ELAN LAW & ITS EVOLUTIONS
Written by, SÉPHORA AMSELLEM on July 5, 2024
ELAN LAW & ITS EVOLUTIONS
5-minute read
It is often referred to as the flagship housing law of the five-year term. Yet, with 234 articles covering extremely diverse areas, it can be difficult to grasp.
Thanks to our in-house ability to synthesize, we deliver—within a 5-minute read—the key takeaways to ensure you don’t miss the mechanisms that are still in force (and sometimes strengthened) and that already apply, at least in part, to everyday situations.
What is the “mobility lease” for?
Mobility is making its way into residential leases. The stated goal is to make it possible to find accommodation for a set period close to a temporary job or a training/education center.
Its advantage lies in a derogation from the strict regime of the 1989 law on residential premises, with a new-generation furnished lease that allows more flexibility.
To benefit from it, the tenant must, on the lease start date, be able to justify:
- Vocational training,
- Higher education studies,
- An apprenticeship contract,
- An internship,
- Voluntary engagement as part of civic service, or
- A temporary assignment as part of their professional activity.
One may question the rather vague notion of a “temporary assignment as part of their professional activity”, which will likely raise interpretive difficulties before the courts.
In any event, the lease must expressly state its ground, failing which it may be reclassified as an ordinary furnished lease (Title I bis of the 1989 law).
The major new feature is the lease term, which may range from a minimum of 1 month to a maximum of 10 months, without any possibility of renewal or tacit extension.
Since 2023, the Visale guarantee has been expanded: it also covers certain employees on insecure contracts with no age limit, making access to the mobility lease easier.
This requirement of a maximum duration is intended to prevent any circumvention of the text and to curb abusive use. That said, very short-term letting is undoubtedly a particularly interesting tool to make the operation of a rental investment more flexible.
This flexibility comes, however, at the expense of the landlord’s security on certain particularly important points. Thus, if the dwelling is rented to flatmates or if there are several guarantors, there is no joint and several liability. This means having to pursue each person for their share of the debt.
In addition, the mobility lease prohibits any security deposit, further increasing the risk of non-payment.
As will be understood, the idea here is to support people looking for housing or vocational training. To mitigate the risk of unpaid rent, the tenant may subscribe free of charge to a “Visale” guarantee, which is in fact a guarantee granted by Action Logement to the tenant. In the event of unpaid rent or service charges, Action Logement will pay the sums due to the landlord and will then seek reimbursement from the tenant.
Because the mobility lease is intended to be flexible, the tenant may terminate it at any time with 1 month’s notice, without having to give any reason—unlike the landlord, who must justify a legitimate ground (tenant’s breach).
Finally, in order to avoid disputes and build a quick and flexible landlord/tenant relationship, service charges are paid as a flat-rate amount, with no possibility for the landlord to request a year-end adjustment at the end of the lease.
Lastly—and this can likely be regretted—because the aim is to facilitate access to housing for low-income persons, the “mobility lease” does not allow access to housing benefits.
Yet another rent control scheme…
The ALUR law had already introduced a rent control mechanism, but its implementation proved disastrous.
Indeed, this rent-capping mechanism based on a reference rent in so-called “high-demand” urban areas—i.e., areas where there is a “significant imbalance between housing supply and demand”—had only been implemented in Paris and Lille and was conditional upon a prefectural decree to apply.
In these cities, the prefectural decrees were successively annulled by the Administrative Courts of Lille and Paris on the grounds that they failed to comply with the scope of application of the measure (TA Lille, 5th ch., 17 Oct. 2017, no. 1610304; TA Paris, 6th div., 2nd ch., 28 Nov. 2017). This latter decision was moreover upheld by the Paris Administrative Court of Appeal (CAA Paris, 26 June 2018, nos. 17PA03805, 17PA03808, 18PA00339, 18PA00340). The contested decrees limited their scope to the sole territory of the municipalities of Lille or Paris, whereas the entire agglomeration should have been covered.
The ELAN Law now provides for an experimental and optional rent control scheme in high-demand areas, for 5 years but extended until 2026, applicable “to all or part of the geographical area mentioned therein”.
It also allows the prefect to impose an administrative fine on a landlord who fails to comply with rent control, which may be up to €5,000 for a natural person and €15,000 for a legal entity, in addition to any possible rent reduction action that the tenant may bring. Lastly, an action to reduce the rent may also be initiated.
The digitization of “paper” leases is finally underway!
The introduction of a digital lease is one of the flagship measures of the text.
In addition to saving money, it will represent a considerable time-saving for landlords.
The Government may now, by ordinance, adopt all measures necessary to launch this lease digitization process.
The guarantee deed will no longer have to include the handwritten statements required by the law of 6 July 1989. Simply signing a standard form containing the mandatory statements will be sufficient.
Likewise, the landlord will be able to organize electronic signature of the lease and send, by simple email, a scan of the co-ownership regulations and the mandatory diagnostic reports.
Tourist rentals in lawmakers’ crosshairs!
A fine of up to €5,000 may be imposed on the landlord of a furnished tourist rental in the event of non-compliance with the prior declaration requirement.
Similarly, persons who fail to provide, to a municipality that has requested it, the count of rental nights expose themselves to a fine of up to €10,000.
In addition, a cap of 120 days per year is created for owners wishing to rent out their primary residence.
Since 2024, certain municipalities may require prior authorization even below 120 days.
Platforms publishing listings are of course not spared. If they fail to respond to a municipal request to communicate the number of days during which the furnished tourist rental has been rented out, the platform may face a fine of up to €50,000 per furnished tourist rental concerned by the breach.
Some cities now also require a registration number for short-term rentals.