Rent control should become applicable to rents in Paris this summer. The landlord must set the rent charged within the confines of the official average rent. Such reference rents will apply to 80 Paris districts.

The measure will come into force in Paris in July 2015; this is the need-to-know provision of the ALUR law applicable to private rental properties.

The authorities have announced that this will be a “trial” measure, only applicable in Paris.

Framework

At the time of the signature of a new or renewed lease, the owner will no longer be free to charge the rent they want. They must refer to an “official” average rent within a “floor” and “ceiling” bracket.

The average rent

As yet unknown, the reference rent (calculated from a database of at least 50 reference rental rates) will be applicable to 80 Paris quartiers. This “official” rent will vary according to number of rooms and type of building.

The “upper” and “lower” limits

The “new” rent charged may not be more than 20% over the average rent. Nor may it be 30% below this benchmark rent.

The law permits a “rental supplement” chargeable for rare or unusual properties (in terms of surface area, with views, location, or status).

The “creation” of the average rent

This “benchmark” rent will be calculated by “l’Observatoire des loyers de l’agglomération parisienne” (“OLAP”) based on rental data provided by real estate professionals (real estate agents, property managers and developers).

According to the watchdog CLAMEUR, only 20% of rents on the Paris market will have to be reduced after this framework becomes applicable. As for the 11.8% of properties rented at rates lower than the norm, these rents could be raised.