The 10 Most Common Mistakes When Drafting a Lease in France

The drafting of a lease is a crucial step in real estate investment. This document governs the relationships, rights, and mutual obligations of the landlord and tenant. While it follows a standardized format, there is room for adaptation to specific cases with legally compliant special clauses. The lease agreement serves as the reference tool in case of disputes for both the landlord and the tenant.

Therefore, it is essential for both parties to ensure that there are no errors in the contract they are about to sign. In 2015, Les Échos reported that 42% of landlords had experienced a dispute with a tenant, and 20% of these disputes concerned the lease itself! To help you avoid common pitfalls, Qlower has identified 10 frequent mistakes to avoid when drafting a lease.

 

Les 10 erreurs les plus courantes lors de la rédaction d’un bail​

1. Formalism

When drafting the lease agreement, it is crucial to adhere to the formalism and content requirements set by the ALUR law to ensure the contract’s validity. Key elements include identifying the parties involved, providing an accurate description of the property, specifying its intended use, detailing any planned work, and stating the rent amount, among others.

 

Meticulous attention is necessary to prevent potential issues in case of disputes. The lease’s termination clause must be included in your lease agreement: it is essential for exercising your rights in the event of a dispute.

 

2. Identity of the Parties

Clearly identifying the parties is the first step in drafting a lease agreement. This element of the contract unequivocally establishes who is the landlord and who is the tenant. Any error in this section can jeopardize your rights or lead to unpredictable outcomes in a dispute.


3.Duration of the Lease

The landlord does not have the freedom to arbitrarily determine the lease duration. The length of leases must comply with legal obligations, which vary depending on the type of lease and the nature of the parties involved.

 

  • For a furnished rental, the minimum duration is 1 year (though a longer period can be set).

  • For an unfurnished rental, the minimum duration is 3 years.

  • The lease duration can be reduced to 9 months if the tenant is a student.

  • “Mobility leases” have been introduced for individuals on temporary assignments, internships, or training, allowing for even shorter durations ranging from 1 to 10 months.

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The lease duration also depends on the landlord’s status.

 

  • An individual or a family SCI (Société Civile Immobilière) must offer a minimum 1-year lease for furnished rentals and a minimum 3-year lease for unfurnished rentals. It’s important to note that lease renewals occur automatically for the same duration.

  • A legal entity (other than a family SCI) must provide a minimum lease duration of 6 years to its tenants.

4.Security Deposit

If a security deposit is required (it is not mandatory), its amount is regulated. Depending on whether the rental is furnished or unfurnished, the maximum security deposit amount differs.

 

  • For an unfurnished property, the maximum security deposit is equivalent to one month’s rent excluding charges.

  • For a furnished property, the maximum is two months’ rent excluding charges.


5.Annual Rent Review

The annual rent review is also regulated, and any clause contrary to the law will be deemed null and void.

It is possible to revise the rent once a year on the anniversary of the lease’s effective date, provided that the corresponding clause has been included in the contract. Important: Without this explicit clause, the revision cannot take place until the end of the current lease!

 

Strict Rules for Annual Rent Reviews

 

  • During the tenant’s occupation, the rent can be adjusted according to the changes in the Rental Reference Index (IRL). However, since the Alur Law, retroactive increases are no longer allowed; they can only apply prospectively. It is therefore impossible to claim increases from the past 3 or 5 years in the event of oversight.

  • In rent-controlled areas, when a tenant changes, the new rent excluding charges cannot exceed the last rent paid by the outgoing tenant. There are rare exceptions to this new rule.

  • In many localities, rent ceilings may also apply. The administration publishes a reference market rent (calculated based on factors such as property type, rental type, number of rooms, construction era, and address) and a capped rent. Exceeding this cap is prohibited.

  • Some cases allow for exceptions to exceed the rent cap, but caution is necessary: the new tenant has the right to contest and revert the rent to its original capped value.

 

6.La surface habitable

A common mistake is misunderstanding the difference between the “Carrez” measurement and the “Boutin” measurement. For residential properties, the “Boutin” surface area is used, which excludes garages, cellars, attics, and verandas, unlike the “Carrez” surface area. While less commonly used and less well-known, it rarely leads to disputes between landlords and tenants… for now!

The rented property must have a “Boutin” surface area greater than 9m²; otherwise, the tenant may request a rent reduction or even invoke the nullity of the rental contract. Landlords, in turn, could face a fine!

Finally, if the habitable surface area of the rented property is more than 5% smaller than the area stated in the contract, the tenant can request a proportional rent reduction.

 

7.Unfair Clauses

Unfair clauses are listed exhaustively in Article 4 of the 1989 law. An unfair clause will be considered null and void, meaning it will not be enforceable!

 

If you plan to include a very specific clause in your lease, a quick review of this list will help you confirm whether (or not) you can actually rely on it.

8.Furniture (in the case of a furnished rental, of course)

Providing a sofa and a coffee table is not enough to claim that your property is rented as furnished! There is a legal list of minimum equipment that must be provided to the tenant (e.g., bedding with a duvet, storage shelves, lighting, cleaning equipment, etc.). You can find the list in Article 2 of the Decree of July 31, 2015.

It is essential to verify that the furniture listed in the contract meets these minimum requirements.

This detailed mention of the furniture must appear in the annexes, specifically in the detailed inventory of furniture. This inventory is crucial as it will serve as evidence in case of disputes.

9.Annexes

A list of annexes must be included to ensure the completeness of the contract:

 

  • A technical diagnostic file, including an energy performance diagnosis (DPE).
  • An informative notice.
  • The move-in inspection report completed when handing over the keys, and the move-out inspection report when the keys are returned.
  • The insurance certificate for rental risks, which is mandatory for the tenant.
  • A list of equipment providing access to information and communication technologies (e.g., cable, TNT, fiber-optic internet).
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Additional items that may also be included:

 

  • A guarantee document if the landlord required a guarantor.
  • A detailed inventory of furniture, if the property is furnished.
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There are additional mandatory annexes in certain specific cases. For instance:

 

  • If the property was built before January 1949, a lead exposure risk report must be included in the technical diagnostics file.
  • If the rental is part of a co-owned building, the annexes must include an extract from the co-ownership regulations.

10.Signatures

Finally, legally, the lease must be signed by both parties to the contract. Additionally—and this is fundamental—each page must be initialed by both parties!

Conseil Qlower

Mistakes in a rental contract can happen quickly, and their consequences can be significant for either party.

 

For its clients, Qlower has created a process that uses simple and concrete questions to generate a lease agreement that perfectly complies with the formal requirements set out by the Decree of May 29, 2015 (ALUR Law).

 

And if you have doubts and want Qlower experts to review and analyze your current lease for free, it’s simple: click below, and we’ll get back to you quickly with a clear assessment of your risks!

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