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Changes To Rent Guarantees
Rent guarantees in the form of a deposit, or a guarantor, have now become even more restricted.
In the case of an unfurnished letting of a tenant's main dwelling the limit on a deposit has come down from two months' rent to one month's and it will become unlawful to ask for a guarantor to guarantee the payment of unpaid rent, or compensation for damage. In respect of furnished lettings, or second homes, these items are unrestricted in this way and are for negotiation between the landlord and the tenant.
Since 10 February 2008 new tenancies will be restricted in this way, but existing ones will not be. Since that date on the creation of such a tenancy, all the landlord can ask for is two months' rent, one as a deposit and the other in respect rent payable in advance. The tenant can even borrow the deposit on very favourable terms from the CIL (Comite Interprofessionel du Logement) or CCI (Chambre de Commerce et de l'Industrie) - see website UESL www.uesl.fr. Also on the tenant's leaving the landlord must from now on refund the deposit within one week if the rent is up to date and no damage has been caused.
Also there are a number of hurdles to overcome before a guarantee clause can be enforced against a third party.
A revised form of insurance against unpaid rent and damage caused by a tenant is presently under discussion, but the report has yet to be made. The intention is to extend the existing GRL (Guarantie of Tenant Risks) which will become GURL (Universal Guarantie of Tenant Risks).
N B (i) Also that with effect from 12 August 2008 all new lettings have to be accompanied by, inter alia, a lead report. For this purpose a new letting covers the explicit renewal of one, but not the implied renewal by operation of law.
(ii) If you let or show a clear intention to let a property you are not liable for la taxe d'habitation. However, the intention must be clear and you must be able to produce evidence of this. If you cannot you, the landlord, will have to pay the tax, as well as the taxe fonciere. In a recent case the landlord put an apartment into the hands of an estate agent with authority to let it out when an existing student letting expired in June. The agent was so instructed on 17January. As the date on which such matters are decided is 1 January the landlord was not able to show that he had renounced his personal right to occupy as at that date and so was held liable to pay the tax!
Clearly the government believes there are more votes to be had in engraciating itself to tenants than to landlords!
Copyright David Crawford April 2008.