Monday, March 3, 2014

New French property legislation

Then French government has finally approved legislation which offers even more security for tenants in unfurnished properties in certain designated cities, including Paris, Marseille and Lille and several designated towns where housing is considered critical. There is also some help for landlords in the private sector with plans for a state funded insurance guarantee against unpaid rentals, for a maximum of 18 months and starting from January 2016.

Within the designated towns, local authorities will determin a mean rental to be applied to different property types (studio, two rooms etc) and by quartier , which will become the standard. The housing minister C├ęcile Duflot predicts that this will lead to widespread rent r├ęductions. The new leglislation clarified what information a landlord may ask a prospective tenant to supply before offering a rental contract.

Mme Duflot has also attacked the lucrative short-term rental market, composed of the many attractive furnished studios and small apartments, currently rented for as little as a seekend to tourists in cities such as Paris. These rentals are extremely popular with visitors as an alternative to hotels but have caused problems in blocks occupied by a mix of long-term residents and short-term renters. Tourist hotels have also complained of loss of trade. The right wing newspaper Le Figaro has suggested there will be a large-scale exit of investors in this type of property to countries such as Spain with more flexible regimes. If so this may free up a number of desirable small properties in central Paris.