Although it is customary to formalize the terms of a rental in a lease agreement, whether for empty or furnished accommodations, the signing of a lease agreement between the lessor (owner) and the lessee (tenant) is not mandatory. That said, it allows to establish the bases and the commitments of each party.
There are several types of leases, depending on the type of accommodation and the tenant.
In this article we will answer several questions:
- What is a lease?
- What are the different possible leases when renting an apartment ?
- What are their durations? Their terms of notice and termination? How are they renewed ?
We often hear about “rental lease” or ” renting lease ” but you should know that it is a pleonasm. In fact, the word lease is already synonymous with rental contract. The rental lease therefore conveys the same idea twice. It is therefore advisable to use the expression rental agreement, or simply the word lease.
What is a lease?
A lease is a contract in which one party (the lessor) agrees to provide the lessee (the tenant) with the use of property for a price, which the lessee agrees to pay for a period of time.
Although a verbal lease agreement may be considered legally acceptable, a written document will make it easier to determine the obligations of each party.
The lease will contain information such as the names of the parties, the amount of rent and how it will be adjusted, a description of the property and general conditions.
It is very often accompanied by an inventory of fixtures which will be carried out at the time of taking possession of the rented premises.
The ALUR and ELAN laws (in french) have brought many changes to the various leases since their publication in 2014 and 2018.
Let’s take a closer look at what the main types of leases are, how long each one lasts, how they are formed and under what conditions. We will also see how to terminate them.
Real estate law distinguishes 2 main families of leases. On the one hand, there are the leases known as residential leases. There are 6 different types of leases:
- The unfurnished lease
- The furnished lease for the tenant’s main residence
- The furnished lease for a secondary residence for the tenant
- The student lease
- The mobility lease
- The holiday lease
On the other hand, there are commercial or professional leases.
The unfurnished lease
As its name indicates, this type of lease concerns an apartment that is rented without furniture. The unfurnished leases are governed by the laws of July 6, 1989 and Alur of 2014.
The legal duration of the lease is 3 years, at the end of which, when the lease comes to an end, it will be renewed tacitly for the same duration without you having to sign a new lease.
Please note: the duration of the lease, when it is granted to a legal entity, will be 6 years.
What is the rent for an unfurnished lease ?
There is a ceiling on the rent for all apartments located in a high demand area.
What are the agency fees for an unfurnished lease for an apartment located in a tense area ?
The agency fees charged to the tenant are limited to 12 € per square meter and correspond to the services related to the visit, the constitution of the file and the drafting of the lease. In addition to these 12 €, there is an amount of 3 € per square meter for the inventory of fixtures on arrival.
As for the owner’s agency fees, the amount must be at least equal to those charged to the tenant and are not limited.
How long is the notice period for a non-furnished lease ?
The notice period is 3 months for the tenant, except in the so-called tense areas where the notice period is only one month.
As for the landlord, they must inform their tenant at least 6 months before the anniversary date of the lease contract.
If the property is located in a tense area, the rent will be capped with a maximum rent per m².
Furnished leases
The furnished lease as a principal residence for the tenant
If the apartment is furnished and it is the tenant’s main residence, then it is appropriate to sign a furnished lease as a main residence.
As a reminder, a principal residence is a dwelling where a family, or a taxpayer, lives and where the center of their material and professional interests are located. A dwelling is also considered to be a principal residence when the occupant stays there for more than 8 months during the year.
To know: It seems obvious from the previous reminder, but it is impossible to have 2 main residences.
What is the duration of a furnished lease for a principal residence ?
Just like the empty lease, this furnished lease is governed by the ALUR law. That said, unlike the empty lease which has a duration of 3 years renewable, the furnished lease is shorter. This is one of the reasons why many apartment owners in Paris opt for this type of lease.
Indeed, the duration of the lease for an apartment that is the tenant’s main residence is one year. The contract will then be renewed tacitly every year for a period of one year.
It is important to understand that it is logically not possible to provide for leases with durations shorter than one year, except if the tenant is a student, if the lease is in the name of a company (but in this case it will no longer be a lease for a principal residence), if your tenant is in a situation of mobility (internship, training, temporary mission), or if it is a short-term rental called holiday rental and the tenant already has a principal residence.
We will see all these particular cases in detail later in this article!
The furnished lease for a principal residence is the most widely used rental contract in France. It is fiscally more favorable as all furnished rentals, the shorter lease duration offers more flexibility to the owners and the rents are more advantageous.
What is the notice period for a furnished lease ?
The notice period to be respected by the tenant for a furnished lease in a principal residence is 1 month.
The owner will have a period of 3 months to respect. He must send his tenant a registered letter at least 3 months before the anniversary date of the contract to inform him that he wishes to terminate the lease between him and his tenant.
The owner can only give 3 reasons for this, without which he cannot terminate the lease:
- the sale of the apartment,
- the repossession of the apartment for personal purposes or for a close member of his family (ascendant or descendant),
- a legitimate and serious reason (in case of fault of the tenant).
The amount of the security deposit must not exceed 2 months’ rent excluding charges.
What rent for a furnished ALUR-type lease that constitutes the tenant’s primary residence?
Since 2018, in certain areas, rents can be framed by law, which is notably the case for the city of Paris. If you would like more information, go to our article “Rent control in Paris, the rules to follow“. The rent is thus limited per square meter.
What are the agency fees for this one-year renewable furnished lease, which is the tenant’s main residence?
Agency fees are regulated and cannot be charged in full to the lessee, as has long been the norm in France. Thus, from now on, the amount must be divided between the tenant and the owner, the lessee and the lessor.
In no case can the amount charged to the tenant be higher than the amount charged to the owner, knowing that it is 12 € per m² for the drafting of the lease and the administrative procedures and 3 € per m² for the inventory of fixtures.
The lease of a secondary residence for the tenant
The term “secondary residence of the tenant” refers to any accommodation that is not the tenant’s main residence.
This type of lease is excluded from the scope of the law of July 6, 1989. It is therefore a lease in its own right.
Contrary to a lease for a principal residence, you will benefit from a great freedom in terms of duration, rent, rental periods, security deposit.
What is the rent for an unfurnished lease ?
There is no ceiling on the amount of rent.
What are the agency fees for a secondary residence lease, civil code ?
Agency fees are not limited or regulated.
When is it possible to offer a second home contract to a tenant?
It will be possible to sign a second home contract for the tenant in the following cases:
- the tenant already owns a primary residence elsewhere in France: the apartment he/she is renting will then be considered as a pied-à-terre,
- the lease is in the name of a company: by definition, a company being considered as a legal entity, it will not be able to establish its principal residence in the rented accommodation. It will then be appropriate to establish a contract with the company as a secondary residence, often called a corporate housing or company lease.
The student lease
This type of lease is only for students and can only be signed in the context of a furnished rental. In other words, there is no unfurnished lease for students.
The student lease is considered as an alternative to the so-called “classic” rental lease. It is subject to the same conditions of the law of July 6, 1989, whether it is a question of rent limitation or agency fees.
What is the duration of a student lease ?
Its main characteristic is its duration. Indeed, it will be of 9 months against one year for a classic furnished lease.
Moreover, contrary to the classic furnished lease, the student lease will not be renewed tacitly at the end of the 9 months.
This formula may be of interest to landlords who wish to recover their property during the summer. As far as students are concerned, it allows them to rent a property only during the school period.
Please note: the student lease is for an incompressible period, which means that it will not be possible to conclude a lease for a period shorter or longer than 9 months. In case of extension, a classic furnished contract will have to be proposed.
Like the furnished lease, the notice period for the tenant is one month if they wish to leave the apartment before the lease expires.
This is a lease that is often appreciated by landlords who do not wish to commit themselves to leases with unknown end dates.
What is the rent for an unfurnished lease ?
The rent is capped for all apartments located in a tense area.
What are the agency fees for an unfurnished lease for an apartment located in a tense area ?
The agency fees charged to the tenant are limited to 12 € per m² plus 3 € per m² for the inventory of fixtures at the beginning of the lease. As for the owner’s agency fees, the amount must be at least equal to those charged to the tenant and are not limited.
The mobility lease
This is one of the key measures of the ELAN law. The creation of the mobility lease aims to put an end to the problem of the medium-term lease. This type of lease is therefore intended for temporary rental and is intended for people in mobility. The mobility lease precisely offers this solution.
Who can sign a mobility lease?
The mobility lease is governed by clear regulations. It is not possible to sign such a lease with just any tenant. Indeed, the latter must be in one of the following conditions:
- be on a temporary assignment as part of his professional activity,
- be on a transfer or professional training,
- be on an internship or apprenticeship contract.
What rent for a mobility lease ?
The rent is not free as it can be for a civil code lease. The rent will be controlled and capped as it is for leases on a primary residence if the apartment is located in a tight area.
What are the agency fees for the mobility lease ?
Just as for furnished leases that are the tenant’s primary residence, agency fees are regulated. They are 12€ per m². As for the owner’s agency fees, the amount must be at least equal to those charged to the tenant.
What is the duration of a mobility lease ?
The rental period for this type of lease is from 1 to 10 months. At the time of signature, the owner and the tenant will determine the duration of the lease. At the end of the 10-month lease, the owner does not need to give notice to the tenant. The tenant is not firmly committed and can terminate the lease at any time with a one-month notice.
It will not be possible to extend the mobility lease (unless the lease granted at the beginning is less than 10 months). Therefore, at the end of the lease and if the tenant wishes to stay, you will have to offer him a classic furnished contract of one year renewable by tacit agreement (or a student lease of 9 months if your tenant is one and if he has the possibility of it of course).
This type of contract does not allow the tenant to be asked for a security deposit, but the landlord can ask for the tenant to benefit from a Visale guarantee. To do so, the tenant must go to the visale.fr website to submit his or her request for a guarantee.
This lease is therefore also very suitable for landlords who do not wish to grant a contract for too long a rental period.
The holiday lease
Duration of the holiday lease
This is a short-term lease that is often intended for tourists or people staying in Paris for a few days for professional reasons. This type of lease is governed by articles 1713 and following of the civil code. Due to the increasing demand and its facilitation with the arrival of platforms such as Airbnb, VRBO or Booking, the so-called short-term seasonal rental is now restrained by the regulations in force.
We have written a complete article on furnished seasonal rentals in Paris. Do not hesitate to visit it for more information on the matter.
Concerning the lease itself, its duration can never exceed 120 days and will not be renewable.
It is a contract from date to date, so the tenant will leave the accommodation at the end of his stay. The lease may be extended, but only if the total duration of the lease does not exceed 90 days. The extension will then have to be submitted to the owner’s consent.
Summary of the different leases in tense areas
In this article we have tried to be as exhaustive as possible on the nature and specificities of the different furnished rental contracts. However, we understand that you may have additional questions that we have not answered in this article. So, don’t hesitate to let us know if you have any further queries, we will be happy to help you in the process of renting your apartment.