Renting a property in France – (part two)
In part one of our guide to renting a property in France we covered choosing a property, what documentation you need to produce and what surveys you’ll need to have carried out. In part two we tackle the initial costs involved in renting, the ins and outs of the tenancy agreement, the conditions attached to holiday lettings, the rental deposit and the rent.
1. Initial Costs
Although renting a property requires less initial outlay then buying a property there are still costs that you’ll need to take into account.
As well as paying the monthly rent you will need to pay out for:
Rental Deposit – for an unfurnished property this figure should be less than one month’s rent. For a furnished property there are no restrictions on how much a rental deposit can be.
Condition Survey – In France it is normal practice for a new tenant to pay for a condition survey before they move in. In many cases the landlord will cover half the cost.
Fees – What additional fees are payable can vary according to the type of property/rental agreement, but typically you will need to pay out for the agent/notaire used to compile your rental contract. You may also need to pay estate agent fees.
Insurance – In France although landlords take out home insurance on their properties tenants are obliged to take out a separate policy.
Cost of reconnecting utilities – In some cases properties utilities may require reconnection, generally this doesn’t cost too much and your landlord will help you sort it out.
2. Contrat de Location / Tenancy Agreement
With an annual letting a tenancy agreement must be drawn up if the property is to be the tenant’s main home. In France some landlords will come up with their own agreement, otherwise they are generally purchased from bookshops in a standard format.
If the property is unfurnished the minimum length of tenancy is three years, although this can be reduced in some cases. If a property is furnished the minimum length of tenancy is one year.
Some clauses MUST be included in a tenancy agreement, such as: name of tenant/property details/date tenancy begins/length of tenancy/fixed rent/size of rental deposit.
Other clauses, such as setting up a compulsory rent payment using a standing order or direct debit, are illegal.
Landlords are also breaking the law if they attempt to prevent you keeping a domesticated pet in the property, no matter what the length of your lease.
3. Location Saisonniere/Holiday Letting
Legally the maximum length of a holiday letting is three months.
Although landlords of holiday lettings are advised to supply a tenancy agreement they are under no obligation to do so. They are obliged however to provide potential tenants with a full property description and a clear directions regarding its geographical location.
4. Rental Deposit
In France there are three main types of rental deposit.
- Dépôt de garantie/Damage Deposit: this deposit is used by the landlord to compensate for any damage made to the property or any missed rent payments. In an unfurnished property the maximum a landlord can demand for a damage deposit is one month’s rent. There is no limit for a furnished property. In holiday lettings a damage deposit cannot be more than 20% of the total rent. After subtracting the costs of any damages or arrears the damage deposit must be returned to the tenant no later than two months after the tenancy ends.
- Les Arrhes/Booking Deposit or L’acompte/Advance Payments
These are payments made to secure a property, and are often confused.
In a long term rental a booking deposit isn’t made, so the tenant instead makes an advance payment of one month’s rent.
The situation becomes more complex in short-term rentals. In most cases a booking deposit, used to reserve a rental property for a certain time period, is lost if the tenant doesn’t take up the letting. If the landlord is the one who cancels the booking then they are responsible for refunding the money.
Neither form of payment can be higher than 25% of the total rent, and cannot be demanded over six months in advance of the date of letting.
Typically, in France landlords and tenants negotiate until they come up with an amount of rent payable which suits both parties. Legally a landlord can only increase rent if they have outlined potential rent increases/reasons for possible rental increases in the tenancy agreement.
That being said, there may be additional charges which the landlord is within his rights to impose (particularly if the property is within a block of apartments).
Although VAT isn’t charged on rent (in theory) a VAT charge can be applied to any additional charges levied by the landlord as long as they are VAT registered.
In part 3 of our rental guide we’ll go into what rates are payable on French properties, what’s involved in sole/joint tenancies and what insurances you’ll need.