Undervalued rental of a dwelling: increase on renewal of the lease

Verified 24 August 2022 - Directorate for Legal and Administrative Information (Prime Minister)

Where the rent is understated in relation to market prices, the owner of the dwelling may increase the rent at the time of the lease renewal, subject to certain conditions. The steps to be taken differ depending on whether the municipality is located in stretched area.

Warning  

In some municipalities, specific rules apply, which are not presented here. It's about Paris, Lille, Hellemmes and Lomme, Lyon and Villeurbanne, Montpellier, Bordeaux and the municipalities making up Common plain and Is Together

To find out whether or not your municipality is in a tense area:

Verify that a dwelling is in a stretched area

FYI  

Some dwellings are not covered by the rent controls because they are subject to other rules. These are the dwellings subject to the 1948 law or contracted by the Anah (excluding intermediate rent agreements), social housing (HLM), furnished tourist goods and subleases.

Stretched area

The rule is different depending on when the lease is renewed:

Since August 24, 2022

In metropolitan France, when the lease concerns a dwelling classified F or G (class indicated on the DPE: titleContent), it is forbidden to increase the rent obviously undervalued.

FYI  

In Guadeloupe, Martinique, French Guiana, Reunion and Mayotte, the landlord freely sets the rent, regardless of the class of the accommodation. This rule is valid until 1er July 2024.

Before August 24, 2022

In metropolitan France, the landlord can increase the rent provided that the house meets an energy performance criterion. The consumption of primary energy in the dwelling shall be less than 331 kWh per m2 and per year. One energy performance diagnosis less than 4 years old must attest to this.

Estimate undervaluation

The undervaluation of rent is estimated by comparison with rents in the neighborhood for comparable dwellings.

These dwellings must be situated in the same group of buildings or in another group of buildings with similar characteristics and located in the same geographical area.

If the municipality is part of a conurbation of more than one million inhabitants, the owner must identify at least 6 rents.

If the municipality is in another geographical area, the owner must identify at least 3 rents.

At least 2/3 of these references must correspond to rentals for which there has been no change of tenants for at least 3 years.

Each reference shall contain the following information:

  • Street name
  • Partial indication of the building number (by ten),
  • Quality and time of building construction
  • Floor of the accommodation and possible presence of an elevator
  • Living area of the dwelling and number of living rooms
  • Existence of possible annexes
  • Condition of the equipment, including running water, indoor toilet, shower room, heating
  • Period of construction of the building
  • Indication that the tenant has been in the premises for at least 3 years
  • Amount of monthly rent excluding charges actually charged

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General case

Certain references (period of construction of a building, type of dwellings...) can be obtained from the network of local rent observatories.

Department 78, 91, 92, 93 or 94

Certain references (period of construction of a building, type of dwellings...) can be obtained from the network of local rent observatories or the rent observatory of the Paris agglomeration (Olap).

Calculate new rent

The proposed new rent should be calculated from rents in the neighborhood for comparable dwellings.

However, the proposed increase must not exceed the higher of the following 2 limits:

  • 50% the difference between the rent which corresponds to the rents charged in the neighborhood for comparable dwellings and the last rent applied to the tenant before the renewal of the lease (possibly revised if this has not been done)
  • An increase in the annual rent equal to 15% of the actual cost of improvement work or retrofitting carried out since the last renewal of the lease if the amount of the work is at least equal to that of the last year of rent

Example :

If the work amounts to €4,000 TTC for a monthly rent of €300 (either €3,600 annual), the monthly rent may be increased by €4,000 X 15 %, or €600 / 12 = €50.

In the case of an empty dwelling, this increase being greater than 10% monthly rent (300 X 10% = €30), its application will be spread over 6 years.

Rent will be reassessed at 1/6 per year, an increase on 1re year of €8.33 per month ((600 X 1/ 6) / 12), the 2e year of €16.67 by month ((600 X 2 / 6) / 12), then subsequent years, of €25 per month, €33.33 per month, €41.67 per month, €50 per month.

Proposal to tenant

To reassess the rent, the landlord must make the proposal to his tenant respecting certain conditions of form and time.

The landlord must make this proposal at least 6 months before the end of the lease.

He must address his request to the tenant in the following ways:

  • Registered letter with request for acknowledgement of receipt
  • Act of Commissioner of Justice (formerly act of bailiff)
  • Hand delivery against receipt or signing

Warning  

the period runs from the day of receipt of the letter recommended by the tenant, of service of the act of commissioner of justice or of the delivery personally to the tenant.

The re-evaluation proposal shall contain the following information:

Warning  

where the landlord proposes to renew the lease with a reassessed rent, the landlord is not entitled to give notice to the tenant for the term of the lease in progress. Because it would come back to force the hand the tenant who wants to stay in the house.

Tenant Agreement

To accept the landlord's proposed increase, the tenant must send him his written agreement no later than 4 months before the end of the lease.

The rules for applying the rent increase depend on the type of rental.

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Empty housing

When the lease is renewed, the new rent is not immediately applicable. The increase must be applied gradually, by 1/3 annually or by 1/6 annually depending on the duration of the new lease.

However, if the increase is greater than 10% the initial rent and the term of the new lease is less than 6 years, so the increase applies by 1/6 annually during that lease, and then by 1/6 annually during the subsequent renewal.

Example :

For a lease is 3 years, the last monthly rent applied is €600 and the increase to be applied is €50 monthly:

  • This increase is less than 10% of the rent, because 600 X 10 % = €60, so its application will be 1/3 per year.
  • The monthly rent will be increased on 1re year of €16.67 per month (€50 X 1 / 3), then the 2e year of €33.33 per month (€50 X 2 / 3), and the 3e year of €50 per month.

Furnished accommodation

The rent increase applies to the renewed contract.

However, if the increase is greater than 10% of the initial rent, it applies by 1/3 annually to the renewed contract and on subsequent renewals.

Tenant Refusal

The tenant may refuse the proposed increase.

To do this, he must send a letter to the owner at the latest 4 months before the end of the lease.

The tenant can use this document template:

Challenge rent increase at lease renewal

In the event of a refusal, the increase proposed by the landlord cannot be applied to the renewal of the lease.

Please note

failure to reply by the tenant shall be deemed refusal. The increase proposed by the landlord cannot be applied to the renewal of the lease.

Refer the matter to the Conciliation Committee

If the tenant refuses or does not respond at the latest 4 months before the end of the lease, the landlord (or tenant) may seize the Departmental Conciliation Committee (CDC) to try to come to an agreement on the amount of rent. This is essential in order to be able to refer the matter to the court, if necessary.

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Before the CDC, the tenant can challenge the proposed increase by referring to the rents charged in the neighborhood for comparable housing.

The CDC has two months to give its opinion.

In the event of an agreement on the rent increase, a new rent applies to the renewal of the lease.

The rules for applying the rent increase depend on the type of rental.

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Empty housing

When the lease is renewed, the new rent is not immediately applicable. The increase must be applied gradually, by 1/3 annually or by 1/6 annually depending on the duration of the new lease.

However, if the increase is greater than 10% the initial rent and the term of the new lease is less than 6 years, so the increase applies by 1/6 annually during that lease, and then by 1/6 annually during the subsequent renewal.

Example :

For a lease is 3 years, the last monthly rent applied is €600 and the increase to be applied is €50 monthly:

  • This increase is less than 10% of the rent, because 600 X 10 % = €60, so its application will be 1/3 per year.
  • The monthly rent will be increased on 1re year of €16.67 per month (€50 X 1 / 3), then the 2e year of €33.33 per month (€50 X 2 / 3), and the 3e year of €50 per month.

Furnished accommodation

The rent increase applies to the renewed contract.

However, if the increase is greater than 10% of the initial rent, it applies by 1/3 annually to the renewed contract and on subsequent renewals.

Refer the matter to the judge

If the disagreement persists despite CDC's intervention, the landlord (or tenant) may refer the case to the protection litigation judge, provided that this is done before the end of the lease.

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The judge is seized before the end of the lease

Empty housing

When the lease is renewed, the new rent is not immediately applicable. The increase must be applied gradually, by 1/3 annually or by 1/6 annually depending on the duration of the new lease.

However, if the increase is greater than 10% the initial rent and the term of the new lease is less than 6 years, so the increase applies by 1/6 annually during that lease, and then by 1/6 annually during the subsequent renewal.

Example :

For a lease is 3 years, the last monthly rent applied is €600 and the increase to be applied is €50 monthly:

  • This increase is less than 10% of the rent, because 600 X 10 % = €60, so its application will be 1/3 per year.
  • The monthly rent will be increased on 1re year of €16.67 per month (€50 X 1 / 3), then the 2e year of €33.33 per month (€50 X 2 / 3), and the 3e year of €50 per month.
Furnished accommodation

The rent increase applies to the renewed contract.

However, if the increase is greater than 10% of the initial rent, it applies by 1/3 annually to the renewed contract and on subsequent renewals.

The judge was not seized before the end of the lease

It is no longer possible to refer the matter to the judge.

If the disagreement persists despite the CDC's intervention and until the end of the lease, the lease is then renewed at the previous rent conditions (last rent, possibly revised according to the evolution of the leaseIRL: titleContent, if the review has not taken place within the last 12 months).

Other Area

Warning  

  • In metropolitan France, when the lease concerns a dwelling classified F or G (class indicated on the DPE: titleContent), it is forbidden to increase the rent obviously undervalued.
  • In Guadeloupe, Martinique, French Guiana, Reunion and Mayotte, the landlord can increase a rent that is clearly undervalued, regardless of the class of the dwelling indicated on the DPE: titleContent. This rule is valid until 1er July 2024.

New Rent Estimate

The proposed new rent should be calculated from rents in the neighborhood for comparable dwellings.

These dwellings must be situated either in the same group of buildings or in another group of buildings with similar characteristics and situated in the same geographical area.

In municipalities with a population of more than one million, the landlord must provide at least 6 rents.

In other geographical areas, the landlord must provide at least 3 rents.

At least 2/3 of these references must correspond to rentals for which there has been no change of tenants for at least 3 years.

Each reference shall include the following:

  • Street name
  • Partial indication of the number of the building (by ten)
  • Quality and time of building construction
  • Floor of the accommodation and possible presence of an elevator
  • Living area of the dwelling and number of living rooms
  • Existence of possible annexes
  • Equipment condition of the dwelling, including running water, indoor toilet, shower room, heating
  • Period of construction of the building
  • Indication of the occupation of the premises for at least 3 years by the tenant
  • Amount of monthly rent excluding charges actually charged

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General case

Certain references (period of construction of a building, type of dwellings...) can be obtained from the network of local rent observatories.

Paris conurbation

Certain references (period of construction of a building, type of dwellings...) can be obtained from the network of local rent observatories or the rent observatory of the Paris agglomeration (OLAP).

Proposal to tenant

The landlord must submit his proposal at least 6 months before the end of the lease.

The proposal must be addressed to the tenant in one of the following ways:

  • Registered letter with request for acknowledgement of receipt
  • Act of Commissioner of Justice
  • Hand delivery to the tenant against receipt or signing

The time limit shall run from the day of receipt of the registered letter, service of the act of Commissioner of Justice or delivery by hand.

The text of the proposal should contain the following information:

Warning  

when the landlord offers the tenant the renewal of the lease with a reassessed rent, he is not entitled to give the tenant leave for the term of the lease in progress. Because that would be force hand the tenant wanting to stay in the walls.

Agreement

To accept the landlord’s proposed increase, the tenant must send the landlord’s written agreement no later than 4 months before the end of the lease.

In this case, the revaluation of the rent shall be acquired by agreement between the parties.

The rules for applying the rent increase depend on the type of rental.

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Empty housing

When the lease is renewed, the new rent is not immediately applicable. The increase must be applied gradually, by 1/3 annually or by 1/6 annually depending on the duration of the new lease.

However, if the increase is greater than 10% the initial rent and the term of the new lease is less than 6 years, so the increase applies by 1/6 annually during that lease, and then by 1/6 annually during the subsequent renewal.

Example :

For a lease is 3 years, the last monthly rent applied is €600 and the increase to be applied is €50 monthly:

  • This increase is less than 10% of the rent, because 600 X 10 % = €60, so its application will be 1/3 per year.
  • The monthly rent will be increased on 1re year of €16.67 per month (€50 X 1 / 3), then the 2e year of €33.33 per month (€50 X 2 / 3), and the 3e year of €50 per month.

Furnished accommodation

The rent increase applies to the renewed contract.

However, if the increase is greater than 10% of the initial rent, it applies by 1/3 annually to the renewed contract and on subsequent renewals.

Refusal or lack of response

The tenant may refuse the proposed increase. To do this, he must send a letter to his owner at the latest 4 months before the term of the lease.

The tenant can use this email template:

Challenge rent increase at lease renewal

Please note

failure to reply by the tenant shall be deemed refusal.

If the tenant refuses or fails to respond, the increase proposed by the landlord cannot be applied to the renewal of the lease.

If the tenant refuses or does not respond at the latest 4 months before the end of the lease, the landlord (or tenant) must seize the Departmental Conciliation Committee (CDC) to find an agreement on the price.

Refer the matter to the Conciliation Committee

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You own it

You can use this document template:

Owner: To submit a request for rent revaluation to the departmental reconciliation commission

Before the CDC, the tenant can challenge the proposed increase by referring to the rents charged in the neighborhood for comparable housing.

The CDC has two months to give its opinion.

The rules for applying the rent increase depend on the type of rental.

Répondez aux questions successives et les réponses s’afficheront automatiquement

Empty housing

When the lease is renewed, the new rent is not immediately applicable. The increase must be applied gradually, by 1/3 annually or by 1/6 annually depending on the duration of the new lease.

However, if the increase is greater than 10% the initial rent and the term of the new lease is less than 6 years, so the increase applies by 1/6 annually during that lease, and then by 1/6 annually during the subsequent renewal.

Example :

For a lease is 3 years, the last monthly rent applied is €600 and the increase to be applied is €50 monthly:

  • This increase is less than 10% of the rent, because 600 X 10 % = €60, so its application will be 1/3 per year.
  • The monthly rent will be increased on 1re year of €16.67 per month (€50 X 1 / 3), then the 2e year of €33.33 per month (€50 X 2 / 3), and the 3e year of €50 per month.

Furnished accommodation

The rent increase applies to the renewed contract.

However, if the increase is greater than 10% of the initial rent, it applies by 1/3 annually to the renewed contract and on subsequent renewals.

Refer the matter to the judge

If the disagreement persists despite CDC intervention, the protection litigation judge the court on which the dwelling is to be seized. It has to be done before the term of the lease.

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The judge is seized before the lease expires

Empty housing

When the lease is renewed, the new rent is not immediately applicable. The increase must be applied gradually, by 1/3 annually or by 1/6 annually depending on the duration of the new lease.

However, if the increase is greater than 10% the initial rent and the term of the new lease is less than 6 years, so the increase applies by 1/6 annually during that lease, and then by 1/6 annually during the subsequent renewal.

Example :

For a lease is 3 years, the last monthly rent applied is €600 and the increase to be applied is €50 monthly:

  • This increase is less than 10% of the rent, because 600 X 10 % = €60, so its application will be 1/3 per year.
  • The monthly rent will be increased on 1re year of €16.67 per month (€50 X 1 / 3), then the 2e year of €33.33 per month (€50 X 2 / 3), and the 3e year of €50 per month.
Furnished accommodation

The rent increase applies to the renewed contract.

However, if the increase is greater than 10% of the initial rent, it applies by 1/3 annually to the renewed contract and on subsequent renewals.

The judge was not seized before the end of the lease

It is no longer possible to refer the matter to the judge.

If the disagreement persists despite the CDC's intervention and until the term of the lease, the lease is then extended to the previous conditions of rent (the amount of which may be revised).

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