THE MUST HAVE CLAUSES IN A RESIDENTIAL RENTAL CONTRACT

When negotiating your “contrat de bail”, you will find obvious to discuss some clauses such as the rental price. Some other clauses do not seem so critical yet it is essential that you check them all so as to understand thoroughly the contract you are entering into.

Personal details of both parties:

  • Communication is key so make sure to mention full current addresses, telephone numbers and email addresses.
  • If a married couple is renting, both names (and details) should be listed so if one partner dies, the other can stay legitimately as long as the terms of the contract are respected.
  • Co-tenants are co-responsible for complying with all the terms of the contract.

The property:

It is important to specify its boundaries and all that is included in it whether it is a parking space, a cellar in a residence, …

The estate agent will have checked the proprietary rights of the landlord prior to signature.

The price:

The current legislation stipulates that the rent can only be adjusted once every 2 years so there is no need to add anything.

The warranty:

A refundable warranty worth a maximum of 3-month rent is requested on the day of entering the property. This warranty is either paid into the landlord’s bank account or it is held as a bank warranty (it stays in the tenant’s bank account but only the landlord can have access to it and so until he/she releases it back). The landlord can only use the warranty to cover the costs of damages incurred by the tenant; under no circumstances does it replace the payment of rent.

The duration of the contract:

It can be unlimited but usually it is limited to a specific duration. Traditionally the banking contracts ran for 3 years so some landlords still impose such a long rental period. However nowadays a period of 1 or 2 years is more commonly requested.

Termination of contract:

  • It is essential to clearly lay out the terms of the termination and those of its renewal. By law the termination of a contract calls for a minimum notice of 3 months. Some contracts stipulate an automatic renewal but make sure you agree with the implied extended rental period.
  • All expatriate tenants insist on the insertion of a “Clause Diplomatique” as it allows them to break a contract before its determined end. However this only applies when the tenant is sent back to his/her country of origin by his/her employer. The 3-month termination notice must still be given and paid for.

The maintenance of the property:

  • Broadly speaking the tenant is responsible for the general day to day upkeep of the property during the occupancy period and the landlord is responsible at all times for maintaining the structure of the building.

It is advisable to list out who is responsible for maintaining specific items so there are no argument down the road (e.g. who maintains the boiler, who cuts the edges in the garden, should the tenant repaint the property before exiting it?).

Fixed rental charges or actualised charges?

Co-rentals do not fall under the general rental legislation of 2006 so quite often the charges are fixed for ease of management. It is up to the landlord to evaluate as accurately as possible what the charges will be. Tenants must be careful that they are not charged outrageous expenses but as it is something they find out before signing a contract, they always have the possibility to say no. The contract must therefore specify that the charges are fixed and not adjustable as a later stage.

Ordinary rentals, however, come with monthly fixed charges which then must be adjusted in relation to the actual costs. Again for ease of management, it is best to ask for a monthly fixed amount. When actual charges are billed to the landlord, he/she has a duty to adjust, ask for an extra payment or reimburse some monies depending on the final balance. The tenant has the right to request copies of actual costs to ensure the billing is correct.

There is one problem though. Bank warranty must be returned to the tenants no later than 6 months if the rental is an apartment (3 months in the case of a house). When the rental is an apartment, it is the management company which receives the invoices and which in turn invoices each landlord. Then the landlord can calculate what is the final balance owed by the tenant. This process is lenghty and the final costs often are known more than 6 months after the tenant has left the property. This explains why landlord are reluctant to release in full the warranty before the due date.

Obviously it is best to remain in good terms with the landlord, especially if a refund is expected. I have come across cases where former tenants were reimbursed by their landlords for over-paid charges a year after their departures. On both sides it is all about honesty.

Termination of contract

It is essential to clearly lay out the terms of the termination and those of its renewal. By law the termination of a contract calls for a minimum notice of 3 months. Some contracts stipulate an automatic renewal but make sure you agree with the implied extended rental period.

All expatriate tenants insist on the insertion of a “Clause Diplomatique” as it allows them to break a contract before its determined end. However this only applies when the tenant is sent back to his/her country of origin by his/her employer. The 3-month termination notice must still be given and paid for.

The warranty

A refundable warranty worth a maximum of 3-month rent is requested on the day of entering the property. This warranty is either paid into the landlord’s bank account or it is held as a bank warranty (it stays in the tenant’s bank account but only the landlord can have access to it and so until he/she releases it back). The landlord can only use the warranty to cover the costs of damages incurred by the tenant; under no circumstances does it replace the payment of rent.

Attention: the setting up of a bank warranty generates bank fees.