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ALUR LAW After regulating rents in certain urban areas, the Government has introduced other measures in favor of tenants as well as modifications to the operation of  condominiums  .

The Alur law on real estate introduces important changes for tenants and landlords.

This is the objective of the law on access to housing and renovated town planning, known as the Alur law , which is an in-depth reform of French housing law.

The Alur law was published in the Official Journal on March 26, 2014. However, the measures it contains did not all enter into force on the same date.

* Entry into force of the Alur law:

Voting and publishing

Voted by the National Assembly at the beginning of 2014, the text was then adopted by the Senate on January 31, 2014. However, the provisions voted by the Senate contained certain discrepancies with the text adopted by the Assembly. Consequently, a joint committee had to draw up a compromise text which Parliament finally adopted after a vote by the Senate on February 20, 2014.

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

The Alur law was thus published in the Official Journal of March 26, 2014. It takes the official name of Law No. 2014-366 of March 24, 2014 for access to housing and renovated urban planning. You can download the full text of the Alur law online.

* Date of application :

While certain provisions of the law are currently in force (such as the capping of agency fees, the extension of the winter break or the reduction of the limitation periods applicable to unpaid rents and charges), others still have to wait for the implementing decrees come into force.

The application of certain provisions of the law is also deferred in time.

* Rent control:

In line with the latest measures, the Alur law provides for the establishment of a rent observatory in “tight” areas in order to set geographical ceilings. In the event of non-compliance by the owner, the tenant may refer to the conciliation commission.

On the basis of representative data on the rents charged produced by rent observatories, the prefect of the department will issue an order each year which will set, for each category of housing and by district, three rent indicators: • a median reference rent calculated at from
the “stock” of all existing rents, which will immediately place it well below the level at which dwellings are currently rented or re-let in the area concerned • an
increased median reference rent, the level of which will be set each year, by decree, in each territory and which may not exceed the median reference rent by 20%, which will create the interval for free setting of rents
• a reduced median reference rent, 30% lower than the median rent. Below this level, the landlord can request a reassessment of the rent.

The particular case of Paris:-

It is in Paris that these new rent control rules will first be applied. This framework comes into force on August 1, 2015 in the capital. The maximum amounts were set by the order regulating rents in Paris signed by the prefect of Paris and Ile-de-France on June 26, 2015. Subsequently, other conurbations may adopt these measures. when they are ready to put them in place (See Duflot rent control areas).
* New lease contracts:

The rent excluding charges fixed in the contract for new rentals or re-lettings cannot exceed the median reference rent increased. The median rent and the median plus rent must appear in the lease, for the tenant’s information.

* Exceptional rent supplement:

For certain dwellings with exceptional characteristics that will have to be justified in the lease (large terrace, exceptional ceiling height), 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 of requesting a reduction or cancellation of this additional rent. This request will necessarily include, in the first place, an amicable phase formalized by an attempt at conciliation. Once these steps have been completed and in the event of failure of the amicable phase, the tenant’s request may be brought before the judge who will determine, if necessary, the reduction of the additional rent.

* Lease renewal:

When renewing a current lease, if the tenant lives in a dwelling located in an area concerned by the device and whose rent is higher than the increased median rent, he can act to reduce the rent as soon as the rent is higher than the rent median. plus reference rent.

On the contrary, the possibility is also created for the lessor to lodge an appeal for reassessment of the rent if the rent applied until then is lower than the reduced median reference rent, with the possibility of spreading the increase for the tenant.

The tenant or the owner must express his wish to see the rent change with his co-contractor at least 6 months before the date of renewal of the lease.
In the event of disagreement between the parties on this rearrangement, there is provision for an amicable procedure for the settlement of the dispute before the departmental conciliation commission. Then, in case of failure of the conciliation procedure, it will be possible to seize the judge.

* Notice period:

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

– Tense area:

In cities in tight 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 high demand for housing (Paris of course, but also many medium-sized provincial towns) and in which 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 notice.
Until August 8, 2015, this new rule only concerned lease contracts signed on or after March 27, 2014. Leases signed before this date were therefore not affected. But the Macron law of August 2015 removed this distinction: from now on, the reduction of the notice period is applicable for all accommodation located in cramped areas, regardless of the date of signature of the rental contract.

– Disabled:

From now on, the law also allows people who receive the AAH to benefit from the notice period reduced to one month.
– Health :

All persons whose state of health, attested by a medical certificate, justifies a change of residence may also benefit from a reduction in their notice period for leaving their accommodation.

* Standard lease contract:

The Alur law provides for the establishment of a standard rental contract model. Newly drafted lease agreements must comply with the content of this model. However, it will still be possible to add certain clauses to this standard model.

The Alur law also establishes a mandatory information notice to be given to the tenant when concluding the lease contract. It must be attached to the rental contract. Intended to better inform tenants and owners of their respective rights and obligations, this notice is included in the decree of May 29, 2015.

* Proof of Income:

The law has also established an exhaustive list of documents that a landlord may require in a rental file. This measure has been applicable since the publication of Decree No. 2015-1437 of November 5, 2015 setting the list of supporting documents that may be requested from the candidate tenant and his surety.

* Universal rental guarantee:

The Alur law provides for the creation of a universal rental guarantee (GUL) for all private accommodation (bare and furnished rentals) and owners (individuals and legal persons). Its financing should result from the levy of a percentage of the rent, of the order of 1 or 2% of its amount, paid in equal parts by the owner and the tenant.

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

* Penalties for late rent:

The law provides that the owner and the tenant have the possibility of providing in the lease contract that late rents may give rise to the payment of late payment penalties of up to 30% of the amount of the rent.

* Return of the security deposit:

The law currently provides for a maximum period of two months from the handing over of the keys for the owner to return the security deposit paid by the tenant. The Alur law provides that this period is reduced to one month as soon as the exit inventory conforms to the entry inventory. In the absence of restitution within the legal deadlines, the owner may suffer a penalty of 10% of the amount of the security deposit per month of delay.

* Agency costs :

When a real estate agent intervenes during the rental of a property, the amount of his fees is now better regulated (see the rules for calculating agency fees in the event of rental). Since September 15, 2014, the amount of agency fees has been capped by decree. The regulations now set a maximum price limit based on the living area of ​​the rented accommodation.

In addition, the tenant must pay only his share of the costs of drafting the lease, visiting the accommodation, compiling the file and inventory. These costs will be shared equally between the tenant and the lessor.

* Limitation periods:

The law has modified the limitation periods applicable to the payment of unpaid rents 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 time limit increases to 1 year with regard to the annual reassessment of the rent according to the IRL.
* Winter vacation :

The winter break, during which tenants subject to an eviction order cannot be evicted from a dwelling, was previously fixed each year from November 1 to March 15. The Alur law has extended this annual duration until March 31.

* Reform of real estate agents:

The training of real estate agents would be strengthened with the creation of a national real estate management council and the development of a code of ethics.

* List of merchants:

Long in the sights of public authorities, often rightly so, “list traders” will be subject to additional obligations. In particular, they will have to hold an exclusive mandate for the goods they offer to their customers.

* Trustees of co-ownership:

The law now establishes a standard trustee contract, the content of which was set by decree no. 2015-342 of March 26, 2015. This new model is applicable to trustee contracts signed or renewed as of July 1, 2015.

This text also strengthens the framework for trustees’ fees. The list of special costs invoiced in addition to the annual flat rate is specified in appendix 2 of the decree. All other services not included in this list are deemed to be “day-to-day management” and cannot be subject to additional billing outside of the annual flat rate.

In addition, the opening of a separate account in the name of the co-ownership will be mandatory.
Finally, from April 1, 2016, tenants must be informed by the trustee of the decisions taken during general meetings of  co-ownership  .

DAMY Law Firm