Real Estate: Focus on the ELAN Law (Evolution of housing, development and digital technology)

Rent supervision, control of furnished tourist rentals, mobility leases, etc. We review the main measures of the Elan Act.

The “Elan” law (Evolution of Housing, Development, and Digital) was definitively adopted on 16 October 2018. According to the Ministry of Territorial Cohesion and Relations with Local Authorities, this new text provides for a series of measures to meet the expectations of the French people in order to improve their daily living environment through housing and territorial development.

The mobility lease

This text defines the creation of a new lease called a “mobility lease”. The latter, which lasts from 1 to 10 months and is non-renewable, concerns furnished rentals. A lease that can be terminated at any time by the tenant subject to one month’s notice. In concrete terms, the mobility lease has been designed to meet the housing needs of students, young workers, people on fixed-term contracts or on mission.

Rent control

This controversial measure has previously been tested in Paris and Lille. The framework for rents is reintroduced in the text. It should be noted that the new version of the scheme provides that municipalities with more than 50,000 inhabitants where there is a real imbalance between the supply and demand of housing, may test the scheme for a period of 5 years from the publication of the law.
In practice, in the areas concerned, landlords will have to set their rent within a range (reference rents) defined each year by prefectoral decree, a range that takes into account in particular the type of housing, the number of rooms and the district. In the event of non-compliance, the indelicate lessor would be punished, in particular by reimbursing the overpayment to the tenant.

The supervision of seasonal and tourist furnished rentals (Airbnb type)

The Elan law provides for stricter control of furnished tourist accommodation. Thus, municipalities will now be able to ask landlords to send them a breakdown of the number of nights rented during the current year, it being specified that landlords may not rent more than 120 nights per year.
In addition, for municipalities that have introduced mandatory registration of furnished tourist accommodation, landlords who do not comply with this procedure will be subject to financial penalties: from €5,000 to €10,000 per accommodation.
It should be noted that rental platforms that publish the announcement of a principal residence already rented more than 120 days a year are also subject to penalties: €50,000 per dwelling.

The expulsion of squatters facilitated by the ELAN Law.

Read more about it in our October briefing note available here: The expulsion of squatters facilitated by the ELAN Law.