Presentation of the main provisions of Law No. 2014-366 of March 24, 2014 for access to housing and renovated urban planning (excluding provisions relating to urban planning law)

Among the most significant changes introduced by the Alur law is the introduction of a rent control mechanism in so-called “tense” areas.

These areas correspond to areas of continuous urbanization of more than fifty thousand inhabitants where there is a marked imbalance between supply and demand for housing, leading to serious difficulties of access to housing on the whole of the existing residential stock, which are characterized in particular by the high level of rents, the high level of acquisition prices for old housing or the high number of requests for housing in relation to the number of annual moves into the social rental stock.

These provisions entered into force on March 27, 2014 but remain subject to the publication of the decree defining the list of municipalities concerned.

I. Creation of local rent observatories

Local rent observatories can take the form of associations or public interest groups. These local observatories of rents can be created on the initiative of local authorities, public institutions for inter-municipal cooperation with their own taxation competent in matters of housing or the State.

Their mission consists in particular in collecting data relating to rents in a given geographical area and making available to the public representative statistical results on this data. The reference stock for the observation and analysis of rents is made up of all the premises for residential use or for mixed professional and residential use, with the exception of those belonging to HLM organizations and semi-public companies building and managing social housing, as well as those belonging to bodies benefiting from project management approval.

The local rent observatories are approved by the minister responsible for housing, after consulting the regional committee for housing and accommodation or the departmental council for housing and accommodation, subject to compliance with the methodological prescriptions issued. by an independent scientific body. Accreditation is only granted to observatories whose statutes ensure the balanced representation of lessors, tenants and managers within their governing bodies as well as the presence of qualified personalities within these bodies.

The observatories transmit all of their data to the national association mentioned in the third paragraph of article L. 366-1 of the Construction and Housing Code.

II. Rent control

The provisions relating to the supervision of rents were introduced in article 17 of law n°89-462 of July 6, 1989 aimed at improving rental relations. These provisions return to the principle of freedom to set the amount of the rent.

HAS . Establishment of reference rents

In tense areas, the representative of the State in the department fixes each year, by decree:

• a reference rent, equal to the median rent calculated from the rent levels noted by the local rent observatory according to the housing categories and geographical sectors.
• an increased reference rent equal to an amount 20% higher than the reference rent.
• a reduced reference rent, set by reducing the reference rent, is equal to the reference rent less 30%.

These rents are expressed by a price per square meter of living space, by category of housing and by geographic sector. Housing categories and geographic sectors are determined according to the structure of the rental market noted by the local rent observatory.

B. Determination of rents

In the areas where the decree applies, the base rent for rental accommodation is set freely between the parties when the lease contract is concluded, within the limit of the increased reference rent.
Outside these areas, the setting of the rent for rented accommodation is free. An action to reduce the rent may be initiated if the base rent provided for in the lease contract is higher than the increased reference rent in force on the date of signature of the said contract.
A rent supplement may be applied to the basic rent, for accommodation with location or comfort characteristics compared to accommodation of the same category located in the same geographical area.
The terms of application of this article will be specified by decree in Council of State. The amount of the additional rent and the characteristics of the accommodation justifying it are mentioned in the lease contract. These characteristics of location or comfort will make it possible to fix a rent of a total amount higher than the increased reference rent. The tenant who wishes to dispute the additional rent has a period of three months from the signing of the lease to seize the departmental commission of conciliation. In the event of a dispute, it is up to the lessor to demonstrate that the accommodation has characteristics of location or comfort compared to accommodation of the same category located in the same geographical area.

VS . Rent review

The revision of the rents is provided for by the contract, it takes place each year on the date agreed between the parties or, failing that, at the end of each year of the contract.
The variation may not exceed, upwards, the variation of a reference index of rents published by INSEE each quarter.
This index corresponds to the average, over the last twelve months, of the evolution of consumer prices excluding tobacco and excluding rents. In the absence of a contractual clause fixing the reference date, this date is that of the last index published on the date of signature of the rental contract. Failing to express his will to apply the rent review within one year of its effective date, the lessor is deemed to have waived the benefit of this clause for the past year.
If the lessor expresses his desire to revise the rent within one year, this rent revision takes effect from his request.
The revision cannot therefore be retroactive. When the parties have agreed, by an express clause, on work to improve the accommodation that the lessor will have carried out, the rental contract or an addendum to this contract may fix the increase in rent following the completion of this work. In this case, the increase cannot be the subject of an action to reduce the rent.

D. Renewal of the rental contract

In tense areas, it is in particular provided that:

• The lessor can take action to reassess the rent when the amount is lower than the reduced reference rent.
• The tenant can take action to reduce the rent when the amount, excluding the supplement, is greater than the increased reference rent.

In these two cases, one or the other of the parties can propose a new rent to its co-contracting party, at least six months before the end of the contract for the lessor and at least five months before the end of the contract for the tenant.

III. Provisions to ensure the tenant's financial security

Among the provisions to ensure the tenant's financial security are the following rules:

HAS . Security Deposit Provisions

The provisions relating to the security deposit relate in particular to its amount and the methods of restitution. The law does not go back on the limitation to one month of the security deposit for unfurnished rentals provided for by law no. 2008-111 of February 8, 2008 but limits this amount, with regard to rentals of furnished accommodation, to two months' rent.
In addition, a security deposit cannot be provided when the rent is payable in advance for a period of more than two months, instead of one month previously.
The deposit is returned within a maximum period:

• one month from the handing over of the keys by the tenant, when the exit inventory is consistent with the entry inventory.
• two months from the hand delivery, or by registered letter with acknowledgment of receipt, of the keys to the lessor or his agent

The return period is therefore reduced in the event of a compliant inventory.
In the absence of restitution within the deadlines, the amount due is increased by an amount equal to 10% of the monthly rent for each period started. However, the lessor has the option of retaining an amount corresponding to at most 20% of the deposit until the annual closing of the building's accounts.

B. Tenant's notice period in tense area

The tenant's notice period is reduced to one month in tight areas.

Second Part – Amendments to the “Hoguet” law

The Alur law modifies the conditions for exercising certain professions.
Thus, the Hoguet law (law n° 70-9 of January 2, 1970 regulating the conditions for the exercise of activities relating to certain transactions relating to buildings and businesses) now expressly mentions that it applies to natural persons or legal entities exercising in the usual way, the functions of co-ownership trustee, even if this point was acquired. The amendments made to this law are applicable to contracts concluded since March 27, 2014.
The law also establishes an obligation to train real estate professionals.
Failing this, their professional card cannot be renewed. The issue of the professional card is subject to additional conditions.
Individuals must prove their professional aptitude but also a financial guarantee allowing the reimbursement of funds, effects or value deposited and allocated to the latter, including the sums paid into the works fund mentioned in article 14-2 of Law No. 65-557 of July 10, 1965 establishing the status of co-ownership of built buildings. It is also added that only financial guarantors who have implemented internal control procedures, by means of a reference system and risk monitoring models, are authorized to issue the financial guarantee. A Conseil d'Etat decree must define the procedures and conditions under which the guarantors carry out their missions of control over the funds they guarantee. The law establishes a National Council for Property Transactions and Management. This council's mission is " to ensure the maintenance and promotion of the principles of morality, probity and competence necessary for the proper performance of the activities [of persons subject to the Hoguet law]".
The Council proposes the rules constituting the code of ethics, the nature of the obligation of professional aptitude, the nature of the obligation of professional competence and the nature and methods according to which continuing education is accomplished. The Board is mainly composed of representatives of persons subject to the Hoguet law. Consumers, chosen from consumer defense associations, are also represented. In order to ensure more effective control, a chapter relating to the discipline of professionals. Provision is therefore made for the creation of a disciplinary body, the Commission for the Control of Real Estate Transaction and Management Activities. The commission can pronounce different types of sanctions such as a warning or a temporary or permanent ban on practicing. The decisions rendered by this commission are subject to appeal before the administrative courts.

Third part – Information for buyers of co-owned lots

The law for access to housing and renovated town planning imposes new obligations on the seller of real estate subject to the status of co-ownership of buildings in order to provide the buyer with better information on the condition of the property and its legal and financial situation.
Additional information and documents are now essential when drafting the offer of sale and when signing the notarial deed.
Except for exceptions, which will be specified, the provisions presented entered into force on March 27, 2014.

I. Provision of a summary sheet

 The trustee administering residential buildings must establish and update annually a summary sheet of the co-ownership.
This must be made available to the co-owners and includes the essential financial and technical data relating to the co-ownership and its buildings, the content of which is defined by decree. Failure to comply with this obligation is grounds for dismissal of the trustee. In addition, trustee contracts must provide for an automatic fixed financial penalty against the trustee each time the latter does not make the summary sheet available to a co-owner within a period of fifteen days from the request.
This penalty is deducted from the trustee's remuneration. The application over time of these provisions is distributed over time according to the same procedures as those of the register of co-ownerships (see below). The provisions relating to the summary sheet are applicable on:

• December 31, 2016, for syndicates of co-owners with more than 200 lots;
• December 31, 2017, for syndicates of co-owners with more than 50 lots;
• December 31, 2018, for the other syndicates of co-owners.

II. Information for the buyer

A. Information contained in the offer to sell

Tenders must mention:

1. Condominium status
2. The number of batches
3. The average annual amount of the share, payable by the seller, of the estimated budget corresponding to current expenses
4. If the syndicate of co-owners is the subject of proceedings due to financial imbalances

No details are provided on the sanction incurred when these mentions do not appear in the offer.

B. Mentions relating to the area in the promises of sale, purchase or authentic deed

The promise of sale, purchase or the deed noting the sale must contain the mention of the surface of the private part of the lot or the fraction of the lot as well as its habitable surface.
The surface of the cellar and parking space is not to be included in the surface area of ​​the private portion. The lack of mention may result in the nullity of the deed at the request of one of the contracting parties within a period of one month from the authenticated deed. However, it is provided that the signing of the authentic deed of sale mentioning the area entails the forfeiture of the right to initiate or pursue an action for nullity of the promise or the contract which preceded it, based on the absence of mention of this surface.
In the event that the mention is made but is erroneous:

• If the area of ​​the private portion is greater than that expressed in the deed, the excess does not give rise to any additional charge.
• If the area of ​​the private portion is less than one twentieth of that expressed in the deed, the seller, at the request of the purchaser, bears a reduction in the price proportional to the lesser measure. The action must be brought by the purchaser within one year of the authentic deed, on pain of forfeiture.

These provisions come into force on June 24, 2014.

III. Documents required for the sale

In the event of the sale of a lot or a fraction of a lot or the transfer of a real estate right relating to a lot or a fraction of a lot of a building constructed for total or partial residential use, are annexed the promise of sale or, in the absence of a promise, the authentic deed of sale, in addition to the technical diagnostic file, the following documents:

1. The documents relating to the organization of the building, namely, the summary sheet, the rules of co-ownership, the descriptive state of division as well as the acts modifying them, if they have been published and the minutes of the meetings general data for the last three years, if the seller has them;
2. The documents relating to the financial situation of the co-ownership and the selling co-owner, namely the amount of the current expenses of the provisional budget and the expenses outside the provisional budget paid by the selling co-owner for the two accounting years preceding the sale. For syndicates comprising more than ten lots, the information must also relate to the sums which may remain due by the seller to the syndicate of co-owners and the sums which will be due by the purchaser as well as the overall state of unpaid charges within union and debt to suppliers. When there is a works fund, the amount of the part of the works fund attached to the main lot sold and the amount of the last contribution to the fund paid by the selling co-owner in respect of his lot must be mentioned;
3. The maintenance log of the building;
4. A certificate mentioning the area of ​​the private portion and the living area of ​​this lot or fraction of a lot;
5. An information notice relating to the rights and obligations of the co-owners as well as to the functioning of the bodies of the syndicate of co-ownership. An order from the minister responsible for housing determines the content of this notice;
6. If applicable, the overall technical diagnosis and the multi-year work plan.

In the absence of annexation to the promise of sale or, in the absence of a promise, to the authentic deed of sale, the purchaser acknowledges that the notary or the seller has given him the rules of co-ownership, the maintenance book and the descriptive statement of division.
When the documents mentioned in 1, 2 and 4 are not appended to the notified document, the withdrawal or reflection period provided for in article L 271-1 of the Construction and Housing Code only runs from the day following the communication of these documents to the purchaser.

Part IV – Provisions applicable to co-ownerships

The modifications in terms of co-ownership law were inserted mainly in law n° 65-557 of July 10, 1965 fixing the status of co-ownership of buildings, but also in the construction and housing code.
They consist of the creation of a register of registration of co-ownerships, better information for buyers and the prevention of their degradation. This last theme is divided into two parts which relate respectively to improving the management of condominiums with a view to preventing their indebtedness, and preventing deterioration by facilitating the carrying out of work. In addition, the law modifies the regime applicable to degraded properties. New rules are applicable to the provisional administration procedure and the insolvency procedure. Finally, the law provides for recourse to the requalification by the public authorities of degraded co-ownerships. These last two procedures will not be mentioned insofar as they are exceptional application rules.

I. The condominium register

As of December 31, 2016, for syndicates of co-owners with more than 200 lots, December 31, 2017, for syndicates of co-owners with more than 50 lots and from December 31, 2018, for other syndicates of co-owners, syndicates of co-owners are required to declare the following data to the register:

1. The name, address, date of creation of the syndicate, the number and nature of the lots that make up the co-ownership as well as, where applicable, the name of the syndic;
2. If the union is subject to legal proceedings due to financial imbalances;
3. If the syndicate is the subject of an order or an injunction due to unsanitary problems;
4. At the end of each accounting year, the essential data relating to the management and the accounts of the syndicate, resulting in particular from the provisional budget, the accounts of the syndicate and their appendices must be filled in;
5.  The essential data relating to the building taken, where applicable, from the maintenance log and the overall technical diagnosis, when these are not already provided by the tax services.

In practice, the declaration is made either by a notary or by the trustee, the transmission of data is dematerialized. The terms of entry into force of these provisions are identical to those adopted for the implementation of the summary sheet, containing information relating to co-ownership.

II. The management of the condominium

A.  The trustee

When the trustee is not a professional, he must own one or more lots in the co-ownership.
As of January 1 ^, 2015, the professional trustee will be required to offer secure online access to dematerialized documents relating to the management of the building or the lots managed, unless decided otherwise by the general meeting.
The trustee is also required to submit, at the time of his first appointment and at least every three years, to the vote of the general meeting the decision to constitute special provisions in order to face the maintenance or conservation work of the parties. common areas and items of common equipment, likely to be necessary within the three years to come and not yet decided by the general meeting and to open a separate bank or postal account in the name of the syndicate into which all sums or securities received in the name or on behalf of the syndicate.
The trustee will have to respect a period of three to renounce his mandate.

B. Obligation to participate in charges and works

The obligation to participate in the charges and work incumbent on the co-owners is reaffirmed by law.
The text specifies in particular the obligation of insurance and the various charges to which the co-owners are bound. In the absence of payment of the provisions on the due date, the president of the tribunal de grande instance ruling as in the matter of summary proceedings may condemn the defaulting co-owner to payment after formal notice by registered letter with request for acknowledgment of receipt remained unsuccessful.
The law provides that the voice of the defaulting co-owner is not taken into account in the counting of the majority in the event that the general meeting votes to authorize the trustee to take legal action to obtain the seizure with a view to the sale of a lot from a debtor co-owner.

C. Voting methods at general meetings

Voting procedures at general meetings have undergone several changes aimed at promoting decision-making at general meetings.
The list of decisions taken by majority in article 24, ie by a majority of the votes of the co-owners present or represented, is completed. From now on, decisions are also taken according to this majority concerning:

• The work necessary for the preservation of the building as well as the preservation of the health and physical safety of the occupants, which includes work relating to the stability of the building, the enclosure, the cover or the networks and the work to ensure the compliance of housing with health, safety and equipment standards. These decisions were previously taken by a majority of the votes of all the co-owners.
• The procedures for carrying out and executing work made compulsory by virtue of legislative or regulatory provisions or an administrative police order relating to public health or safety. Previously, this decision had to be taken by a majority vote of all the co-owners.
• The procedures for carrying out and executing the work notified under Article L.313-4-2 of the Town Planning Code, in particular the option for the syndicate to ensure the project management of the work relating to the private portions of all or part of the co-owners;
• The adaptations of the co-ownership rules made necessary by the legislative and regulatory changes that have occurred since its establishment.
• The decision to initiate the overall technical diagnosis provided for by the new article L. 731-1 of the construction and housing code, as well as its implementation methods.

The list of decisions taken by majority in article 25, in other words by a majority of the votes of all the co-owners, is shortened. Decisions such as:

• The appointment or dismissal of the trustee.
• Changes in load distribution. However, when the majority is not reached but the project collects at least two-thirds of the votes, the assembly may proceed immediately to a second vote by a majority of the votes cast.
• Any delegation of power concerning the implementation and monitoring of the works and contracts financed within the framework of the provisional budget of charges in the co-ownerships of 15 lots at most. In the latter case, the members of the union council must be covered by civil liability insurance.
• All work involving transformation, addition or improvement, which was partly covered by the majority of Article 26.
• The request for the individualisation of water supply contracts and the carrying out of the studies and work necessary for this individualisation, which previously fell under the majority of article 26.

Finally, provision is made for the same decisions as before, namely decisions concerning deeds of real estate acquisition and deeds of disposal not relating to the common portions or rights ancillary to these portions, certain amendments to the co-ownership regulations, the procedures for opening the access doors to the buildings and the removal of the caretaker's post.

III. Preventing the deterioration of condominiums

A. Appointment of an ad hoc representative

The percentage of unpaid debts necessary to request the appointment of an ad hoc agent is lowered from 25% to 15% for co-ownerships of more than 200 lots.
The amendments made to the provisions relating to this procedure aim to specify the missions and the conditions for carrying them out by the ad hoc representative and the receiver.
The ad hoc agent's mission is to draw up a report presenting the analysis of the financial situation of the syndicate of co-owners and the state of the building and the recommendations made to restore the financial balance of the syndicate while the administrator judiciary exercises the functions of trustee. The effects of the order appointing the administrator have been extended to include the suspension of the payment of debts prior to the decision for a period of twelve months and to interrupt or prohibit any action tending to the resolution of a contract for default of payment.

B. Role of the provisional administrator

The provisional administrator draws up a debt clearance plan for a maximum period of five years.
At the request of the administrator, the judge can erase all or part of the debts.
The amount erased is distributed among the syndicate's creditors in proportion to the amount of their claim and integrated by the provisional administrator into the debt clearance plan. The administrator can also ask the judge to pronounce the constitution of one or more secondary syndicates or the division of the syndicate, if it appears that the normal functioning of the co-ownership cannot be restored otherwise. The temporary administrator can propose to the representative of the State in the department to initiate a backup plan. He may also sign any financial agreement with a view to the allocation of public subsidies to the syndicate of co-owners, provided that this agreement is not contradictory with the mission entrusted to him.

C. The reinforced provisional administration

Reinforced provisional administration may be pronounced by the judge at the request of the provisional administrator, in particular, when the financial situation of the co-ownership does not allow the work necessary for the conservation and security of the building to be carried out, the protection of the occupants, the preservation of their health and the reduction of co-ownership charges allowing its financial recovery.
In this context, the administrator is authorized to sign a fixed-term agreement, on behalf of the syndicate of co-owners, with one or more competent operators in terms of project management of works and development of financing of operation of works.