Rent control: Paris, Lyon... Know everything

FRAMEWORK OF RENTS.

Rent control: Paris, Lyon... Know everything

FRAMEWORK OF RENTS. Born from the Elan law, the rent control is a device intended to limit the rise in rents in tense areas. Which cities apply it? How does it work? We tell you everything.

Rent control is a mechanism that prohibits landlords from setting the amount of rent above a reference rent. This device is applied in so-called "tense" areas, where rental pressure is high. In recent years, some municipalities have applied a stricter system. This is the case of Paris, Lille, Hellemmes, Lomme, and since June 2021, several cities of Plaine commune in Seine-Saint-Denis, such as Aubervilliers and Saint-Denis. Since November 1, 2021, the city of Lyon and Villeurbanne have been affected by the system. From 2022, Bordeaux and Montpellier will also apply this system, several decrees having recently been passed to this effect. Other municipalities, on the other hand, have seen their case challenged. This is the case of Grenoble, Grigny and the eleven municipalities making up the whole of Grand-Orly Seine Bièvre, south of Paris.

For two years, the city of Paris has been experimenting with a rent control system. Since July 1, new reference rents apply, by prefectural decree. As a reminder, the reference rents are determined according to several criteria: period of construction of the building, number of main rooms, type of rental (furnished or not)...

The implementation of the new reference rents comes at a time when a study by Best Agents points to the inefficiency of the rent control system: one in two advertisements is illegal. Small surfaces (less than 20 square meters) are the most affected: nearly eight out of ten advertisements are illegal for unfurnished and seven out of ten for furnished. "This supplement linked to the exceptional characteristics of the accommodation (beautiful view, terrace, improvement works... Editor's note), is easier to justify when the property is furnished", explains Thomas Lefebvre, scientific director of Meilleurs Agents at Le Figaro. “Unfortunately, this detail is only specified in 2% of empty listings and 1.5% for furnished properties.”

Since July 2019, the lessor must set his rent according to a reference rent scale for any new lease, concluded or renewed. The rent is set by the Rent Observatory of the Paris conurbation (OLAP) for the 80 districts of the capital. The organization takes into account different criteria (year of construction of the building, type of accommodation, number of rooms, etc.). It determines three different rents: the reduced reference rent (30% lower than the reference rent), the reference rent and the increased reference rent (20% higher than the reference rent).

For his part, the lessor must ensure that he does not exceed the increased reference rent. The rent must also not be lower than the reduced reference rent. “The amount of the reference rent and that of the increased reference rent must be mentioned in the rental contract”, recalls the CLCV on its site. Are you a tenant and your lease is in progress? At any time, it is possible to engage in negotiations to revise the amount of your rent downwards. If your lessor refuses, you can terminate your rental contract, respecting the notice period of one month. The lessor must respect the rental framework for the next tenant. As a reminder, the rent control system does not apply to the tacit renewal of the lease.

New rent ceilings have been applied since July 1, 2020, on average up by 1.5%. Rest assured, this increase is far from uniform. Reference rents are even falling in some neighborhoods. An example ? In the Belleville district, the ceiling for a recent four-room apartment is reduced by 8%. Please note, these new ceilings only apply to signed leases, that is to say, concluded and renewed from July 1, until June 31, 2021.

Do you want to make sure that the amount of your rent in Paris is within the nails? Consult now the site of the Regional and Interdepartmental Directorate for Accommodation and Housing (DRIHL) to make a simulation of the rent control: //www.referenceloyer.drihl.ile-de-france.developpement -durable.gouv.fr/. In the search engine, indicate the number of main rooms in your home, the period of construction of your building and the type of rental. Enter your address. You then obtain the three reference rents, expressed in price per square meter.

Let's imagine that you are going to sign a rental contract for a two-room apartment in a building built between 1946 and 1970, furnished, located in the 34 Chaussée d'Antin district, in the 9th arrondissement of Paris. By carrying out a simulation of the rent control, you obtain a reference rent reduced to 21.1 euros per square meter, a reference rent to 30.1 euros per square meter and a reference rent increased to 36.1 euros per square meter for the period from July 1, 2019 to June 30, 2020. If your apartment has an area of ​​35 square meters, the amount of your rent must therefore not exceed the reference rent plus 1,263.5 euros.

If we perform a simulation for a lease concluded from July 1, 2020, we obtain the following figures:

With a surface area of ​​35 m², the amount of the rent must not exceed 1,267 euros.

Since November 1, 2021, the city of Lyon has applied a rent control system. Since this date therefore, any lease concluded or renewed must therefore respect the reference rents set by the prefecture. The stated objective is to limit the surge in prices in the metropolis, faced with an influx of new inhabitants and a shortage of housing. Note: a simulator has been set up available here.

"Lyon and Villeurbanne have been divided into 4 zones", we specify. "For each zone, a reference rent is fixed: the owners cannot exceed this rent increased by 20%. These reference rents depend of course on the number of rooms (T1, T2, T3 ...), the year of construction, and the nature of the property (empty or furnished)". All you have to do is indicate the address of the accommodation, then the number of rooms, whether it is furnished or not, its period of construction, the living area and the rent. The landlord or tenant can then check that the practical rent does not exceed the legal ceiling. The entire calculation is detailed.

Please note that the supervision does not apply in the following situations:

It's official, the rents of nine towns in Seine-Saint-Denis have now been capped since June 1. A prefectural decree signed last April allows the application of the rent control system, which is part of the Elan law of 2018. In detail, it concerns the territory of Plaine commune, which has made it the demand last year, or 430,000 people in total. But which cities are affected? We summarize:

"The acceleration of urban changes and the strengthening of the attractiveness of the territory of Plaine Commune (...) could contribute to fueling inflationary tensions on the rents of the territory", had indicated the prefectures of Île-de-France, of Seine-Saint-Denis and Plaine Commune in a press release. They then cited in particular the 2024 Olympic Games and the Grand Paris Express.

Very concretely, the rent control therefore applies to all new leases, concluded or renewed, as well as mobility leases. Want to know if your rent is on target? An interactive map allows you to find out by entering your address and the characteristics of the accommodation. As a reminder, a margin of maneuver of 20% upwards and 30% downwards compared to the reference rent is authorized.

In Île-de-France, Paris and the Plaine commune apply rent controls. They are the only ones to apply a specific system with reference rents fixed by prefectural decree. Some cities in Île-de-France are considered to be in a "tense zone". Here are some examples :

What does that actually mean? This device has nothing to do with the rent control of the Elan law. "In these municipalities, the rent of a dwelling (empty or furnished) used as a main residence by the tenant is capped when the dwelling is rented out again (case of a new tenant) and when the lease is renewed (case of same tenant)", recalls the site service-public.fr. "[If the unit has been rented within the last 18 months], the new rent cannot exceed the amount of rent paid by the previous tenant.

However, if the old rent has not been revised in the previous 12 months, the lessor can increase it by the evolution of the reference index of rents (IRL) to fix the new rent. In 2 cases, the new rent can be fixed beyond the variation of the IRL: if the accommodation has been the subject of certain works since the departure of the former tenant or or if the old rent is clearly under -evaluated".

The Elan law does not only provide for the experimental implementation of rent control for five years for municipalities that wish to do so. It also establishes penalties:

As a reminder, these sanctions are not automatic. They are applied after a passage before a conciliation commission. The landlord must include the reference rents in the rental contract.

Are you about to conclude a lease, but you realize that the landlord does not respect the ceilings set by prefectural decree? First, have you checked that it does not apply a rent supplement (read below)? This vague concept makes it possible to raise the price of rent if the accommodation has certain characteristics. As a reminder, this supplement must be justified.

If not, here's what to do based on your situation:

Do you find that your rent exceeds the increased reference rent? There is an exception that allows the landlord to increase the amount of their rent: the rent supplement. This can be applied when the accommodation has characteristics relating to comfort or location, for example. However, the law remains very vague on what this notion covers. It is assumed that the legislative text therefore alludes to the possible presence of a balcony, an extraordinary view of a monument in Paris, etc.

As a reminder, the additional rent can be applied on the sole condition that the basic rent (excluding charges) is at the same level as the increased reference rent. The amount of the rent thus includes the basic rent and this famous supplement, which must be justified in the rental contract. Are you a tenant and do you feel that this supplement is not justified? It is possible to contest it via the conciliation commission, within three months after the signing of the lease.

Since March 1, 2020, any lease concluded or renewed, including for joint tenancies and mobility leases, must now comply with the rent cap mechanism, in order to guarantee "affordable housing for all", argued the socialist mayor Martine Aubry. "Are not affected by the rent control: housing approved by Anah, housing subject to the law of 1948, HLM housing, and tourist rentals", specifies one on the dedicated site.

As in Paris, landlords must respect the reference rent scale published by prefectural decree. The three rents (reduced, reference and increased) must imperatively be mentioned in the contract, at the risk of exposing oneself to sanctions (read below). Are you a landlord or tenant and want to check that your rent is on track? You now have two sites at your disposal to do a simulation:

In both cases, you have access to a search engine in which you must enter your address and the characteristics of your accommodation. If we take the example of a one-room apartment located in the heart of Lille, in sector 1, the reference rent is set at 17.3 euros per square meter. The increased rent is 20.8 euros and the reduced rent is 12.1 euros.

For the current of the year 2022, indicates the city of Bordeaux in a press release. "The A'Urba (Bordeaux Aquitaine Urban Planning Agency) which pilots the rent observatory will now carry out new studies in order to consolidate the data on the scale of Bordeaux and to determine zones according to rents", had -it was specified at the beginning of September. "These elements will be sent to the Prefect, who should take a decree during the second half of 2022 specifying the amount of a median rent for each zone. After a period of information for owners and tenants, the rent framework will be applicable during the year 2022".


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