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Short term rentals: Paris city hall goes on the warpath.

Short term rentals: Paris city hall goes on the warpath.

Many foreigners bought apartments inParis, usually with the help of bank loans, secure (?) in the belief that they could make good money and incidentally service the debt with short term furnished rentals. Those who took legal advice first would have learned that it was not as easy as that, consents needed to be obtained and that the potential penalties were severe. But no one seemed to get caught. Doubtless inspired by the politically sensitive issue of the shortage of housing in the capital, theParisCity Hallhas now declared its intention to stringently enforce the existing regulations.

What are the rules?

The law (articles L631-7 to L 631-10 of the Code de Construction et de l’Habitation (CCH) requires that in certain defined communes (which include Paris) the municipal authorities must give their prior consent to short term (less than 1 year, or, if the tenant is to a student, 9 months) rentals. This involves a change of legal use from residential to tourism and may require the owner to compensate by transforming a commercial property with the same (or, in some cases, double) the floor area to residential use.

Violation of the law can result in civil fines of up to 25 000€ plus a daily penalty of up to 1,000 € per m2 (article L651-2 CCH).

Owners should also note that in addition to the long arm of the law, the private rules regulating the building in which their apartment is located (“règlement de co-propriété”) may well place restrictions on the owners’ rights to enter into such short term rental arrangements.

Finally, they should know that the rental income is subject to French taxation, even if they are non resident, and that the tourism tax is also payable.

For further details on the application of these rules in Paris please see Paris Municipal Regulation of February 18, 2011 at www.paris.fr or contact Charles Campbell c.campbell@parislaw.tm.fr

Charles Campbell

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