Many foreign investors have purchased apartments in Paris, often with bank financing, with the intention of renting them on a short term basis to tourists looking for an alternative to the more expensive hotels.
Almost exactly a year ago we drew the attention of such investors to the dangers of non-authorized short term rentals. It was entitled “Paris City Hall goes on the warpath”.
Well, the Paris City Hall has recently collected a couple of scalps.
A decision of the Paris Court of appeal of September 4, 2012 brought home the danger involved in the short term rental of residential premises in Paris without the appropriate authorisations. Furnished rentals in certain designated high density areas (which include Paris and the suburbs) for less than one year, or nine months for students, are deemed to change the use of the property from residential to another use, such a change requiring prior authorisation.
The facts in the Paris court of appeal case were straightforward. Two investors owned five furnished flats in the Paris area and let them out on a short term basis. They were marketed on a website.
The local authorities were alerted to the fact that the flats were being rented to tourists by letters received from an activist group. Over a period of some seven months inspectors investigated the situation. They visited the flats in question, consulted websites and found that they were indeed rented on a short term (i.e. less than one year) basis, thus being involved in a tourist rather than a residential activity.
The City Hall brought an action on a fast-track, summary basis. Apart from the inspectors’ report extracts from the website that had advertised the rentals were also adduced as evidence.
On November 16, 2011 the first instance court fined the couple 2,500 € for each apartment and ordered that the apartments be restored to their proper residential status.
The owners appealed and the Paris Court of Appeals confirmed the decision of the first instance court in its principle but increased the fine to 10,000€ per flat.