Squatters, sublets and chateaux sales: Five French property updates

New service to help victims of squatters

A new procedure, launched on February 1, means that bailiffs can now guide property owners who are victims of squatting through the entire process of recovering their property.

The bailiffs will offer free advice to homeowners, but there will be a fee of around €200 to €300 for their assistance in the process, to be specified depending on the case.

In France, there are two different procedures in place to reclaim a property that has been taken over by squatters. One is by judicial means meaning it must go through courts. This can often take a very long time.

The second procedure is administrative. Bailiffs have not, until now, been able to assist homeowners in this procedure.

This is usually much more efficient, with the situation usually resolved within 72 hours. However, it took longer than this in 40% of cases in 2021, Le Figaro reports.

The goal of the new right afforded to bailiffs is to guide homeowners towards using this administrative procedure and to help them to navigate the different steps involved.

So far, this help is not well known, and is therefore underused, the national chamber of bailiffs (the Chambre nationale des commissaires de justice) highlighted.

“For the property owner, this new service guarantees the complete supervision of the procedure by a legal professional who will be the main contact with the public services,” the CNCJ stated.

You can find a bailiff near you at this website.

Steps to reclaim a property via the administrative procedure

Read more:Success of new squatter law in France is 'postcode lottery'

Read more:Lyon allows first official squat in building awaiting renovation

Lower-budget chateaux proving popular

Buyers looking to acquire a French chateau or large countryside manor area increasingly favour lower priced properties, particularly those under €800,000.

This trend has, in part, been caused by the coronavirus pandemic, which has meant fewer wealthy buyers from North America and Asia and more local French buyers.

The proportion of total sales of properties of this type - chateaux and large countryside houses - that cost under €800,000 increased from 30% in 2019 to 38% in 2021.

In addition, the proportion of sales of properties costing between €800,000 to €1million increased from 15% to 22% in the same time frame.

Meanwhile, properties costing over €2million made up 11% of total sales in 2021, as opposed to 20% in 2019, and properties costing between €1million and €2million made up 29%, compared to 35% in 2019.

The preferred budget for buyers is somewhere around €500,000.

“This trend can be explained by the desire of clients to buy, at the same price as a flat in the city, a beautiful property in a rural or suburban area," said Olivier de Chabot-Tramecourt, general director of Mercure France, a real estate agency specialising in the sale of chateaux.

“Offering oneself a slice of the dream has become a credo for new Châtelites who dare to be adventurous; pleasure and space having become central values,” he told Figaro Immobilier.

One example of a chateau selling cheaply was the 1,400m² Château de Nescus in southwest France, which went for €205,000 at auction in September 2021.

The chateau was first built in around 1700 for local nobles, before being destroyed by a fire in 1918.

It was later rebuilt after World War Two as a holiday centre (colonie de vacances) for children from Paris and fitted with large communal bathrooms, dormitories and kitchens.

It had been abandoned for some years before the new owners bought it last year.

Read more:1,400m² chateau in southwest France sells for €205,000 at auction

Read more:Chateau an hour from Paris available to part-own for less than €60

Illegal subletter fined €25,000

A tenant has been handed down a fine of just over €25,000 for illegally subletting a flat in France on Airbnb.

It is the first case of a tenant having to pay a landlord back the full sum of money made by sub-letting, with the decision made in mid-January following an appeal.

The tenant left the flat in 2019.

The court decision ruled that she had been illegally subletting the property on Airbnb between 2011 and February 21, 2018, when the landlord found out about it.

The former tenant was originally handed down a fine of €46,000, but this was reduced by the appeals court.

This is because of la prescription quinquennale, a rule that means payments due to someone cannot be backdated more than five years, meaning the tenant could only claim money taken from subletting starting on February 21, 2013.

The court also took into account the rent money the former tenant paid to the landlord, reducing the fine to the final €25,856.

It should be noted that the landlord has the right to claim back money from Airbnb as well as the former tenant, following a precedent set in 2020.

Gabriel Neu-Janicki, a lawyer specialising in property law, said that people are often ignorant of the seriousness of illegal subletting.

“Tenants who sublet illegally are often unaware of the risks they are taking, while landlords are also often unaware of their full rights,” he told Figaro Immobilier.

He added: “They may think it is illegal but often do not know that they can get back all the money paid from subletting, and terminate the rental agreement.”

Taxe foncière to increase, what exemptions are there?

Property owners face a certain rise of at least 3% in taxe foncière this year as key components which make up the property-owners’ tax have risen.

First, the property’s notional rental value (valeur locative) rises with the 2.8% inflation rate due to higher energy costs. Figures for December and November show inflation at 2.8%, after 2.6% in October.

Secondly, the government has increased its base taxation level by 3.4%. This is the highest since 1989 and a significant increase on 2021’s 0.2%.

The remaining factor is local councils’ tax rates but these are not yet known.

However, the national statistics agency Insee said the other rises meant the tax would increase by at least 3%.

Read more:Homeowners’ local tax to increase by at least 3% this year in France

There are some situations that exempt individuals from paying either all or part of the yearly property tax.

You can read a full guide to that in our article here: Taxe foncière property tax in France: What exemptions exist?

To summarise, newly built residential properties can be exempt for two years following building completion.
This is also the case for extensions or renovated areas of non-new builds – this includes verandas, swimming pools, etc. Only the newly constructed or renovated area is eligible for an exemption.

The work must be declared to the tax authority within 90 days of completion.

It should be noted that this exemption does not apply in some 3,769 communes in France where the local authority has scrapped it so you should check first.

There are also exemptions or reductions for retirement-age people with an income below a certain threshold, people who receive disability benefits, and more broadly people with low incomes.

Also, individuals can receive a tax rebate if a property that would normally be rented out is left empty. This vacancy must be outside of the owner’s control, last at least three months and concern the whole property.

The house or flat must be in a condition appropriate for habitation, and the landlord must have made reasonable efforts to rent it out.

Read more:How is property tax shared out for sale of French second home?

Read more:Couple find solution to French second home tax retention on house sale

Can a bank refuse a mortgage on a property with a poor energy performance score?

Yes, but there is no legal requirement.

This situation was highlighted recently by a woman who posted her experience in a Facebook group for property owners. She said that she was refused a mortgage by a bank because the property she wanted to buy had an energy performance rating of E.

This rating system, called Diagnostic de performance énergétique (DPE), classifies properties from A to G, with A being the best.

Michael Benchabat, founder of MeilleursBiens, a site that advertises properties, told Capital he was surprised by the decision.

He said that there is no law that stipulates that a bank cannot provide mortgages for properties of this type, however they do have the right to refuse any mortgage request.

He suggested the woman try another bank or go through a mortgage broker.

While there is no law preventing a bank from giving a mortgage on a property with a poor energy rating, it is increasingly difficult to sell or rent these properties.

As of this year, all properties with a rating of E or below that are put up for sale must by law have an energy audit of the building carried out.

From 2023, buyers or renters of these same properties will be able to legally demand the owners to carry out renovation work to improve the energy rating.

As of 2028, renovation work to improve the energy rating of a property will become mandatory.

Read more:What is the impact of energy ratings on French house prices?

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