The Alur Real Estate Act introduces important changes for tenants and landlords. After rent regulation in some urban areas, the Government introduced other measures for tenants and changes in the functioning of condominiums. This is the objective of the law for access to housing and a renovated urbanism, known as the Alur law, which radically reformed French housing law.

The Alur Law was published in the Official Gazette on 26 March 2014. However, not all the measures contained in the proposal have entered into force on the same date.

Entry into force of the Alur Act: Voting and publication Voted by the National Assembly in early 2014, the text was then adopted by the Senate on January 31,2014. However, the provisions voted by the Senate contained some discrepancies with the text adopted by the Assembly. As a result, a joint joint committee had to draw up a compromise text which Parliament finally adopted after a vote in the Senate on 20 February 2014.

Following an appeal by deputies and senators against the text, it was examined by the Constitutional Council, which, by a decision of 20 March 2014, validated the main measures provided for by the Alur law and deemed them to be in conformity with the French Constitution.

The Alur law was published in the Official Gazette on 26 March 2014. It takes the official name of law n°2014-366 of March 24,2014 for access to housing and a renovated urbanism. You can download the full text of the Alur Act online.

Date of application: While some provisions of the law are currently in force (such as, for example, the capping of agency fees, the extension of the winter truce or the reduction of limitation periods for unpaid rents and charges), others have yet to become effective through implementing decrees.

The application of certain provisions of the Act is also deferred over time. Rental supervision: In line with the latest measures, the Alur law provides for the establishment of an observatory of rents in "tense" areas in order to set geographical ceilings. In case of non-compliance by the landlord, the tenant can refer the matter to the conciliation commission.

Based on the representative data of the rents practised produced by the observatories of rents, the Prefect of the department will take every year an order which will fix, for each category of housing and per district, three indicators of rents: a median reference rent calculated on the basis of the "stock" of all existing rents, which will immediately place it well below the level at which the housing units are currently rented or re-let in the area concerned. an increased median reference rent, the level of which will be fixed each year, by decree, in each territory and which may not exceed 20 % above the median reference rent, which will create the interval at which the rents may be fixed freely. a median reference rent less than 30% of the median rent. Below this level, the landlord may request a reassessment of the rent.

The special case of Paris: It is in Paris that these new rules governing rents will be applied first. This framework comes into force on 1 August 2015 in the capital. The maximum amounts were set by the decree on the framework of rents in Paris signed by the prefect of Paris and Ile-de-France on 26 June 2015. Subsequently, other agglomerations will be able to adopt these measures when they are ready to implement them (see the Duflot rents management zones). New lease agreements:

The rent excluding charges fixed in the contract for new rentals or relocations shall not exceed the median reference rent plus. The median rent and the increased median rent will have to be included in the lease, for the information of the tenant.

Extraordinary rent supplement: For certain dwellings with exceptional characteristics that will have to be justified in the lease (large terrace, height under exceptional ceiling), the contract may derogate from this ceiling by charging an exceptional rent supplement to the rent. In this case, the tenant will have, within 3 months following the signing of the lease, the possibility to ask for a reduction or cancellation of this rent supplement. This request will necessarily include, in the first instance, an amicable phase formalised by an attempt at conciliation. Once these steps have been taken and in the event of failure of the amicable phase, the tenant's request can be brought before the judge who will determine, if necessary, the reduction of the rent supplement.

Lease renewal: When renewing an existing lease, if the tenant resides in a dwelling located in an area covered by the scheme and whose rent is higher than the increased median rent, he/she may initiate a recourse in reduction of the rent as soon as the rent is higher than the increased median reference rent.

Conversely, the landlord is also entitled to lodge an appeal for a reassessment of the rent if the rent hitherto applied is lower than the median reference rent less, with a possibility of spreading the increase for the tenant.

The tenant or landlord will have to express his wish to see the rent evolve to his contracting partner at least 6 months before the date of renewal of the lease. In the event of disagreement between the parties on this readjustment, an amicable settlement procedure is provided for before the departmental conciliation commission. Then, if the conciliation procedure fails, it will be possible to refer the matter to the judge.

Period of notice: The Alur law introduces new cases allowing the tenant to benefit from a reduction (from 3 months to 1 month) of his notice period to leave the accommodation.

Tensioned area: In cities in tense areas, the notice period for tenants wishing to terminate their lease is reduced to one month, compared to three months normally. These tense areas concern cities with a high demand for housing (Paris of course, but also many medium-sized provincial cities) and where landlords have, a priori, little difficulty in finding a tenant after the departure of the previous one. For more information, see tense area and one month's notice. Until August 8,2015, this new rule only applied to leases signed on or after March 27,2014. Leases signed before that date were therefore not affected. But the Macron law of August 2015 abolished this distinction: henceforth, the reduction of the notice period is applicable to all dwellings located in tense areas, regardless of the date of signature of the lease contract.

Disabled people: The law now also allows those affected by AAH to benefit from the reduced notice period of one month. Health: All persons whose medical condition, confirmed by a medical certificate, justifies a change of residence may also benefit from a reduction in their notice period to leave their accommodation.

Standard lease agreement: The Alur law provides for the introduction of a model lease agreement. Newly drafted lease agreements must comply with the content of this model. However, it will still be possible to add some clauses to this model. The Alur law also establishes a mandatory notice of information to be given to the tenant upon conclusion of the lease contract. It must be attached to the rental contract. Intended to better inform tenants and landlords about their respective rights and obligations, this notice is included in the decree of May 29,2015.

Proof of income: The law has also introduced an exhaustive list of documents that a landlord may require in a rental file. This measure is applicable since the publication of decree no. 2015-1437 of November 5,2015 establishing the list of supporting documents that can be requested from the candidate for the rental and his deposit.

Universal rent guarantee: The Alur law provided for the creation of a universal rent guarantee (GUL) for the entire private park (lease and furnished) and lessors (individuals and legal entities). Its financing should result from the levying of a percentage of the rent, in the order of 1 or 2% of its amount, paid equally by the landlord and the tenant.

This universal rent guarantee was originally intended to replace the guarantee by 1 January 2016. But the GUL was finally abandoned. It has been replaced by a scheme financed by Housing Action (formerly 1% Logement): the Visal guarantee against unpaid rents, intended for young or precarious employees whose income does not exceed a certain ceiling.

Penalties for late payment of rent: The law provides that the landlord and the tenant have the possibility to provide in the lease contract that rent delays may give rise to late payment of penalties of up to 30% of the rent.

Return of the security deposit: The law currently provides for a maximum period of two months from the handing over of keys for the landlord to return the security deposit paid by the tenant. The Alur law provides to reduce this period to one month if the inventory of fixtures and fittings is in conformity with the inventory of fixtures and fittings. In the absence of restitution within the legal deadlines, the owner could suffer a penalty of 10% of the amount of the deposit per month of delay.

Agency fees: When a real estate agent intervenes during the rental of a property, the amount of his fees is now better regulated (see thus the rules for calculating agency fees in case of rental). Since September 15,2014, the amount of agency fees has been capped by decree. The regulation now sets a maximum price limit based on the living space of the rented apartment.

In addition, the tenant only has to pay his share of the costs of drafting the lease, visiting the accommodation, compiling the file and the inventory of fixtures. These costs will be shared by half between tenant and lessor.

Limitation periods: The Act amended the limitation periods for the payment of unpaid rent or charges. Whereas previously, the time limit for claiming these sums was set at 5 years, it is now reduced to 3 years. In addition, the deadline is extended to 1 year for the annual re-evaluation of the rent according to the IRL. Winter truce:

The winter truce, during which tenants subject to eviction orders cannot be evicted from a dwelling, was previously set each year from 1 November to 15 March. The Alur Act extended this annual period until 31 March.

Real estate agent reform: The training of real estate agents would be strengthened with the creation of a national council for real estate management and the drafting of a code of ethics.

List merchants: For a long time in the public authorities' viewfinder, often rightly so,"list merchants" will be subject to additional obligations. In particular, they will have to hold an exclusive mandate on the goods they offer to their clients.

Co-ownership trustees: The law now introduces a standard trustee contract, the content of which was set by Decree No. 2015-342 of 26 March 2015. This new model is applicable to trustee contracts signed or renewed as of July 1,2015.

This text also strengthens the supervision of trustees' fees. The list of special charges invoiced in addition to the annual flat rate is set out in Annex 2 of the Decree. All other services not included in this list are deemed to be "routine management" and cannot be billed in addition to the annual fee.

In addition, the opening of a separate account in the name of the condominium will be compulsory. Finally, as of April 1,2016, tenants must be informed by the trustee of the decisions taken at co-ownership meetings.

Lawyer Nice-Société d' Avocats DAMY-2016