Article 140 of the Élan Law (passed in late 2018) introduces rent control for candidate cities and, in particular, on an experimental basis, for Paris for a period of 5 years. Rent control in Paris has been in force again since late July 2019, regardless of the type of property rented as a primary residence. When it comes to renting prestigious properties, landlords may charge an additional rent supplement, provided they meet certain criteria.
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Rent control under the Élan Law: how does it work?
Rent control is therefore making a strong comeback, in accordance with the Élan Law, in candidate cities. For Paris, an order published in May 2019 set the reference rents that must not be exceeded. Thus, to comply with rent control, a landlord must set the rent (excluding charges) at an amount between the reduced reference rent (30% below the reference rent) and the increased reference rent (20% above the reference rent). For information, landlords can find the reference rents by district on the website of the Regional and Interdepartmental Directorate for Accommodation and Housing (DRIHL).
How can rent control be bypassed through rent supplements?
To avoid a decrease in rental supply, particularly in tight housing markets where it is difficult for people to find accommodation, the legislator has allowed landlords to set a rent supplement.
But beware: this supplement must be expressly stated in the rental agreement. It is added to the base rent.
Moreover, there is no exact definition of the rent supplement; the legislator refers to exceptional characteristics compared with surrounding homes of the same category.
The absence of a list of characteristics defined by law risks giving rise to disputes between landlords and tenants before the departmental conciliation commission.
It should indeed be noted that the tenant may refer the matter to this commission within 3 months of signing the lease containing this clause. To be justified, a rent supplement must be supported by features that are out of the ordinary, explains the DRIHL.
For example, the provision of a parking space or a cellar is considered to be included in the rent.
The same applies to household appliances such as a refrigerator, dishwasher, or oven made available by the landlord.
A nice view may also not always justify a rent supplement.
On the other hand, the Paris conciliation commission has acknowledged that the existence of a private garden in the heart of Paris's 16th arrondissement was a highly sought-after and very rare feature and could, as such, justify the application of a rent supplement.
In the event of a dispute, the DRIHL conciliation commission will determine whether or not the feature justifying the application of this supplement qualifies as exceptional.
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