Dear Members,

On 10 July 2024, the Chamber of Deputies passed Bill 7642 amending :

1. the amended Act of 21 September 2006 on residential leases;

2. Article 1714 of the Civil Code.

The new law will come into force on Thursday, 1 August 2024.

As a reminder, on 15 April 2024, the Government Council approved the government’s amendments to draft law no. 7642 amending the amended law of 21 September 2006 on residential leases. The new law of 23 July 2024 on leases was published in the Official Journal on 25 July 2024.

In order to finalise this bill as quickly as possible, and in view of the strong opposition to the reform of the rent ceiling, the Council has decided to delete this part of the bill. The other important aspects, which have been widely approved by those concerned, have been retained.

The main points of the lease review are as follows:

1. Shared accommodation

The Bill introduces specific provisions for shared tenancies.
A single tenancy agreement will be drawn up between the tenants and the landlord, together with a tenancy agreement.
Joint tenants will be able to withdraw from their obligations before the end of the lease with 3 months’ notice and will have to find a replacement.

2. Requirement for a written lease and compliance with the legal rent ceiling

All residential lease agreements must be drawn up in writing and include certain mandatory details.
Compliance of the rent with the legal ceiling must be stipulated in each future lease agreement.

3. Clarification of the terms and conditions relating to the rent ceiling

The provisions relating to the reform of the rent ceiling will be revised to strike a balance between the needs of tenants and landlords.
The amount of rent paid in respect of a tenancy may not exceed 5% of the capital invested in the property.
A rent supplement may be charged for furnished accommodation.
The rule of annual thirds will be replaced by a biennial limit of 10%.

4. Abolition of the concept of luxury accommodation

The concept of “luxury accommodation” will be abolished, ensuring that the rent ceiling applies to all types of accommodation.

5. Sharing of estate agency fees

Estate agency commission fees will be shared equally (50/50) between landlords and tenants.

6. Regulation of the rental deposit

The maximum legal amount of the rental deposit will be reduced from 3 to 2 months’ rent.
A procedure for returning the rental deposit will be introduced, including penalties if the landlord fails to meet the legal deadlines.

We hope that these measures will contribute to better regulation of the rental market and a fairer balance between tenants and landlords.

For more information, please consult the text of law no. 7642 below:

­
Consult the text of the law extracted from the official gazette
­
­

Please do not hesitate to contact us should you have any questions or require clarification.

Yours sincerely

La Chambre Immobilière