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The various possible leases and applicable laws

Sections de l’article

    The common law of the lease is contained in the Civil Code. However, these supposedly general rental rules tend to diminish in scope.

    Indeed, many specific provisions scattered in specific laws have mitigated the general scope of the provisions of the Civil Code on the lease agreement, including the provisions of the law of 6 July 1989.

    These particular laws are now confined to a specific type of lease.

    The main leases in France:

    Lease: leases subject to the 1948 Act

    The 1948 Act is one of the oldest to regulate certain leases to date. Not content with being very old, this law is no longer intended to apply very often because of its strict scope, it governs dwellings that have certain characteristics, for example the fact that their construction was completed on September 1, 1948.

    Professional lease: the case of the commercial lease

    When a building is intended to be used to operate a commercial fund, it may be subject to a professional lease, or a commercial lease. The latter actually encompasses roughly the bulk of forms of professional leasing.

    Indeed, the commercial lease is authorized by law for the exercise of a commercial activity as well as for the exercise of industrial, artisanal or even liberal activities. The commercial lease is governed by sections L. 145-1 and the following of the Code of Commerce.

    Free rentals

    When it takes place between individuals and when it is intended to be used for personal use, the lease of a built or undated building is mostly subject to the Civil Code.

    The legal provisions contained in the latter are then relatively flexible and flexible, compared to specific leases such as the rural lease. Rentals subject to articles 1708 and following of the Civil Code are thus described as “free” and there is a de facto lease of free tenancy.

    Free rentals include furnished residences, seasonal rentals, second homes and public housing.

    Garages, car parks and gardens are also affected when they are rented independently of a rented premises.

    HLM rentals

    The HLM lease is a specific lease, with a social character. This type of residential lease is reserved for people with low resources.

    In this context, a lease agreement is entered into between the low-income person and a low-income housing organization.

    This lease will be governed by various laws at the same time: the right to remain in the premises by the  1948 law,  while the burden of rental repairs will, on the other hand, fall under the Civil Code..

    Lease: the law of July 6, 1989

    The Act of July 6, 1989 is a category of lease regulation.

    Its scope is strictly limited to certain types of real estate leases. Its application also depends on the type of real estate. It’s unavoidable.

    Itis a law that seeks to improve rental relationships, i.e. the relationship between landlords and tenants. It amends Act 86-1290 of December 23, 1986. The law of 6 July 1989 itself has undergone amendments and amendments, made among other things and recently by Law No. 2014-366 of March 24, 2014.

    The law of July 6, 1989 is more commonly known as the law applicable to residential leases. But not all types of housing intended to be used in a personal capacity are concerned. That is how the law has a well-defined scope.

    The scope of the law of July 6, 1989

     Law 89-462 is intended to govern certain types of properties subject to rent. It mainly concerns dwellings used for personal purposes for housing.

    This test already distinguishes the scope of the july 6, 1989 law from that of professional leases, including commercial leases. On the other hand, the same law applies in the case of a mixed lease,i.e. for both residential and professional use.

    It should be noted, however, that residential leases and mixed leases governed by the 1989 Act are still defined according to two complementary criteria:  

    • First of all, the dwelling must be used as the tenant’s mainresidence. This is defined as the accommodation mainly occupied by the taker at least 8 months in the year. The tax administration defines it as the housing that constitutes the tax home of the policyholder and his family.
    • In addition to the need to be the tenant’s main residence, the unit must be rented empty. The concept of empty housing does not correspond to the room devoid of any sanitary equipment, kitchen, electrical equipment…

    Rather, it corresponds to the dwelling which does not provide the tenant with the necessary and sufficient personal effects, allowing the tenant to meet the needs of everyday life. It is thus up to the tenant of a dwelling subject to the 1989 law to furnish his main residence.

    Finally, it should be noted that the law of 6 July 1989 also applies to all outbuildings of empty rented main residences (gardens, garages, parking space etc).

    Lease: Lease rental law 1948

    The 1948 law, like the law of 6 July 1989, is one of the main legislative provisions on leases in France. This law can be applied in the case of specific dwellings, with well-defined characteristics; or be applied cross-cuttingly and in conjunction with other legislation such as the 1989 Act.

    The 1948 Act has a relatively narrow scope. It is intended to apply only to certain types of housing with the criteria well defined by law. This law is all the less enforced since dwellings that were within its jurisdiction but have been the subject of vacancy since 23 December 1986, are now under the authority of the law of 6 July 1989.

    In broad terms, the lease subject to the 1948 regulation is relatively restrictive for the lessor and very advantageous to the lessor.

    The 1948 rental scheme is specific to certain real estate, built-up buildings, for residential use, whoseer construction was completed on September 1, 1948.

    The accommodation must be located either in the Paris metropolitan area less than 50 km from Paris or in any other region of France provided that the locality concerned has at least 4000 inhabitants.

    The dwelling must meet certain technical conditions: it must belong to certain categories of buildings such as IIA, IIB, IIC etc.

    The lessor under the 1948 Act must meet certain obligations. In particular, it must assure the taker its right to remain in the premises.

    However, this does not imply a perpetual lease, if the lessor wishes to take over his dwelling, he must make an offer of rehousing to the taker. In addition, the landlord must also comply with the regulatory rent rates set by the 1948 Act.

    The 1948 rental scheme may cease when the lessor wishes to return to his dwelling to house himself or to house his rightful persons. This scheme also ends when the taker, under the conditions set by law, loses his right to remain in the premises. It can finally end when the lease is terminated in a reasoned manner.

    Leasing: the professional lease

    In many cases, the professional lease is confused with the commercial lease, which is part of the professional leases, but the professional lease itself has a legal regime distinct from that of the commercial lease. It is distinguished by its regulation but also and above all by its scope of application.

    The premises subject to the professional lease

    Generally, a professional lease will logically concern premises of professional use. These premises must therefore necessarily be used for the exercise of a professional activity. The rental of offices may thus be subject to a professional lease under certain conditions: the offices in question must be used to house a liberal activity. Any other professional activity, such as commercial activity, craft activity including the operation of a commercial fund, is prohibited under a professional lease. In addition to offices, warehouses can also be subject to a professional lease. But this is only the case if the warehouse will serve as a storage space.

    People who can buy a professional lease

    A professional lease is usually reserved for people in a professional activity. However, this criterion is not sufficient to distinguish professional lease from commercial lease, which technically is also a professional lease. The commonly accepted distinguishing criterion is that the activity carried out by the professional considering a professional lease must not be commercial or industrial, let alone artisanal. In many cases, it is people in liberal activity who take out a professional lease.

    The professional lease agreement and its regulation

    The professional lease does not have a specific regulation, unlike the commercial lease. It is therefore framed by the provisions of the Civil Code,the latter presenting itself as the common law of the lease. With regard to professional leases, the regulation of the Civil Code must be  combined with section 57A of the Act of December 23, 1986..

    At the level of the lease agreement itself, it is concluded for a term that cannot be less than 6 years. In the absence of any expression of contrary will on the part of either party, the professional lease agreement enjoys a tacit renewal for a further period of 6 years. However, there is no systematic right to renew the lease: this is why both the underwriter and the lessor can terminate the lease upon the end of the term, subject to issuing a notice 6 months in advance.

    As in the commercial lease, subletting is possible if the professional taker obtains the agreement of the lessor.

    Lease: the commercial lease in detail

    Commercial leases are one of the most widely used types of professional leases in France.

    Alongside the commercial lease, the professional lease itself, as well as the mixed lease. The commercial lease has a specific legal regime and therefore specific regulations.

    In addition, the premises and the persons affected by this type of lease  may be sometimes separate and sometimes identical to those affected by the professional lease itself.

    Here’s a look at what underpins the specificity of the commercial lease…

    Premises subject to commercial lease

    Like the professional lease itself, the commercial lease is a form of professional rental. That is, the premises subject to such a lease must be used for the exercise of a professional activity. While some types of premises require a commercial lease regime, others may be subject to either a commercial lease or a professional lease. Stores, for example, can only be subject to the commercial lease regime. On the other hand, offices and warehouses may, depending on the case in hand, be subject to the commercial lease or professional lease regime. It should be noted that bare land on which commercial, industrial or artisanal buildings are erected may be subject to a commercial lease.

    People affected by a commercial lease

    The law clearly specifies which categories of professionals are affected by the commercial lease regime. First, there are the merchants: they are the professionals who carry out acts of commerce as usual and make them their profession. But the law also extends the benefit of the commercial lease regime to other professionals: people engaged in industrial activity, and persons engaged in artisanal activity, regardless of whether or not they carry out acts of commerce.

    The commercial lease agreement and its regulation

    The commercial lease is governed by sections L. 145-1 and the following of the Code of Commerce. Its legal regime in the Code of Commerce was recently amended by Law No. 2014-626 of June 18, 2014.

    The commercial lease agreement is necessarily underwritten for a term of no less than 9 years, except for the legal exception under Section L. 145-5 of the Code of Commerce. The parties can thus exceptionally deviate from the 9-year term of principle and purchase a short-term commercial lease. It cannot be more than 3 years. At the expiry of this short-term lease, the commercial lease resumes its normal regime, i.e. for an additional 9 years, except in cases of non-renewal of the first lease.

    Leasing: the case of free rentals

    Of the many types of real estate leases, free rentals have the least regulatory constraints.

    Not that they are deregulated or not adequately regulated, but their legal regime is very flexible.

    However, it is necessary to determine precisely what is meant by “free rentals” as well as the dwellings affected by this type of lease. Flexible, the lease of a free lease is the reign of contractual freedom.

    Definition of free rentals

    The term “free rentals” refers to a type of real estate lease characterized by its flexibility. This flexibility is first and foremost manifested in its regulation: it leaves a large part to the autonomy of the will.

    This allows the parties to freely set up many clauses in their lease agreement. This flexibility is also evident on a formal level: parties to a lease may or may not enter into a written lease. In short, contractual freedom is what characterizes free rentals.

    Accommodation subject to free rentals

    Although their substantive regulations are quite flexible, free rentals can only apply to specific types of housing.

    First of all, there are furnished rentals, i.e. dwellings with sufficient furnishings to allow the tenant to live there on a daily basis. Then there are the second homes.

    There are also seasonal rentals, office accommodations, rentals of parking spaces (garage, parking), garden rental.

    However, it should be noted that any premises that are rented independently of a main residence will also be subject to the regulation of free rentals.

    Finally, most subleases are subject to the free tenancy regime, including the subletting of furnished dwellings.

    The regulation of free rentals

    Free rentals are governed by the Civil Code in its articles 1708 and following. These constitute the  common law of the lease in that they contain the legal provisions concerning not only the “rental of things” securities and real estate, but also the general and common provisions of the leases of the houses.

    This regulation is truly flexible and allows, among other things, the verbal lease or the sublease and even the assignment of a lease.

    The obligations of the landlord and the tenant

    In a free lease, the lessor and the lessor have only minimum obligations, the rest being left to the discretion of the parties through contractual freedom. This allows them to freely determine the amount of rent or the burden of rental repairs.

    Overall, the lessor has three obligations: to provide the accommodation to the tenant, to ensure the maintenance of the dwelling, and to ensure the peaceful enjoyment of the dwelling for the benefit of the taker.

    As for the tenant, he is obliged to enjoy the accommodation and pay the rent.

    Location HLM

    Renting in public housing is one of the most sought-after rental leases in France.

    The reason is that this type of rental has a strong social character and therefore affects many people.

     Renting in public housing is a type of real estate lease for certain types of housing exclusively: it is social housing, with a “Moderate Rent Housing” unit. Renting in low-income housing is thus reserved for specific categories of people: those in financial difficulty or people with low incomes. The regulation of this type of lease thus sets a ceiling of resources not to exceed, in order to benefit from it.

    The HLM lease

    The lease agreement for a low-income rental is between the low-income person and a low-income housingorganization. The latter acts as a landlord and can be public or private. The lease for a rental is necessarily drawn up in writing.

    Due to its content, the lease agreement in low-income housing has similarities with the empty housing lease. The lease agreement in public housing is concluded for an indeterminate period, the taker having the right to remain in the premises.

    The conditions for the allocation of a low-income housing

    In order to benefit from low-income housing, the first requirement to be met is the resource ceiling. In 2012, for example, the resource ceiling for a single applicant was EUR 22,334 in the Ile-de-France region.

    For a couple, this ceiling was in the Paris region of 33,378 euros for the same period.

    In addition to the condition of resources, the HLM agency also examines other data such as the status and situation of the applicant’s current housing, the distance from his place of work with his current housing etc.

    The application for housing

    The file for applying for social housing includes:

    – a printout as an application form must be completed and signed

    – a copy of the applicant’s ID

    – a copy of the family booklet

    – the last 2 tax notices

    – a document justifying the exact tally of the last family benefits which the applicant was able to receive

    The end of the HLM lease

    The lessor, i.e. the HLM organization, may terminate the lease agreement in limited and well-defined cases: thus, the lease may be terminated if during the course of the contract, the resources of the underwriter have exceeded twice the limit of resources set by law.

    The lessor can still terminate it if the tenant does not respect his contractual commitments.

    The transfer of a lease 

    Legally, the transfer of lease is the transaction by which a person collects the benefit of a pre-existing lease, without any termination between the lessor and the previous tenant.

    When is such a transfer possible? What are the requirements?

    The situations involved in the transfer of lease

    The transfer of leases is only possible in two specific hypotheses.

    – The first relates to the case where the tenant dies suddenly.

    – And the second relates to the situation where the same tenant has been the author of a home abandonment. In practice, such a situation will be characterized if it is proven that the tenant has left the premises permanently.

    People who can benefit from the lease transfer

    The transfer cannot benefit anyone.

    Only four categories of people can benefit.

    • The first of these is the spouse, that is, either the husband or the wife of the deceased tenant or who has permanently abandoned the premises.
    • It can also be the pacified partner, and even at the limit of the tenant’s concubine. But in the latter case, this concubine will have to prove that he or she shared the life of the tenant for at least one year on the date of the abandonment of the residence or the disappearance of the tenant.
    • It may also be the family close to the tenant, i.e. his ascendants or descendants. In this case, they will also have to prove that they had shared the life of the taker for at least one year.
    • Finally, persons who had been dependent on the tenant before his death or departure are also among the potential beneficiaries of the transfer on the condition that they also fulfil the same condition of duration as the previous categories.

    Additional conditions for low-income housing and transfer formalities

    Beyond these quality criteria, applicants for transfer in the context of social housing will also have to prove that the housing they want is not under-occupied.

    In other words, the dwelling should not be too spacious for the beneficiary.

    To characterize this conditionality, the law states that the number of living rooms must not be more than two, in relation to the number of people who actually live in the house.

    Aside from this, transfer applicants will also have to demonstrate that they are well within the statutory limits on the allocation of social housing. It should be noted, however, that these conditions do not apply to candidates when it turns out that the latter are either the spouse or an ascendant of the tenant.

    These details have been acquired, it should also be noted that those interested will have to comply with certain practical formalities. For example, they will have to send a letter to the landlord asking him to benefit from the transfer. Through this letter, they will also have to prove that they can indeed claim the lease in accordance with the legal criteria.

    Finally, if several people claim the lease, it will be up to the judge to arbitrate.

    The termination of a lease

    Legally, the termination of a lease is the act for the lessor or tenant to terminate the lease agreement.

    Depending on whether the initiative comes from the landlord or tenant, the rules are different.

    By the lessor

     In the context of residential leases, where the landlord wishes to terminate the lease agreement that binds him to the tenant, he can only validly do so under the law if he is able to invoke two grounds:

    1 – He wants to get the house back so that he can live there himself, or install a relative there.

    2 – He wants to sell his building: The landlord can ask his tenant to leave the unit to sell his property.

    The leave for sale must respect a certain formalism barely nullity, and therefore renewal of the lease at its end.

    This formalism is provided for by Section 15 of the Act89-462 of July 6, 1989:

    • Leave must be given to the tenant at least six months before the expiry of the lease for an empty dwelling, and three months for furnished housing.

    However, if the owner wants to sell a home that was already occupied when he bought it. The landlord can then only give leave to the tenant after the first renewal or renewal of the lease.

    • The leave must be notified separately to each tenant who signed the contract. If the tenant married or married after signing the lease but did not inform the landlord, the leave applies to both people.
    • The leave must specify a reason, that is, to explain why the landlord asks the tenant to leave the premises, in this case the sale of the dwelling.
    • The leave must be worth offer of sale. In other words, if the landlord wants to put his dwelling up for sale, the tenant occupier has priority to buy it. The leave must specify the proposed price and the terms of sale and payment. The owner must reproduce on the leave the first 5 paragraphs of section 15, II, of Act 89-462 of July 6, 1989.
    • The tenant has two months to respond to the offer of sale, and his silence is worth refusing. If he agrees to acquire the home, he has two months to sign the deed of sale, plus an additional two months if he uses a bank loan.
    • The leave must designate all the elements included in the lease and offered for sale, namely the dwelling and its annexes. These must be listed accurately – including cellars, parking spaces, …
    • The intention to sell must be real: a given leave with no real intention to sell is null and void. Thus, an unreasonable selling price may suggest that the landlord is simply trying to discourage the tenant from purchasing the unit. Similarly, the absence of a genuine search for a buyer is a clue to the owner. In these cases, the tenant will have to prove the existence of a fraud in order to obtain the cancellation of the leave (Cass. Civ. 3rd, 16 Sept. 2009, 08-13.701).

    It should be noted that since the adoption of the “Alur” law, the lessor may be fined 6,000 euros if it is proven that the reasons he has invoked are false. In other words, if he pretends to invoke either of the two grounds mentioned only for the purpose of granting the benefit of the dwelling to another tenant.

    The landlord can send the leave to the tenant by any means at his convenience, as long as he can prove the date of receipt by the tenant, but even if it is more expensive, the bailiff’s rebate has the advantage of being very difficult to question by the tenant: indeed, if he does not sign the notice of receipt of the LRAR and will not recover the fold at the Post Office , he is considered not to have received the leave and the lease is then renewed at maturity.

    If the tenant does not accept the offer of sale as set out in the leave, it takes effect on the expiry date of the lease and the tenant is then required to leave the premises (Article 15 of Act 89-462 of July 6, 1989).

    However, he is entitled to leave the dwelling at any time during the notice period, and will only be required to pay rent until the date of his actual departure.

    If, at the end of this notice, the tenant refuses to empty the premises, the landlord then has the power to initiate eviction proceedings against him

    Section 15, III of the Act of July 6, 1989 defines a category of protected tenants (tenants over the age of 65 whose resources are less than a ceiling set by ministerial decree). If the tenant falls into this category, the landlord cannot give him leave without offering him housing that corresponds to his needs and opportunities – unless the landlord himself is over 65 years of age or if his resources are below the ceiling.

    By the tenant

    The tenant does not need to give a valid reason to terminate the lease.

    On the other hand, the tenant remains subject to the procedure of prior notice.

    As far as he is concerned, the deadline for it is set by law at exactly three months.

    Moreover, as for the lessor, this notice must be served, according to the tenant’s convenience, either by letter recommended with acknowledgement or by the exploit of a bailiff.

    Once the notice is served, the tenant is no longer allowed to reverse his decision. However, if the lessor agrees, this prospect remains possible.

    In any case, once the three-month period mentioned in the notice has elapsed, the tenant is no longer entitled to remain in the dwelling. If he does so in spite of everything, the lessor can legally initiate a judicial deportation procedure against his person.

    Finally, it should be noted that before handing over the keys to the landlord, the tenant must submit to the state of the exit area.

    in Rental
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