Definitively adopted by the Senate on October 16, 2018, the ELAN Law (Evolution of Housing, Development, and Digital) saw most of its implementing decrees published throughout 2019. Some of its 270 articles bring significant changes for property owners. Here's an overview of the six most important changes introduced by the ELAN Law.
ELAN Law: Rent Control
First introduced in Paris and Lille but canceled at the end of 2017, rent control is making a comeback, this time experimentally for 5 years! It applies by prefectural decision in areas with tight rental markets (Paris, Lyon, Aix-en-Provence, and Lille metropolitan areas). For the first time, it also includes sanctions for non-compliant landlords. Article 49 of the law provides for fines of up to €5,000 for private landlords and €15,000 for legal entities such as real estate companies (S.C.I.). Local rent observatories (OLL) are also being established in high-demand areas to improve the transparency of rental data and provide better information to housing stakeholders.
Limitation on Short-Term Tourist Rentals
Rentals through tourist booking platforms are now limited to 120 nights per year for primary residences. Owners must declare the number of nights rented to the local authorities and face heavy fines for exceeding the limit. Violators could face fines of €5,000 for failure to declare their rental activity and up to €10,000 for failing to report the number of rented nights. Platforms like Airbnb now automatically block rentals beyond the legal limit of 120 nights.
Creation of a New Lease Type
Owners of furnished properties can now offer a tailored lease for students, apprentices, interns, and temporary professionals needing short-term rentals. This new "mobility lease" allows for the rental of furnished properties for up to 10 months without renewal. No security deposit can be requested by the landlord, the charges are fixed, the tenant is eligible for the Visale guarantee (security deposit provided by Action Logement), and no solidarity clause is required for co-tenants.
ELAN Law: Simplification and Digitalization
Previously, guarantors had to write mandatory clauses by hand. These clauses were often the cause of numerous invalidations due to errors. The ELAN Law now allows these clauses to be included in standard leases, and digital transmission of rental-related property diagnostics is permitted. This flexibility paves the way for the complete digitalization of leases. After selecting the appropriate lease, both the landlord and tenant can now complete it online. This is ideal for formalizing a rental agreement remotely with just a few clicks!
No More Winter Break for Squatters
Previously, squatters benefited from the winter eviction moratorium (November 1 to March 31), which was initially intended to protect tenants who were unable to meet their rental obligations. The ELAN Law ends this protection for squatters, allowing for their eviction year-round if they occupy a property unlawfully.
Easing Condominium Rules
Aiming to streamline processes within condominiums and adapt them to their size and diversity, the government can now legislate by ordinance, thanks to Article 60 of the ELAN Law. The goal is to simplify the relationships between property managers and owners, particularly through digitalization.
What Property Diagnostics Are Required for Rentals?
Mandatory:
- Energy Performance Certificate (DPE)
- Habitable Surface Area Report
- Lead Exposure Report (if the property was built before 1948)
- Electrical Installation Report
- Gas Installation Report
- ERP (Natural and Technological Risks) Report: starting June 1, 2020, the ERP must also include "noise zones" defined by a Noise Exposure Plan (PEB).
Upon tenant request:
- Asbestos Report for Private Areas (if the property was built before 1997).
After the ALUR Law, the ELAN Law emerged with a very different philosophy. This new legislation refreshes some existing rules and provides a legal framework for new rental formats and needs.
ELAN Law: 3 Key Points to Remember
- The return of rent control, overseen by the prefect.
- Airbnb-style short-term rentals are limited to 120 nights per year.
- A significant step towards the digital management of all properties.
