Real estate section of the “Purchasing power” law of August 16, 2022 – Lease

In real estate, law n° 2022-1158 of August 16, 2022 on emergency measures for the protection of purchasing power (OJ of 17 August) first of all includes measures to increase the value of personal housing assistance.

It then puts in place a cap on the revision of rents for residential, rural and commercial leases.

In addition, for residential leases relating to premises located in tight areas, it limits the possibility for the lessor to apply additional rent.

Finally, the legislator has provided details concerning the procedures for interrupting the supply of electricity to a main residence between 1er April and October 31.

It should be noted that the measures concerning APL and rents are (only) cyclical (because they are limited in time). However, they may, of course, be renewed and/or amended if necessary.

Early revaluation of personal housing assistance

Under the terms of article 12 of the new text, all the aid mentioned in article L. 821-1 of the construction and housing code, namely personalized housing aid and housing allowances (family and social) are upgraded on 1er July 2022 by 3.5%.

This revaluation takes place “for 2022, in anticipation and in replacement of the annual revaluation provided for in article L. 823-4 of the CCH” (usually, the revaluation takes place on 1er October for the representative parameters of housing expenditure).

The 2022 law also adds a paragraph to this article L. 823-4 according to which “the date of the rent reference index taken into account for this revision is that of the second quarter of the current year”.

According to the impact study of the text, on this last point it was a question of clarifying the existing law: “by default, it is the last known value which is taken into account in coherence with the wording of article 17-1 of the law of January 6, 1989 which specifies this rule for leases. However, this rule is not written explicitly with regard to the revaluation of the APL”.

Implementation of a “rent shield” for residential and rural leases

Scope. The same article 12 of the new law provides for measures to cap the revision of rents for residential or mixed-use leases in the private sector, i.e. those governed by the law of July 6, 1989 (revision of the rent during the lease and taking into account the evolution of the index within the framework of the setting of the renewal rent in and outside the tight zone), that the rents of the social housing and rents, but also the royalty (and the sale price) due under a rental contract.

Principle of the “rent shield”. “The rent shield” is only temporary, since it only concerns the setting of rent benchmarks between the third quarter of 2022 and the second quarter of 2023.

During this period, the year-on-year change in the reference rent index cannot exceed 3.5% (the increase recorded by INSEE was 2.48% in the first quarter of 2022 and 3.60% in the second Beyond that, according to the law’s impact study, the increase should increase, reaching 4.5%, or even 5% year-on-year in the fourth quarter of 2022).

Derogations. This shield is more drastic for “local authorities governed by Article 73 of the Constitution” (Guadeloupe, Guyana, Martinique, Reunion, Mayotte), since the year-on-year change in the reference rent index may not exceed 2.5%.

Furthermore, in the community of Corsica, for the fixing of the reference indices for rents, the representative of the State may (after consultation for the opinion of the assembly of Corsica), by decree, modulate the variation, within the limit of 1 .5 percentage points.

This modulation must take into account:

– the demographic and social characteristics of the local population, including the poverty rate of the Corsican community;
– the existence of a marked imbalance between supply and demand for housing leading to serious difficulties in accessing housing across the entire existing residential stock;
– the difference between the annual inflation observed in mainland France and that observed in Corsica.

Implementation of a “rent shield” for commercial leases

Scope. Article 14 of the new text targets small and medium-sized tenant businesses, and concerns the revision of the rent for the quarters between the second quarter of 2022 and the first quarter of 2023 (Rappr., le Décr. n° 2022-357 du 14 mars 2022 carrying out a permanent but insufficient overhaul of the ILC calculation formula, Dalloz news, March 17, 2022, obs. Y.Rouquet).

The SMEs in question are, the text specifies, those which “meet the definition of Annex I to Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market pursuant to Articles 107 and 108 of the Treaty”.

Measures to cap the rent review. For these tenants and over the period considered, the annual variation of the commercial rent index (ILC), published by INSEE, taken into account for the revision of the rent cannot exceed 3.5%.

The text specifies that the cap on the annual variation is definitively acquired and the increase or decrease in rent following a subsequent revision cannot take into account the part of the variation in the commercial rent index greater than 3.5% on this same period.

The last value of the ILC (that of 1er quarter 202 taking into account the new composition of the index, reports a variation of + 3.32%, v. Dalloz news, June 24, 2022, obs. Y.Rouquet).

Rent supplement: limitation of the scope of application

Article 13 of the “purchasing power” law modifies article 140 of the ELAN law of November 23, 2018, article relating to the experimentation, in tense areas, of the supervision of residential rents by prefectural means , so as to prohibit the lessor from applying additional rent when the accommodation has one or more of the following characteristics:

– toilets on the landing;
– signs of dampness on some walls;
– a class F or class G energy performance level within the meaning of article L. 173-1-1 of the construction and housing code;
– windows allowing air to pass abnormally outside the ventilation grid;
– a vis-à-vis within ten meters;
– infiltration or flooding from outside the dwelling;
– water drainage problems over the past three months;
– a degraded electrical installation;
– or poor exposure of the main room.

Even if the text does not say so, one can imagine (or, at the very least, hope) that an application decree will specify some of these criteria (which signs of humidity must be taken into account? What is is an abnormal rate of air? What should we understand by “exhaust problems”?).

Conditions for interrupting the supply of electricity in a main residence

Article 35 of the law of August 16, 2022 supplements article L. 115-3 of the social action and family code, which is part of a chapter relating to the fight against poverty and exclusion.

Until then, this text specified that from 1er November of each year to March 31 of the following year, suppliers of electricity, heat, gas (and, throughout the year for water distributors for the distribution of water) cannot proceed , in a main residence, to the interruption, including by termination of contract, for non-payment of bills, of the supply of electricity, heat or gas to individuals or families.

If a reduction in power by the supplier nevertheless remains, in principle, possible, it is excluded with regard to consumers in a situation of energy poverty.

From now on, it is expected that “the rest of the year [soit, du 1er avr. au 31 oct.]electricity suppliers may only interrupt the supply of electricity in a main residence, including by termination of contract, for non-payment of bills, after a period of power reduction, which cannot be less than one month, allowing the household to satisfy its basic needs of daily life and hygiene.

The terms of application of this new provision, in particular the beneficiaries and the duration of this measure, are referred to the issuance of a decree in Council of State.

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