Real estate: rent control partially suspended in Paris, what are the consequences?

Far from the suspension it saw in 2017, the rent control system in Paris ran into a snag at the start of the summer. In fact, the Paris Administrative Court, Friday, July 8, partially suspended the experiment for the period from July 1, 2019 to June 30, 2020.

Judgment resulting from a lawsuit by the National Union of Landlords (UNPI). “This decision is good news. It supports the fight we have been leading for several years and highlights the legal violations that have been put in place,” rejoices Christoph Demmerson, its president.

In the current context of inflation with the IRL ceiling and rental shortage, this system reduces the supply of available housing. The cancellation of the Administrative Court confirms the legal instability of this decree,” the National Union continues in its press release.

Decision to set it straight

However, this decision must be kept in mind, according to May Rossi-Landy, a Paris-based lawyer who specializes in real estate law. “It’s not a revolution,” he says. Concretely, it won’t change much. The repeal of the 2019 decree does not call into question the rent control system. It is a question of administrative justification and not of the principle of supervision itself.”

Evidence for this is in two other court rulings also issued on Friday, July 8, confirming the governorate ordinances implementing rent control for 2020 and 2021.

In its reasoning to challenge the decree issued in 2019, the Administrative Court highlighted that “the documents submitted by the governor (…) do not include an analysis of the structure of the rental market (editor’s note: proof of the existence of a tense area) on the territory of the municipality of Paris after 2017”. In other words, the prefecture did not send to the court sufficiently accurate documents to justify the establishment of the framework as stipulated by the ELAN Act (Article 140).

Some lease contracts are now subject to appeal

In addition, the court noted a second loophole, this time related to the date of publication of the decree. This is based on a document that won’t be officially published until… two months later. “The OLAP report (Editor’s Note: Observatory of Rents in the Paris Region) on the development of residential rents in the private rental sector in the Paris Region in 2018, was published in July 2019, that is, after the date of the contested decree,” the court notes.

In the end, “only leases signed between July 1, 2019 and June 30, 2020 are involved and can be the subject of a complaint,” Me Rossi-Landi defined. He continues: “Landlords who did not respect rent controls during this period do not risk any prosecution. On the other hand, some of the lessors who complied when they were unable to do so are now in theory in a position to file an appeal.” The procedure “is not worth it” according to the professional, taking into account in particular the costs that will be incurred.

An opinion also shared by Ian Brusatte, the deputy mayor of Paris in charge of housing. He considers it a “verdict without consequences” and hopes the state will appeal the ruling.

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