Renting property in France can be complex, especially for expatriates and corporate tenants unfamiliar with local regulations. Two main legal frameworks govern lease agreements: the ALUR Law, which aims to protect tenants by capping rent and agency fees for standard residential leases; and the Civil Code, which allows greater contractual freedom to the property owner. Understanding these distinctions is crucial for making informed leasing decisions.
First Case: ALUR Law and Regulated Agency Fees
The ALUR Law, introduced in 2014, was designed to create a fairer rental market by regulating rent and real estate agency fees for residential leases. The real estate agency fees, shared between the landlord and tenant, cover services such as property viewings, lease drafting, and move-in inspection.
Tenant’s Costs under the ALUR Law:
- Viewings, application processing, and lease drafting: Capped based on location, expressed in euros per square meter of living space:
- Highly tense areas (e.g., Paris): €12/m²
- Tense areas: €10/m²
- Rest of the country: €8/m²
- Move-in Inspection: Also shared between tenant and landlord, with a maximum cost of €3/m².
By imposing these caps, the ALUR Law aims to limit excessive fees and make renting more affordable for tenants.
Second Case: Civil Code and Contractual Freedom
Lease agreements that fall outside ALUR regulations, such as, but not limited to, corporate leases, furnished rentals, and secondary residences, are governed by the Civil Code, offering more flexibility to the property owner.
Key Features of Civil Code Leases:
- Contractual Freedom: Lease terms and agency fees are freely negotiated between the property owner and the real estate agency, without legal caps.
- Agency Fees: Typically expressed as a percentage of the annual rent (excluding taxes and charges), generally ranging between 10% and 16% (excluding VAT).
- Included Services: These fees usually cover tenant search, lease negotiations, contract drafting, move-in inspection.
Market Evolution and the Shift Toward Civil Code Leases
Since the ALUR Law’s implementation in 2014, the rental market has adapted, with a growing number of landlords and agencies shifting toward Civil Code leases. By 2023, many real estate agencies in Paris had transitioned to this model, making the market more supply-and-demand driven. While this practice is tolerated, it contradicts the initial purpose of the ALUR Law.
Why Work with a Relocation Expert?
Navigating the French rental market can be challenging, particularly for expatriates and corporate clients unfamiliar with local laws and practices. A professional relocation company like Eres Relocation ensures a smooth leasing process by providing expert guidance on choosing the right lease type, negotiating terms, and securing the best conditions. Our team specializes in helping individuals and businesses find suitable accommodations while ensuring compliance with local regulations.
Need assistance with your relocation or leasing process? Contact us today to learn how we can help!
