The Different Types of Leases for Renting a Property: Leases Under the 1989 Law and Civil Code Leases
Renting a house in France can be governed by different types of leases, each with its own characteristics and legal obligations. The main types of leases are those subject to the 1989 Law (known as the Law of 6 July 1989) and those governed by the Civil Code. Understanding the distinctions between these two legislative frameworks is essential for both landlords and tenants to ensure a balanced tenancy relationship that complies with current legislation.
Leases Subject to the 1989 Law
The Law of 6 July 1989 is the main legal framework governing residential lettings used as a primary residence, whether apartments or houses. This law was established to protect tenants and regulate landlord practices. Here are the main characteristics of leases subject to this law:
-
Lease duration:
Leases subject to the 1989 Law have a minimum duration of three years when the landlord is a natural person (private owner) and six years when the landlord is a legal entity (company, association). This duration provides the tenant with a certain level of stability.
-
Renewal and notice:
At the end of the initial period, the lease is automatically renewed for an equivalent duration, unless the landlord or tenant decides to give notice. The landlord may give notice to the tenant in order to sell the property, to occupy it personally, or for a legitimate and serious reason (such as serious breaches by the tenant of their obligations).
-
Rent control:
In high-demand areas, rents are regulated, meaning that the landlord cannot freely increase the rent at lease renewal or when re-letting the property. Increases must comply with the caps set by local legislation.
-
Security deposit:
The security deposit is limited to one month's rent for unfurnished properties and two months for furnished properties. This deposit is intended to cover any unpaid rent or damage to the property.
-
Service charges:
The charges recoverable by the landlord are strictly regulated. They must correspond to services provided on behalf of the tenant, such as maintenance of communal areas or collective heating costs.
-
Rights and obligations of the parties:
The 1989 Law also governs the rights and obligations of tenants and landlords. For example, the landlord must provide a decent dwelling and ensure necessary repairs are carried out, while the tenant must pay the rent and maintain the property.
Leases Governed by the Civil Code
Leases governed by the Civil Code are less regulated and primarily apply to rentals that do not fall under the 1989 Law. These leases may concern second homes, company-provided housing, seasonal rentals, or furnished lettings intended for use other than as a primary residence. Here are the key characteristics of leases governed by the Civil Code:
-
Lease duration:
Unlike leases subject to the 1989 Law, Civil Code leases are not subject to a minimum duration. The lease duration is freely set by the parties and can be short or long, depending on the needs of the contracting parties.
-
Renewal and notice:
The conditions for renewal and termination of the lease are freely set by the parties. There is no automatic renewal, and the notice terms must be expressly stated in the contract.
- Rent and charges:
The parties are free to set the rent and the terms for rent revisions. There is no specific rent control as in leases subject to the 1989 Law, unless the rental is located in a high-demand area and the lease concerns a property used as a primary residence.
-
Security deposit:
The amount of the security deposit is not limited by law, except for furnished rentals used as a primary residence, where it is capped at two months' rent.
-
Freedom of contract:
Leases governed by the Civil Code offer considerable freedom of contract. The parties may agree on specific clauses concerning the use of the property, repairs, charges, and other aspects of the rental.
Key Differences Between the Two Types of Leases
The differences between leases subject to the 1989 Law and leases governed by the Civil Code are mainly related to the legal framework and tenant protection. The 1989 Law offers enhanced protection for tenants, with strict rules on lease duration, rent amounts, security deposits, and recoverable charges. Conversely, Civil Code leases offer greater contractual flexibility, allowing the parties to freely define the terms of the rental, but with less protection for the tenant.
Agency Fees for Civil Code Leases
For leases governed by the Civil Code, agency fees are generally borne by the tenant. This rule differs from leases subject to the 1989 Law, where fees are shared between the tenant and the landlord and are subject to legal caps. Agency fees may include the costs of drafting the lease, carrying out the inventory of fixtures, and other services related to rental management.
Conclusion
Choosing the right type of lease is crucial for establishing a healthy tenancy relationship that complies with the law. Leases subject to the 1989 Law offer increased protection for tenants, with strict rules on rent, lease duration, and charges. Leases governed by the Civil Code, on the other hand, offer more contractual flexibility but less legal protection for tenants. It is essential for both tenants and landlords to fully understand the differences between these types of leases and to choose the legal framework best suited to their needs.
Would you like to learn more or have specific questions about any of the points covered in this article?
Contact us to benefit from professional guidance throughout your project.
Based in Saint-Germain-en-Laye since 2015, we welcome you at 41 rue de Paris.
01.84.86.08.20 / [email protected]