Furnished rentals in France : focus on compensation rules

16 October 2018

Regulation of seasonal furnished rentals in France

Since the decree of 28 April 2017 known as the “Airbnb decree“, the rules for renting a furnished property for a short period of time have been very restricted, in order to protect residents’ access to housing and to preserve fair competition with hotel businesses.

This decree allows cities with more than 200,000 inhabitants to set up a system of “control” of furnished rentals.

The cities that have chosen to implement this decree are Paris, Lyon, Marseille, Rennes, Nice, Toulouse, Strasbourg, Nantes, Montpellier, and Lille.

First, a distinction should be made according to the type of residence, then, secondly, the specificities of the declaration specific to certain cities.

When the leased property is your principal residence

If the property you wish to rent is also your main residence in France, you cannot rent it more than 120 days a year. In addition, the stay of the same tenant may not exceed 90 consecutive days. This rule is valid in all cities in France.

However, in the above-mentioned cities, you must make a declaration or registration of rental to the town hall of the place where the property is located.

It should be noted that it is not only municipalities with more than 200,000 inhabitants that are concerned. Indeed, agglomerations of more than 50,000 inhabitants can also set up this registration system (Grenoble for example).

When the residence is in co-ownership, remember to check that the regulations of the residence do not prohibit rental.

When the leased property is your second home in France

In this case, you are not subject to the 120-day per year rental restriction.

On the other hand, the administrative formalities are more cumbersome. In addition to the rental declaration, there is the possibility of requiring the lessor to request a “change of use”, which consists in transforming a residential space into a space dedicated to seasonal rental.

In some cities, for the authorization to be issued to you, you must respect the principle of compensation. This means that you must buy a commercial space equivalent to your property, so that “the loss of housing is compensated”.

The specific case of Paris (Regulation of seasonal furnished rental in Paris)

Whether you rent your main or secondary residence for a period of less than or more than 120 days per year in Paris, it is mandatory to make a declaration to the Town Hall (Mairie de Paris).

You must also request a change of use. However, with regard to compensation, the situation may differ from place to place. Indeed, depending on the boroughs (arrondissement), you may be subject to an increased compensation obligation. In other words, you must compensate twice the living space in the same district where your property is located.

Important :

On October 3, the deputies passed a law aimed at tightening sanctions against landlords and “Airbnb” type hosting sites that do not respect their obligations. Indeed, this new legislation, known as the Elan Act, strengthens the administration’s controls, particularly on the 120-day rule for principal residences.  Fraudulent lessors may then face a fine of up to €10,000 This law should be definitively adopted on 16 October next. Stay tuned for more information.

The Team Roche & Cie

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