Renting: Rent controls effective in Paris since July 1, 2019
In Paris, rents are again effective for signed leases signed on July 1, 2019.
Introduced in Law No. 89-462 of 6 July 1989 aimed at improving rental value and amending Law No. 86-1290 of 23 December 1986 through Law No. 2014-366 of 24 March 2014 for access to housing and renewed urbanism, known as the “Alur” law, rent controls have already been applied in Paris between 1 August 2015 and 28 November 2017. They were also applied in Lille from 1 February to 17 October 2017. However, the administrative judge had declared the cancellation of these measures.
Law No. 2018-1021 of 23 November 2018 on housing growth, development and digital, known as the “Elan” law, stipulates that a speciﬁc rent control mechanism can be implemented in certain areas once again. Article 140 of this law effectively reintroduces the rent control measures, on a ﬁve-year experimental basis, in all or part of the strained areas. This signiﬁes that rent controls may be applied in only one or a few towns because the law will no longer oblige that the entire agglomeration (in the sense of decree No. 2013-392 of 10 May 2013, on the scope of application of the annual vacant residence tax instituted by Article 232 of the French General Tax Code), be subject to it.
Housing categories and the geographical sectors are determined according to the structure of the rental market observed by a local rent monitoring centre. Each reference rent is equal to the median rent calculated from the rent levels observed by the local rent monitoring centre, dependent on housing categories and geographic areas. To comply with the rent controls, the rent requested (excluding charges) must be within the reference rent increased by 20% and the reference rent decreased by 30%.
An additional rent can be applied to the basic rent for housing with location or convenience characteristics that justify it, in comparison with housing of the same category situated in the same geographical area. The amount of the additional rent and the property characteristics justifying it must be mentioned in the lease agreement.
The City of Paris is the ﬁrst commune authorised to implement this new rent control mechanism, by Decree No. 2019-315 of 12 April 2019 (setting the geographic boundaries of the City of Paris for the introduction of the rent control mechanism stipulated in Article 140 of Law No. 2018-1021 of 23 November 2018 on housing growth, development and digital).
The rent control measures in Paris have been effective since 1st July 2019. From this date, it is useful to refer, in setting rents, to Prefectoral Decision No 2019-05 of 28 May 2019 setting reference rents, increased and decreased reference rents for the City of Paris (price per square metre of habitable area, per housing category and geographic area).
- As with all agglomerations located in strained areas, properties rented out in Paris are also subject to rent controls upon re-rental and to the rent reference index for the annual rent adjustment during the lease.
From now and since the “Elan” law, in the event of non-compliance with the rent control measures, the landlord risks a ﬁne that could stretch to €5,000 for a natural person and €15,000 for a legal person.
- To ﬁnd out more about the reference rent of the neighbourhood in which the housing is located, you can visit the following link: www.referenceloyer.drihl.ile-de-france.developpement-durable.gouv.fr