Are You Overpaying Your Rent in Paris?

You’re home hunting for a rental and your scam alert is on. I don’t blame you. Paris rents are high enough, so who wants extra trouble or expenses? Or perhaps you’ve finally switched it off. You’re done asking questions. It’s exhausting, and Paris housing regulations sound too complicated anyway. Well, I can’t let you do that.

Understanding rents in Paris is part of making a sensible decision on your home rental.

Plus, I’ve made it simple for you. You’ve probably heard about “capped rents” in Paris, right? How do “capped rents” work? Where and on what type of housing does this measure apply? How can you check if your rent matches these regulated rents? What can you do about it if your rent is too high?

You’ll get all the answers here to help you decide if you can trust the landlords or real estate agents you encounter.

Playing by the rules

Let’s back up a minute on your trust issue while apartment hunting. When you start your search, it makes sense to look at ads in real estate agencies. But you’re soon frustrated. You haven’t been called back regarding your dream apartment. You make visits that have little in common with your criteria and you realize it’s not working.

Want to know why? Because real estate agents don’t work for you. You don’t have the same interests. The real estate agent’s job is to find a tenant or a buyer for landlords or owners, not a home for you. For dedicated assistance in your home search, ask a relocation expert (rentals) or a home hunter (property). You’ll get visits of properties matching your personal needs and wants, with advice and support throughout the rental or buying process.

Putting your trust in the wrong person is a common mistake. It happened to me too. I was in the park with my 2-year-old. He was getting bored and cranky. One thing could distract him and save me from drama: my keys. I gave in and he was happy. Unfortunately, I then forgot about the keys. Luckily, they were found and waiting for me the next day. My point is that we had different interests: he wanted to play, I wanted peace. Predictably, it didn’t work out.

Now that you know the professional you can trust for the service you need, let’s see how to avoid overpaying your rent.

Money, money, money …..

You’ll feel like a teenager trying to get into a nightclub. Only this time they don’t want your ID, they want your pay slips.

Agents or landlords need your income to cover at least 3 times your rent plus service charges. In Europe, one out of four renters spends more than 40% of their income on rent (Source: Eurostat).

Now the good news. In France, tenants are more protected by housing regulations than homeowners. “Capped rents” limit rental prices, and give more housing mobility and transparency to tenants in their relationships with landlords.

Is this regulation as positive as it seems for tenants? Many real estate professionals point out its “side effects”.

Are all rentals impacted by capped rents? 

What type of rentals are concerned by the capped rents regulation? Only the main residence of the tenant (place occupied at least for 8 months a year, except for professional obligations, health constraints or force majeure) benefits from capped rents.

This means it affects:

• The 3-year lease for unfurnished rentals
• The 1-year lease for furnished rentals
• The 9-month lease for student furnished rentals

This means it excludes from the regulation:

• Homes rented as secondary residences (meaning you live somewhere else most of the time)
• Homes rented as company accommodation
• Homes rented as vacation rentals
• Furnished serviced-apartments
• Social housing
• Housing under state agreement
• State authorized university residences

Where and how do capped rents apply?

To correct the market’s imperfections, capped rents regulation is applied in areas called “zones tendues”, where offer doesn’t match demand. The Paris area is fully concerned. Here, rents cannot exceed the previous rent.

For Paris’ 20 districts (subdivided into 14 areas), when you enter a new residence previously rented, or when you renew your rental agreement (new contract signed), another measure from the Alur Law is applied as of August 1^st 2015: rents are set within a limit of:

• a maximum of +20% from a price reference
• a minimum of -30% from a price reference

and sometimes completed by a rent supplement for exceptional location or comfort features (in addition to the legal list of equipment for furnished rentals).

Furnished rentals are more expensive than unfurnished ones (the increase usually represents 3€/sqm).

In some cases the “previous rent” rule doesn’t apply. It occurs when the residence is rented for the first time, has been vacant for more than 18 months, or underwent improvement work in the last 6 months that represent a minimum of 1 year’s rent.

Then, the rent is set freely within the maximum 20% price reference rent in Paris.

Watch out for Part 2 to learn more about how to check your rent and react if yours is too high. And do a Paris friend a favor, don’t forget to share this article!