Paris’ new rent control rules
Since 1 August 2015, new rules are applicable when setting rents in Paris. A prefectural decree brings into force what’s being referred to as “the rental framework”. Explanation.
In Paris, the freedom to set rents is a thing of the past. Initially introduced for a trial period, this framework for rents in the capital came into force on 1 August 2015. From now on, every Parisian landlord must be mindful of these new rules.
Paris has been divided into 80 neighbourhoods. Each sector has a reference rent calculated according to the size of the property, the building’s construction date, and the rental type (furnished or unfurnished).
*If the landlord is renting a property for the first time
Since 1 August, the rents chargeable for unfurnished or furnished properties are subject to a framework. From the starting point of the reference rent (set annually by the prefect), the rent charged must fall between a “floor” (reference rent less 30%) and a “ceiling” (reference rent plus 20%).
Note: if the rent set in the lease exceeds this “upper” limit, the tenant has a right to challenge it. Within a time limit of three years, he can bring an “action for rent reduction” and come to a settlement before the Regional Arbitration Commission (Commission départementale de conciliation (CDC)).
The new rules afford the landlord the possibility of adding a “rental supplement” to the basic rent for properties that have particular features (top floor, terrace, etc.) or facilities. Such appraisal is subjective, leaving the landlord the possibility of freely applying this top-up. Beware: if the tenant considers that the supplementary rent is not justified, they have three months from the signature of the lease to declare it and request a reduction. In such a case, it is mandatory to go first to the CDC before taking further legal action.
*If the lease is renewed by the same tenant
The new rent payable by a tenant who extends their tenancy cannot exceed the reference rent ceiling fixed by the prefect. If it goes above this limit, the tenant must, 5 months before the end of their tenancy, send a letter to the landlord by recorded delivery outlining a proposed reduction to the rent under Paris’ rules.
*If a landlord rents the property to a new tenant
The “new” rent cannot exceed the rent charged to the previous tenant, except for adjustments made in accordance with the “Reference Rent Index” (“Indice de Référence des Loyers” (IRL)) published each quarter by INSEE. And in Paris, the rent must not exceed the reference rent ceiling.