The legal framework for compensating commerciality titles
According to Article L 631-7 paragraph 6 of the French Construction and Housing Code, amended by Law No. 2014-366 of 24 March 2014 on access to housing and renovated urban planning, known as the “ALUR Law”:
“The repeated letting of furnished premises intended for residential use for short periods to transient customers who do not elect domicile there constitutes a change of use within the meaning of this article.”
As a result, accommodation used for short-term furnished rental (such as Airbnb) must undergo a change of use from residential to commercial.
In certain municipalities, in accordance with article L 631-7-1 paragraph 1 of the French Construction and Housing Code:
“Prior authorisation for change of use is granted by the mayor of the municipality in which the building is located, after obtaining the opinion of the relevant arrondissement mayor in Paris, Marseille and Lyon. Authorisation may be subject to compensation in the form of the simultaneous conversion of premises used for other purposes to residential use.”
Compensation is a form of exchange between:
- An owner who creates a new residential use surface;
- And another owner who wants to convert a residential property into a commercial property, in particular for short-term furnished rental.
The exchange relates to what are now known as “commerciality titles”: the owner wishing to create a commercial area will compensate the residential area removed with that created by the other owner.
This compensation is accompanied by the payment of a price: there is in fact a market for commercial titles in which demand for commercial space is high.
Our multilingual team of lawyers, specialised in commercial and business law, can assist you with these issues.
