Review housing rent
The rent of a building for residential purposes may be reviewed every year at the initiative of the landlord, on the date indicated in the lease or if this is not given, on the anniversary date of the lease. Where there is no review clause, the rent will remain the same throughout the duration of the lease. The review clause takes as its reference the last Rent Reference Index published on the date the lease is signed or the date on which it enters into effect.
You should refer to this index for all leases. Rent reviews may only be made annually and may not exceed the annual variation in this index.
The index is published in the Official Journal. The date of publication of the index in the Journal Officiel serves as a reference.
They are calculated using the Rent Reference Index created by Law no. 2008-111 of 8 February 2008 on purchasing power.
Calculation formula for rent reviews:
The date of the Rent Reference Index to be taken into consideration
With regard to the date of the reference index to be taken into consideration, either the lease specifies this, or if there is no contractual clause determining this date, it is the date of the last published index on the date the lease was signedwhich applies. In the latter case, for a new lease entered into on 1st mars, l'indice du 4eMarch, the index of Q4 of the previous year will then be used to calculate the rent review every year.
The Rent Reference Index is published every quarter by Insee :
- the Rent Reference Index for Q1 is published around 15 April ;
- the Rent Reference Index for Q2 is published around 15 July ;
- the Rent Reference Index for Q3 is published around 15 October;
- the Rent Reference Index for Q4 is published around 15 January of the following year.
The rent concerned
The method described here particularly concerns buildings for residential purposes governed by amended Law no. 89-462 of 6 July 1989, furnished accommodation subject to Article L 632-1 of the French Code on Construction and Housing, the rental payments in lease-option agreements (Article 7 of law no. 84-595) and rent for residential buildings in tenant farming and agricultural lease arrangements (Article L411-11 of the French Rural Code). Business buildings and specific buildings governed by other legal provisions are excluded inter alia.
A lease signed on 1stMarch 2010 for a monthly rent of €500, which may be reviewed annually on the anniversary date of the contract. The quarter to be taken into consideration (if there is no special clause) is the last known quarter on the date the lease is signed, or Q4 2009.
Here is a table of indexes and their annual changes between 2009 and 2011.
tableau Rent Reference Index (IRL) - reference 100 in Q4 1998
|Period||Date of publication in the Official Journal||Rent reference index||Annual variation as a %|
On 1stMarch 2011, the first rent review is made. The Rent Reference Index of Q4 2010 is equal to 119.17. It has increased by 1.45% compared to the figure of 117.47 in Q4 2009.
The new rent will be equal to no more than :
500 x (119,17/117,47) = 507,23589 rounded off to 507,24
The new rent will equal to no more than €507.24.