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The following article was written by the author Charles Davey, a practising barrister. For further information on renting, letting, buying and selling property in France see "The Complete Guide to Buying Property in France" published by Kogan Page. There is a substantial unmet demand in many areas of France, notably near the coast, for both holiday and longer-term rentals. As to holiday lettings France remains the top European tourist destination, with the Côte d'Azur a favourite amongst the French and foreigners alike. The letting season starts as early as May and extends well into September, and is so lucrative that many local residents let their homes out for some or all of the summer.
You can manage the lettings yourself, placing advertisements on internet sites or in newspapers and magazines in France or abroad or instruct an agent (many are English-speaking). There are few controls over this sector, and you have the advantage that in most cases the nuisance tenant will not be staying. Even if he does overstay his welcome, he has relatively few rights. Longer-term lettings - remember that the rental market for unfurnished properties is subject to extensive regulation. These provisions override the terms of any written or oral contract. A tenant is normally entitled to stay for three years, and has a right to a further three-year extension. During this time it is impossible to obtain possession of the property, save on narrow grounds such as substantial rent arrears or damage to the property. Even then, obtaining possession can be a lengthy process with the courts willing to give the tenant one or more opportunities to remedy his default. A proprietor can, for family or professional reasons, let his home for less than three years. For example if he is working abroad, or a long way from home and wishes to return to live in his property at a later date. The tenant must be entitled to remain for at least one year, and Le Contrat de Bail must set out the basis on which the proprietor is entitled to rent for less than three years. At least two months prior to the termination of the tenancy, the proprietor must confirm that he is entitled to and wishes to obtain possession. Failure to do so within the regulations (which require notification by recorded post) will normally result in the tenancy continuing as a three-year tenancy. Landlords are entitled to demand a caution, limited to two months' rental, and payable upon the commencement of the tenancy. It should be repaid within two months of the end of the tenancy, less any sums owed by the tenant. Before a tenant moves in, or leaves, you should arrange for an Etat des Lieux to be drawn up setting out the condition of the property. This is normally carried out by a huissier (at a cost of around 230 euros split equally between landlord and tenant). As a landlord you are responsible for maintenance of the structure of the building, including the roof and boundaries, the stairs, the shutters and windows, the boiler and chimney. The tenant is responsible for running repairs, i.e, minor works of maintenance to prevent the building falling into disrepair, such as painting, replacing window panes, cleaning, and minor repairs of pipe-work, taps and radiators, replacing the odd broken floor tile. There is always the possibility, however you let out your property, of encountering the nightmare tenant who will not leave, or who causes damage to your property. Insurance is available for just such eventualities. There are a variety of different levels of cover, including legal expenses and lost rental. You are not permitted to require payment of rent by a direct debit, or direct from a tenant's salary. When letting on a longer-term basis you should consider letting the property furnished. The furnished sector is not regulated. You can rent out for one or two years and are entitled to possession at the end of the rental period. Financial Matters - do obtain expert advice as to the various financial incentives and tax consequences. Incentives are available to encourage the building and acquisition of properties for renting, including la loi Besson. This provides certain tax advantages where a property is to let for at least nine years (a possible option for a couple purchasing a home for their future retirement). Remember that French property is subject to French inheritance rules, and inheritance tax, as well as potentially capital gains tax and wealth tax. Income tax is payable on income from French property even if you are resident abroad and receive the income there. Be sure to retain receipts for all expenses as many will be deductible against income tax. The above article is for general guidance only. You should obtain your own up to date legal advice relating to your own circumstances, before making any commitment in relation to letting your property, or buying property to let.
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