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RENTING

What you should know about paying rental deposits in France

If you are looking to be either a landlord or tenant in France, you have likely experienced some confusion surrounding rental (or security) deposits. Here is what you need to know:

What you should know about paying rental deposits in France
Photo by Maria Ziegler on Unsplash

Rental deposits – either dépôt de garantie or caution in French – can be a confusing part of renting in France, both for landlords and tenants alike.

While rental deposits are not required, they are the norm. Like most things dealing with renting in France, rental deposits can be confusing for foreigners trying to make their way through the French rental system.

Here is everything else you need to know;

How much can a landlord charge?

For non-furnished rentals, a landlord can charge up to one month’s rent, excluding charges (such as electricity, gas and internet). The rental deposit cannot be increased during the course of the lease or at the time of the lease’s renewal.

For furnished rentals, landlords are allowed to charge up two months’ rent, excluding charges.

For renters with a bail mobilité – or temporary rentals lasting under ten months – the landlord is not permitted to charge a rental deposit. However, these types of contracts are only available to select groups, such as those completing professional training, students in higher education and apprenticeships, interns, volunteers working with a civic service, and those shown to be on a temporary work placement. 

When is the rental deposit first due?

The tenant must pay the rental deposit at the time of signing the lease – not before.

If the renter pays in cash, then they can ask the landlord for a receipt that certifies the amount paid for the security deposit.

When is the rental deposit due back to the tenant?

When the apartment is returned in good condition, meaning it conforms to what was agreed upon during entry walk through (état des lieux conforme), then the security deposit must be returned within one month from the day that the keys are handed over.

If the apartment is returned in a condition where it does not correspond to the entry/exit inventory and walkthrough (état des lieux non conforme), then the rental deposit must be returned within two months from the date keys are returned. 

What can a landlord deduct from a tenant’s deposit?

The landlord is able to retain either a partial sum or the whole of the rental deposit for unpaid rent or charges, and costs related to damage or repair and upkeep costs.

If the landlord makes any deductions, then they must justify doing so by giving the tenant documented proof. This might include an invoice estimates, letters of complaint regarding unpaid rents without answer, or the signed and dated exit/entry inventory.

What about the état des lieux?

This is the official inventory procedure that takes place when moving into a home or apartment that is rented.

Two copies of the initial document should be drafted – one for the landlord and the other for the tenant. The document should provide a detailed description of the accommodation, and its contents if it is furnished.

Both parties should be advised to keep these documents for the duration of the lease, as they will be used as reference during the exit inventory. 

The document should contain the date, the address, the names of the parties and their contact information, the water, gas and electricity readings, and a detailed description of the apartments floors, walls, ceilings and doors. Each party should sign both documents.

This step is very important as it describes the status of the apartment at the time of rental and can be used to dispute damages incurred during the course of the lease. 

If the état des lieux is not done on entry – either due to refusal by the renter or because both parties forgot – then it will be assumed that the dwelling is in a “good state.” If the renter wishes to contest this, they can commission a bailiff (huissier) to attest to the status of the home. 

However, if it is the landlord who refuses to conduct an état des lieux, then the tenant can send a registered letter demanding that the inventory be conducted. If the landlord still refuses, then the onus will be on him or her to prove that any repairs required are attributable to the tenant.

Steps to ensure you are protected

First and foremost – be sure to conduct a thorough état des lieux, and note any damages, however small, while doing so. If you cannot reach an agreement on the état des lieux with the other party, then you will need to seek the services of a bailiff who will provide an unbiased account of the dwelling’s status. 

Next, when in doubt, send correspondences using registered mail (lettre recommandé). Tenants must notify their landlords of their departure from the apartment or home via registered mail – with at least one month of notice for a furnished rental and within three months for non-furnished rentals. However, non-furnished rentals in metropolitan areas where there is high demand for lodging (zones tendues) have this period reduced to one month of notice. You can see if this applies to you by using the simulator HERE.

If you are the tenant, ask your landlord for ongoing quittances de loyer (receipts that rent was received). They should do this each month without your request. This will provide proof that rent was paid each month, and therefore will protect you if the landlord seeks to retain any of the deposit for unpaid rent.

While it may be tempting to not pay the final month of rent as a way to ensure that the rental deposit is returned, this is not advisable. Legally, the tenant is required to pay rent until the end of the lease. While it is true that the landlord can use the security deposit to recover unpaid rent, but in principle the rental deposit should be returned to the tenant at the end of the lease and therefore does not represent the final month of rent. 

Landlords should be advised that if the tenant fails to pay the final month of rent and it is subtracted from the security deposit, then they are not owed a quittance de loyer from that month. 

For tenants, be sure to cancel all accounts registered under your name when moving out of your home or apartment, to ensure that you will not be charged for the new occupant’s usage. 

Legal options in the case of unresolved disputes

If the landlord and tenant have unresolvable disagreements, there are a few options. You can seek mediation via a judicial conciliator (Conciliateur de justice), and they may also refer you to a bailiff. 

You can also consult both ANIL and ADIL. The former is the French National Agency for Housing Information, and the latter is the Departmental Housing Information Agency, which is available on a département by département basis.

ADIL’s mission is to provide free information to households on all matters related to housing. This is a great first step is you are seeking legal advise for a situation involving your tenant (or landlord). 

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For members

PROPERTY

What restrictions are there on foreigners buying property in France?

Purchasing property in France as a foreigner has several extra hurdles - here's a look at some of the restrictions and other challenges you will want to be aware of beforehand.

What restrictions are there on foreigners buying property in France?

There are several things to consider before buying property in France. You may want to visit the area during different seasons to be sure that you enjoy it rain or shine, and you will want to consider how much you would end up paying in property taxes, as well as whether or not it will be a main residence or second home.

The law

Let’s start with the good news – there are no official rules in France against non French-citizens purchasing property, neither is there any requirement to be resident in the country in order to buy property – indeed foreign second-home owners make up a small but significant slice of the property market.

Revealed: Where in France do foreigners buy second homes

But in practice there are a number of challenges foreigners face when buying French property, especially if they need a mortgage.

Property sale process

Before making your decision, learn the steps to buying property in France and the expected timeline.

Roughly, there are five steps: making your offer, a cool-off period, signing a ‘Compromis de Vente‘, providing the notary (notaire) with your deposit, and signing the ‘Acte Authentique de Vente‘ (deed).

READ MORE: How long does it normally take in France to buy a property?

The French property purchase system is likely to be different to what you are used to – especially the role of the notaire.

Also Americans might be surprised to learn that in contrast to the US system of having a realtor who guides you through the entire process, in France – as in most of Europe – buyers are expected to do much work of the house-hunting work themselves.

Bureaucracy

There are a few extra steps added if you need a mortgage, but generally all foreign buyers should be prepared to have a valid ID (passport), as well as other documents including your marriage and/or divorce papers (to demonstrate your civil status).

At some point in the process, you will need to open a French bank account, even if that ends up just being for utilities after you’ve made the purchase. The earlier you can open a French bank account, the better.

You should know that purchasing property in France does not automatically give you residency rights. If you are not an EU citizen, then you will need a residency card or visa to spend extended time in France.

READ MORE: EXPLAINED: What type of French visa do you need?

Getting a mortgage

While there are no laws stopping foreigners from buying property in France for most people the biggest obstacle is getting a mortgage, as there are conditions that many foreigners cannot fulfil.

In France, the vast majority of loans are guaranteed by banks, and one bank’s offer to you may not be the same as another’s. You are free to contact several banks to find the best offer for your situation.

READ MORE: French property: How to get a mortgage in France

While there are alternative options besides banks, such as a ‘vendor loan’ (prêt vendeur) – where one sets up a credit contract directly with the seller of the property via a notary – this is much less common.

The biggest issue is that banks will require that foreigners prove that they will be able to legally remain in France for the entirety of the repayment period. As such, it can be very challenging those on short-term residency cards, to be accepted for a mortgage loan.

For the same reason, it is very difficult for non-residents to get a mortgage via a French bank.

Foreigners can also consider international options, or independent, specialised mortgage brokers, like those geared toward expats – however some have minimum income levels and minimum property purchase prices.

Another point to keep in mind is the fact that French banks also look favourably on ‘stable’ employment statuses, such as CDI (indefinite) work contracts, which, by their calculation, reduce risk of unemployment. It’s not impossible to get a mortgage if you are self-employed, but it’s harder.

Additionally, age can be a factor – lenders tend to be less likely to award mortgages to those nearing or above retirement age.

Americans – The situation is even more challenging for Americans in France, as banks can be reticent about working with Americans due to FATCA – which, according to the US dept of treasury, requires that “foreign financial institutions (FFIs) report to the IRS information about financial accounts held by US taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest.”

This has forces French banks to collect and maintain more information about their American customers. If the banks fail to disclose information to the IRS, they risk exclusion from the US market as well as penalties.

In a survey about the effects of citizenship-based taxation on Americans in France, one respondent said: “Multiple banks have denied me a mortgage because I am American.

“We used the services of a mortgage broker and when we went in for the final presentation a few weeks ago, only one out of the many banks queried offered us a mortgage, and it wasn’t even a good offer.”

READ MORE: Divorce, stress and fines: How citizenship-based taxation affects Americans in France

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