Will the Macron Law make things easier?

The Macron Law passed in France in August 2015, is designed to reduce the amount of red tape that exists in the French system.

Named after the French Economy Minister, Emmanuel Macron, the Macron Law has brought about changes in many areas of the law, including in the field of real estate; one of its aims is to reduce the number of court cases relating to planning permission issues.

This article summarises the main changes of interest to owners of French property and those people thinking of investing in a house in France. 

• Can my neighbour get my house demolished?
• What can I build on agricultural land?
• How long will I have to wait to get planning permission?
• What do I need to know about the changes to renting in France?
• Buying and selling
• How do notaires calculate their fees for conveyancing?
• Code of Ethics

Can my neighbour get my house demolished?

There have been cases of frivolous claims started by disgruntled neighbours trying to get the demolition of a construction they didn’t like. They did this by getting the planning permission which had been previously granted, cancelled, often over technicalities such as the absence of posting the planning permission for the prescribed time or the absence of evidence of such posting by way of a bailiff statement. Such attempts did not necessarily fare well in the end, but sometimes they ruined projects anyway as by the time the matter was examined by a court, one or two years could elapse during which the owner would not be able to build (or would do so at his own risk).

This is now only an option for unhappy neighbours in a limited range of areas:

• natural reservations and protection perimeters, the 100 metres strip of land adjoining the seafront, areas protected by the ‘mountain law’ and areas labelled ‘Natura 2000’ which are protected sites for rare or threatened species.
• Sensitive areas, such as areas in which a particular protection exists in the vicinity of classified installations where the environment code imposes or restrictions on building.
• Certain areas which are protected owing to the existence of an architectural patrimony which requires preservation (listed buildings etc.)

The above restrictions to the right to bring a claim for demolition did not exist previously. The two conditions which existed earlier are maintained.  They are:

The property considered must have been built in compliance with a planning permission previously obtained and such planning permission must be cancelled later;

The action in demolition must be initiated within two years from the decision of cancellation of the planning permission by the administrative court becoming final.

This change will add additional legal safety for bona fide owners who have built on their land and will greatly limit the power of nuisance of obnoxious neighbours.  

What can I build on agricultural land?

Previously, trying to build in agricultural zones could be frustrating and restrictive.  It was only possible to do two things: build a construction for an agricultural user or to turn a former agricultural building into a house, provided that the footprint was not modified in any way and so long as the external appearance remained consistent with the agricultural environment.

In practice, this led to situations where non-farmer property buyers could possibly turn an old farm or barn into a house, but certainly could not build extensions or add outbuildings or swimming pools etc.  It even caused problems for actual farmers, who were sometimes prevented from building a suitable home on their farmland, due to the very restrictive way in which the clauses about the ‘necessity for the purpose’ were construed.

Thankfully, from now on, extensions to existing constructions are now possible, as well as ‘annexes’ such as garages, swimming pools, garden sheds etc. which are detached from the main habitation.  Before starting a project you should check the local planning regulations (PLU or Plan Local d’Urbanisme) and since the change above is very new, it will remain to be seen with which degree of flexibility the administrative courts will apply the new rules.  However, this is overall very positive news.

How long will I have to wait to get planning permission?

The news is good, if you’re planning a new project. The planning application process has been limited to a maximum timeframe of four or five months (depending on the precise situation) for cases when building near listed buildings and where special consents are needed from the architect of the ‘Bâtiments de France’.

The timeframe for a standard planning application remains two months and the permission is deemed granted if not ruled upon within that timeframe.

It’s worth saying that an earlier law increased the period during which planning permissions remained valid, from two to three years (but the works must have started during the first two years). Extensions must be requested at least two months prior to the expiry.

What do I need to know about the changes to renting in France?

New provisions on rental level control have been issued.  Earlier legislation and statutory instruments have created the concept of a ‘tense zone’, which in practice concerns 28 cities in which accommodation is in high demand.  The purpose is to avoid an inflation of rent levels.  In such cities, unless a rent increase is justified by improvement works, or where the rent was manifestly undervalued on the previous rental, the new tenants’ rent must be at the same level as for the previous tenants.  Certain yardsticks of assessment are used based on the number of main rooms in the dwelling, the period of construction of the building, whether the premises are rented empty or furnished and the area in which it is situated.  (For this purpose Paris is divided into 80 areas.)  Where justified by certain features of additional comfort or geographical location, the landlord can increase the rent somewhat. 

In addition, since 1^st August 2015, there is a mandatory template of rental agreement which must be used.  This applies whatever the type of rental (unfurnished, furnished, etc.).  Certain information must be expressly mentioned, including the method of setting of the rent as well as the amount of rent paid by the previous owner. Trying to draft a lease agreement yourself would be a major error as it could very easily be void.

For furnished rentals, there is a model inventory list which must be annexed to the contract, comprising what is considered to be the bare minimum to enable the tenant to sleep, eat and live properly, and therefore for the contract to be treated as a furnished contract, as opposed to unfurnished.

However, since March 2014, furnished rentals are now additionally subject to certain provisions of the law of 6 July 1989, thus reducing the gap between this sort of rental and that of an unfurnished dwelling, making it more protective of the tenant.

Notice periods: In the tense zones referred to above, tenants benefit from a shortened notice period.  For furnished and unfurnished dwellings, this period is one month, without any requirement to give a particular motive, and three months outside tense zones. The landlord must give three months’ notice at least in all cases and can only do so in a limited number of circumstances.

Deposit: Upon the departure of the tenant, if there has been any damage the balance of the deposit must be returned to the tenant within two months after he has left the property. If there was no damage, it must be returned within one month.  This is whether or not the premises were unfurnished or furnished. 

Buying and selling

The cooling off period in which the buyer can pull out of the purchase and recover his deposit for any reason, is now 10 days long, an increase of 3 days on the previous 7.  Annexes to be added to the ‘compromis’ (that is the first contract representing what would be ‘exchange’in the UK), which the vendor must supply to the purchaser, can now be transmitted in electronic form, provided that the purchaser has specifically agreed to this. 

If you are buying an apartment, it’s useful to know that the vendor must supply copies of the minutes of the last three general meetings of the co-ownership; this is now mandatory whilst it was previously only recommended.

How do notaires calculate their fees for conveyancing?

The new law has reformed the rules about calculating these fees for notaires.  The tariff will need to take into account the service rendered and be ‘reasonable’ and it will need to be determined based on certain objective criteria.  It’s important to know that over a certain amount, the notaires will be able to offer a discount to their clients; currently the tariff of notaires for purchases and a number of other operations is set by law and cannot be changed. The new law hasn’t come into force yet; statutory instruments are expected soon and the rules will not change until those have been issued.

Code of Ethics:

Introduced by an earlier statute in September 2015 (named the Loi Allur) it’s worth you  knowing about a code of ethics for real estate professionals.  They have a duty of “conscience, dignity and loyalty, sincerity and honesty”, and must produce their professional card upon request.  They must have sufficient theoretical and practical knowledge for the purpose of carrying out their activities properly and must be up to date with regulatory changes.  Sanctions are provided in case of breach.

If you’re thinking of investing in a house in France, for so many reasons, it is imperative that you consult a lawyer qualified to advise you in the French legal system.

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