A leading property manager in Paris has been ordered to pay €55,000 to a client after putting forward a tenant for her flat despite the tenant earning less than half the required rent
A lawyer has called the case a “judicial first” in France.
A 74-year old woman handed management of her Parisian flat to the property manager in 2004, who in turn contacted an estate agency to help find a suitable tenant.
A tenant put forward by the agency, however, was a retired single woman, earning the minimum pension of €706 a month. The monthly rent on the flat was over €1,500.
Owner not informed
The owner was not informed of the client’s situation by the property manager and subsequently entered into a lease with her.
A savings pot of €90,000 was partially used by the tenant to pay rent, but soon she was unable to keep up with payments – however she did not leave the flat until 2018.
At the time of departure she had accrued rental arrears of over €69,000.
The original owner has since died, but in 2016 the heirs of the property became aware of the financial mismanagement and demanded explanations.
80% of rental payback in compensation
“I discovered that the agent had entered into the lease without checking the tenant's solvency," their lawyer Xavier Demeuzoy told Le Figaro.
This is in contravention of Article 1991 of the French Civil Code.
The Paris courts ruled in favour of the new owners in 2020, citing the property manager did not “seriously and rigorously ascertain (the tenant's) ability to pay the rent over the long term.”
The property manager also influenced the owner to take out certain bank guarantees on the property, including one to replace a tenant if they can no longer pay the rent.
The courts ordered that the mismanagement of the portfolio related to a “loss of income” for the owners, and ordered the property manager to pay back €55,000 – 80% of the estimated loss of rent caused by picking such a tenant.
The plaintiffs’ legal fees and additional damages – at a cost of €1,500 each – were also required to be paid by the property manager.
Appeal falls on deaf ears
The property manager’s appeal of the original ruling was shut down by the courts earlier this year.
He claimed the fault lay with the estate agency for the selection of the tenant, but the court rejected this:
“This (estate agency’s) company's sole remit was to find a tenant, propose candidates and draw up the lease. In all these respects, it fulfilled its mission,” said the court in its statement.
“It is not responsible for the fact that (the property manager) agreed to sign the lease with full knowledge of the applicant's fragile financial situation,” it added.