Landlords are allowed to increase rents, within certain limits.
This is a discreet development which could make the transition to the new year a little more complicated for millions of French people. Since or in the next few days, many tenants risk receiving very bad news from their landlord. A letter or e-mail to announce what everyone could do without: an increase in rent.
Once a year -only-, owners can decide to increase their tenant’s rent. But be careful, it is impossible for them to do as they please and apply a disproportionate increase. The law regulates this in order to avoid abuse. Generally, it is on the anniversary date of the contract – that is to say 1 year, 2 years, 3 years exactly… after signing the lease – that an increase can be applied.
Since January 15, several tenants can receive an injunction to pay higher rent. The increase was established by INSEE and amounts to 1.82%. This is the increase in the rent reference index, included in all contracts, and which serves as the basis for calculating the rent review. This index is recalculated every quarter.
The last index calculated applies to all rental contracts which mention the rent reference index of 4e quarter (Q4) as a reference. Generally, these are rental contracts established between January 15 and April 15 of any year.
Concretely, a person entering their accommodation between January 15 and April 15 of any year, for a rent excluding charges of 500 euros could be ordered to pay €509.10 (1.82% increase), i.e. 9.10 euros excluding charges, the latter being calculated separately.
This represents an increase of 109.20 euros over the year for the tenant. This is a maximum increase. Each owner is free to apply it, to only moderately increase the rent or not to touch it at all.
Not all tenants are affected by this possible increase. Only those whose rent reference index, indicated in the rental contract, is that of the 1st quarter (of any year) could, in the days and weeks to come, be ordered to pay a higher rent. The owners then have one year to implement this increase.