne, Arcangues, Ascain, Bassussarry, Bayonne, Biarritz, Bidart, Biriatou, Boucau, Ciboure, Guéthary, Hendaye, Jatxou, Lahonce, Larressore, Mouguerre, Saint-Jean-de-Luz, Saint-Pierre-d’Irube, Urcuit, Urrugne, Ustaritz and Villefranque.
In Paris The rent levels are set district by district, size and age of construction. Information on the maximum rental levels in Paris can be found at Loyers de Reference.
In areas where the rent is capped at a maximum it is possible for a landlord to justify a rent above the maximum, but only provided the property has exceptional characteristics from other properties in the area. This is called a complément de loyer. In addition, if there are certain elements of the property in poor condition, or it is a F or G energy efficiency graded property, the increase cannot be applied.
If the property has remained empty for at least 18 months, and the property has an energy rating of at least E, it is possible to freely set the new rental charge.
iv. Poorly Insulated Dwellings
Since January 2021, a landlord is not permitted to increase the rent on a new tenancy (or renewal) if the thermal insulation value of the property is greater than 331 kWh per square metre per year, i.e. a F or G class dwelling.
This law has applied nationally since 25th August 2022.
Specifically, the landlord is not permitted:
to apply a rent higher than that of the previous tenant, when establishing a new lease;
carry out the annual review (set of the indexation clause) of the rent during the lease;
increase the rent following work to improve the accommodation which is the subject of an agreement, by an express clause
propose a rent increase to the tenant when renewing the lease, in the event of manifestly undervalued rent.
Nevertheless, for rental contracts for 3 years renewable concluded before 24th August 2022, rent increases will remain possible, until tacit renewal or possible renewal of the lease.
From 1st January 2023 a property that consumes more than 450 kWh/m2/year cannot be used for letting purposes.
With effect from 1st January 2025 this applies to all those classed 'G' (420 kWh/m2/year), to those classed F from 1st Jan 2028 and to those classed E from 1st Jan 2034.
v. Affordable Rentals
Since January 2022, it is also possible to let a property at a rental under the market rate and obtain tax relief. The scheme is called 'Louer abordable'. Under the scheme a landlord can obtain tax relief of 15% if they accept to let 15% below the market rate, or 35% if they let at 30% below the market rate. To benefit you need to sign up with the housing agency ANAH, for a period of at least 6 years.
11.2. Controls on Adverts
As of 1st April 2022, there are controls on advertisements made by private individuals for properties to rent. The advert must state:
the amount of the monthly base rent (loyer de base);
the amount of the increased reference rent (loyer de référence majoré): the maximum rent authorised by the rent control programme;
the amount of any rent supplement (complément de loyer): landlords are entitled to add this supplement when special comfort and location characteristics justify it. This supplement can enable landlords, if certain conditions are met, to raise the rent above the increased base rent.
The corresponding amounts must be preceded by the indication (zone soumise à encadrement des loyers.
The font size of the amount of the monthly base rent must be larger than the increased reference rent and the potential rent supplement.
You can read more in the Chapter on 'Advertising - Finding a Tenant.'
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