With the ALUR law, furnished rental as the main residence of the tenant is now more regulated but it however keeps the necessary flexibility regards to the duration of the lease, the amount of the security deposit or the choice of fixed charges. And most importantly, the advantageous tax regulation remains untouched. Here the 7 points that sum up the essential information.
1/ At last a legal definition of furnished rental !
Thanks to an abundant existing case law, the legislator defined a furnished accommodation as a decent housing equipped with sufficient furniture in number and quality to enable the tenant to appropriately sleep, eat and live in it in regard with the requirements of daily life.
The detailed list of furniture elements that the furnished accommodation must be equipped with will be stated through a decree.
2/ A written lease agreement for a one year or nine months duration for students
The lease agreement will have to respect a type of contract defined by a French Council of States decree.
An assessment of the property’s initial state as well as an inventory must be attached.
Furnished rental keeps its flexibility in terms of duration: at least 1 an tacitly renewable or nine months for students without tacit renewal, for 3 years for empty rental.
The tenant can cancel at any moment with a 1 month period of notice, and the property owner every year at the anniversary date of the beginning of the lease with a 3 months preliminary notice (every 3 years with a 6 months period of notice in empty rental) by specifying the reason of his cancellation, whether it is due to his decision to move in the accommodation or sell it, or for a legitimate and serious reason : the non-execution by the tenant of one of the obligations he was compelled to.
3/ A security deposit to be equivalent to two monthly rents
For a furnished rental, the amount of the damage deposit is set to two months of rent as a basic principle for one month in empty rental. This adaptation for furnished rental is legitimate since the accommodation consists in furniture and equipment.
4/ Rent : fixed freely or regulated ?
The law provides a framework for the rents in every municipality of more than 50 000 people, but the measure should be implemented on experimental basis in Paris only. A rent supplement would be put in place to take into account the equipment as well as the proposed services by the furnished rented property. However, once the contract signed, this additional rent can be called into question and contested by the tenant during three months before the Departmental Committee for Conciliation.
This measure may lead to disputes and tensions between the tenant and the landlord, which does not nurture the idea of pacification of their relations, an objective yet clearly stated by the ALUR law.
The rent remains freely set by the property owner and the tenant in the rest of French municipalities.
5/ Rental charges : a possible fixed-amount
The statement of the amount of the charges added to the rent is mandatory, but the parties have the choice between a provision for charges, as in the case of an empty rent, or stating a fixed price that can not allow a complementary supplement or an adjustment. The amount of this fixed price must of course not be demonstrably disproportionate in regards with the real charges, but it is important that both parties have the possibility to adopt the solution of a fixed price, which would be the most adequate solution for a furnished rental where the change of tenants are frequent.
6/ Technical scorecards to attach
Apart from the actual diagnostics (ERNMT, DPE et CREP), the property owner will have to provide a scorecard on the gas and electrical installation and on presence of asbestos in the premises. The decrees of the French Council of State will define the rules of implementation for those new diagnostics.
7/ Capped agency fees for tenants
ALUR law stated the principle according to which the fees generated by the establishment of contact for an accommodation will be exclusively at the expense of the lessor. As an exception, fees for establishing visits, making of the file and the lease agreement will be shared between the lessor and the lessee and the part of the rent will be limited through decree.
After the implementation of the ALUR law, the interest for a furnished rental remains complete for the landlords who wish to make use of their property on a short or long term basis and more importantly benefit from an attractive taxation as a LMNP or LMP (more information on www.jedeclaremonmeuble.com).