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10 December 2024
The Le Meur law makes significant changes to the regime for changing the use of residential premises in France. However, this reform seems like a missed opportunity to clarify the regime, for which the stakes go far beyond furnished tourist rentals, as it also affects tertiary real estate, service residences and other forms of co-living. On the contrary, it enhances the complexity of the system and increases the sources of legal uncertainty.
French Law No. 2024-1039 of 19 November 2024, known as the Le Meur Law, is intended to strengthen the control of the short-term rental of furnished premises for tourism, which has greatly increased in recent years with the growth of the offering on online platforms. This practice, which can be an additional source of income for owners or tenants, also poses problems with regard to preserving the pool of accommodation for use as housing.
To better govern the activity of holiday rentals, the Le Meur Law attempts to act essentially though the lever of legislation on the change of use of residential premises, as provided for by Section L. 631-7 of the French Construction and Housing Code; it being recalled that any breach of this legislation can give rise to particularly severe penalties: a civil fine of up to €100,000 for each premises that is unlawfully transformed (€50,000 before the Le Meur Law) and the possibility for purchasers and tenants to invoke the nullity of their deeds of sale or leases.
The Le Meur Law brings an end to the automatic application of legislation on changes of use in municipalities with more than 200,000 residents and in the Hauts-de-Seine, Seine-Saint-Denis and Val-de-Marne départements. Now, like other municipalities in high demand areas, which are subject to a tax on vacant housing, these municipalities must deliberate to decide whether to make changes of use of residential premises subject to authorisation. The stated aim is to increase the territorial scope of application of this provision to allow municipalities who so wish, regardless of their size, to regulate holiday rentals in their area.
However, one might query the value of modifying the previous regime, which, under Section L. 631-9 of the French Construction and Housing Code, already offered these municipalities a system for controlling the change of use.
One might also bemoan the lack of a register indicating which municipalities have decided to impose the provision. This position will be particularly problematic when carrying out audits of cases, as it will be necessary to systematically verify if the municipality is subject to the regime or otherwise, without having a reliable source.
The Le Meur Law also introduces a new criterion for assessing the use of residential premises, which may have an impact on the obligation to apply for a change of use or, where applicable, the classification of an offence. This is the notion of a "premises that is lived in or that has been intended for that use at any point over the thirty years preceding the application for authorisation".
The purpose of this criterion is to take into account the actual position of a premises, which may have undergone successive changes of use, without declaration or authorisation. This makes it possible to protect premises that were assigned to use as housing at any time over the last thirty years by making them subject to the procedure for a change of use, particularly for holiday rental.
However, it is not clear how this criterion operates with regard to that of the classification of the use of premises between 1 January 1970 and 31 December 1976, the other reference period taken into account by law. For example, if a premises were assigned to a use other than housing between 1 January 1970 and 31 December 1976, but it was used as housing during the last thirty years, should it be considered as being used as housing? A literal reading of the legislation would appear to say that it should. However, it could be argued that the criterion of the "last thirty years" was added to enlarge the territorial scope of application of the system to cover municipalities in which the land use alteration sheets were not kept and that were unable to provide proof of the use in the 1970s, and that it is therefore a subsidiary criterion.
More seriously, the Le Meur Law calls into question the legal force of town planning authorisation for a change of purpose. This is the procedure provided for by the French Town Planning Code, which makes the change of purpose of a premises subject to a formality (prior declaration or building permit depending on the nature of the works).
This means of proof was introduced by a law on 13 July 2006 to secure the rights of owners acting in good faith who obtained a building permit authorising them to remove the purpose of "housing" for all or part of their properties. In doing so, the legislator admitted that these premises could be considered as already having a use other than as housing, even if they had never been subject to an authorisation for change of use, by disregarding here the principle of the independence of acts of legislation. Indeed, in such a case, the change of the activity in the premises was brought to the authority's attention and authorised.
Whereas, the Le Meur Law introduces to this section a paragraph according to which "a town planning authorisation for a change of purpose only constitutes a valid means of proof if it is accompanied by an authorisation for a change of use". This provision completely challenges the "legalising" effect that the legislator intended to grant to building permits, whilst for some time the legal doctrine has sought to reconcile the policy of use with that of purpose to secure the rights of owners and users acting in good faith.
Therefore, an owner that had transformed a residential premises into a commercial premises by means of a building permit or prior declaration, but who had not applied for authorisation for a change of use, could not lease the premises for furnished tourist rental or under a commercial lease without the risk of a penalty. Here, we can see how the attempt to regulate short term rentals has a considerable impact on the whole real estate sector - which seems to have escaped the legislator's attention.
The Le Meur Law also creates a confusion between the notions of purpose and use. It is generally considered that the notion of purpose (under the French Town Planning Code) refers to the reason for which a premises was built whereas the use (under the French Construction and Housing Code) refers to its actual use.
Whereas, the Le Meur Law adds to Section L. 631-7 of the French Construction and Housing Code a provision according to which "the use as housing covers any premises that is lived in or that is intended to be lived in, even if it is not actually occupied": which means that from this point any premises not assigned to housing, but that is intended to be, shall be considered as being used as housing.
This provision muddles the boundary between the two notions, as it assimilates use and purpose. Indeed, a premises may be intended to be lived in without this actually being the case, and the inclusion of such a provision may challenge the perfectly lawful use of a premises for professional purposes simply as the premises has the features of housing.
The Le Meur Law also introduces the possibility for Local Town Planning Schemes (PLU) to define sectors in which any new housing constructions must be for the exclusive use as a main residence, which amounts to making the notion of use part of town planning as the fact of occupying housing as a main residence relates to its actual use, and not the reason for which it was built. This measure also poses a problem of consistency with the regime of the change of use, as the classification of use as housing does not only apply to main residences.
More broadly, it constitutes an attack on the right of property - which covers the freedom of use of the property - that should be validated by the Constitutional Council, although it was not directly asked to rule on the issue before the promulgation of the legislation.
Section L. 631-7-1 A of the Le Meur Law takes a step in the right direction by making it possible to issue temporary authorisations for a change of use to legal entities, which was previously strictly limited to natural persons.
This means it will be possible to obtain authorisation for a change of use to be able to carry out a short-term rental without requiring compensation (which consists of transforming a premises with a different use into housing), for a limited and renewable duration.
Temporary authorisation also has the benefit of being neutral in terms of the regime of purposes in terms of town planning law.
We understand that the extension of the benefit of temporary authorisations to legal entities is implicitly aimed at operators of service residences, as the new drafting indicates that the quotas of temporary authorisations that municipalities can implement does not apply to them.
This measure is a positive sign, as it recognises the legitimacy for the operators of service residences to occasionally offer holiday rentals, in addition to their main business of long-term leasing. We may however bemoan the fact that residential accommodation managed by a service provider that offers services is included surreptitiously in the provisions for quotas, whilst the operators hoped for real progress in this area, and the legislation is restricted to service residences of Section L. 631-13 of the French Construction and Housing Code.
The operators of residences with services in the broadest sense, whether they are university residences under Section L. 631-12 of the French Construction and Housing Code, service residences under Section L. 631-13 of said code or even student residences or other forms of co-living under sui generis regimes all have the same preoccupation: renting rooms for short stays on an occasional and ancillary bases, in order to cover a vacancy in housing that cannot find tenants for a medium- or long-term occupation, without calling into question their role as leasing a main residence.
This possibility has already been provided for since 2022 for university residences as Section L. 631-12-1 of the French Construction and Housing Code provides for the possibility of offering premises that are unoccupied on 31 December for short- or medium-term rental terminating no later than 1 October of the following year. We can deduct from this provision that it dispenses with the need for a change of use, but it would have been expedient for the Le Meur Law to clarify this point.
We can clearly see that the operators of all residences managed with services, regardless of their legal status, face difficulties regarding particularly the classification of their activity, which can be assimilated to holiday rental that is subject to a change of use, or hotel accommodation, which is subject to declaration at the town hall. There is no specific legal regime for these intermediate forms of accommodation that, without claiming to be tourist residences, need some flexibility in the duration of the rental they offer, in order to ensure an optimal level of occupation. It would have been preferable for the Le Meur Law to address this issue, which affects a rapidly expanding sector, and for it to offer a clear and secure legal framework for these operators.
By being too intent on protecting the residential role of a premises, by creating rigid categories or properties despite the changes to life styles, the law hinders the development of new forms of accommodation. The housing policy worksite therefore remains open, and must now cover encouraging the supply as much as protecting occupants.
