Guide to Letting Property in France

13. Protection Against Arrears of Rent

In one shape or form many international owners of property in France are also landlords, whether as owners of a chambre d'hôte, a gîte, a long-term rental, or letting of their own property.

Due to the transient nature of such lettings, the issue of non-payment of rent rarely presents itself.

However, where a property is let out on an annual basis, to a tenant for whom the property is their principal home, it becomes a much more significant issue.

That applies whether the property is let furnished or unfurnished, for such tenants have strong security of tenure.

Although the incidences of rent arrears in the private rental sector in France is low (around 3% of properties let), whether as a result of increasing financial insecurity or a lack of fidelity, it is a growing problem.

With the process of evicting a non-paying tenant from your property being complex, lengthy and expensive, landlords of such properties need to act with the utmost caution.

There are three main forms of protection that a landlord can take against the non-payment of rent:

1. Rental/Damage Deposit
2. Insurance Policy
3. Guarantor

None of these steps offer complete security, and they do not apply in all circumstances.

In particular, the use of insurance cover is going to be more difficult to get in the case of a long-term letting to someone from overseas, and the use of a guarantor in such a case equally problematic.

Accordingly, if you let to an international tenant, you are going to have to place greater reliance on your vetting procedures, a larger initial deposit and/or rental payments well in advance.

13.1. Rental/Damage Deposit

It is normal practice for a landlord to ask for a rental/damage deposit from a new tenant, which is refundable at the end of the tenancy. The deposit is called the dépôt de garantie.

However, the deposit is not obligatory, and neither is a landlord permitted to insist on a deposit if the rent is payable two months or more in advance.

The amount of the deposit cannot exceed one month's rent, excluding charges.

The deposit does not carry reimbursable interest to the tenant, and cannot be revised during the tenancy. It must be returned to the tenant within a maximum of two months from the end of the tenancy.

The amount to be returned will be the balance left after payment of any rent arrears or charges, and the cost of justifiable repairs. The only repairs that are admissible are those for which the tenant was responsible, including any damage or neglect of the property that they should have repaired prior to termination.

If the tenant should give notice to terminate the tenancy, they are not entitled to use the deposit held by the landlord in lieu of rental payments. They must pay the rent as normal and seek a refund of the deposit when they vacate the property.

Disputes about the non-reimbursement of the deposit at the end of the tenancy are one of the biggest sources of litigation between landlords and tenants. If the landlord unjustifiably withholds refund of the deposit then it carries interest at a rate set by government – about 2%.

A more comprehensive approach to rental protection is to take out an insurance policy, which we consider in the next section.

Next: Insurance Policy Against Non-Payment of Rent

Back: Duration of Tenancy