Rent-free tenancy can cause inheritance issues in France

A recent court case involving a family dispute over inheritance has shown how allowing one of your children to live in a property rent-free can have consequences under French inheritance law.

It involved parents who owned two flats in the Ile-de-France (both worth around €300,000) who allowed a daughter, in financial difficulty, to live in one rent-free for 20 years.

After both parents had died, the woman’s siblings argued that her long-term occupation had reduced the value of the estate, as the parents could otherwise have rented the property out. They therefore sought compensation equivalent to €1,100/month over the period.

However, the law limits such claims to the previous five years, meaning the amount was capped at €66,000. This was treated as a debt owed by the daughter to the estate, which was then included in the assets to be shared out.

In practice, this meant that while the daughter owed €66,000, she was also entitled to a one-third share of this sum as an heir, reducing the amount she effectively had to bear.

As she did not have the means to pay, the heirs ultimately agreed she would receive only her legally protected share of the estate, with the remainder divided between her siblings.

The case highlights how informal family arrangements can create inheritance complications. 

Even where no rent is charged, long-term occupation may be taken into account if it is seen to have reduced the estate’s value.

To avoid disputes, experts recommend formalising such arrangements in advance, for example via a prêt à usage (loan for use), which confirms the occupation is authorised, or by setting up a formal tenancy.