Paris targets short-term rentals

PROPERTY-owners in Paris who offer short-term rental contracts have been warned they face a large fine and a criminal record if they fail to get the necessary permission from the city council.

The Mairie de Paris has launched a crackdown on holiday lets and tenancies of less than a year, which it believes artificially force up prices and contribute to a severe shortage of affordable housing in the capital.

The council is understood to have set up a 25-person team to send cease-and-desist letters to homeowners whose properties are listed with letting agencies, reminding them their home must be reclassified as commercial property to legally offer short lets.

Renting out a flat for less than a year in Paris is illegal if is still classified as residential land instead of commercial – although nine-month contracts are allowed for students.

The punishment is a fixed fine of €25,000 plus €1,000 per square metre per day that the illegal use continues.

The mairie believes that 38,000 properties within the capital are being let illegally. It hopes that the threat of action will put more long-term housing back on the rental market and bring life back to certain districts.

Although the crackdown is mainly targeted at professional buy-to-let landlords, anyone with a second home in the capital who rents it out for short periods is also affected.

Insurers might refuse to pay out, considering the policy invalid.

A change in legal status is time-consuming as it requires the consent of every landlord in a shared property (copropriété) as well as the management committee (syndic) that runs the communal areas. It is also expensive: applicants wanting to turn a home into a commercial area must agree to buy a similarly-sized commercial property in the same arrondissement and turn it into housing.

The Code de la Construction et de l’Habitation has allowed local councils in any town with more than 100,000 residents to regulate short-term lets since 1978. However Paris is the only place that has applied it and has been actively pursuing illegal landlords in recent years as rents rose and cheap housing availability dried up.

About half-a-dozen legal cases are being prepared by the mairie and could be heard later this year, and will set an important precedent for other action.

A group of more than 100 letting agencies in the capital have set up a €100,000 fighting fund to defend their landlord members.