Complete Rental Property Management: Landlord's Guide

Introduction

Rental property management represents a set of legal, tax and administrative obligations that every landlord must master to secure their property investment. From lease drafting, rent collection, security deposit management and annual charges reconciliation, the steps are numerous and governed by dense legislation: the law of 6 July 1989, the ALUR law of 2014, the ELAN law of 2018, not to mention the provisions of the Civil Code. This guide is aimed at both the small landlord holding one to three properties and the experienced investor or professional manager. It covers the essential points of compliant, profitable and sustainable rental management, with an emphasis on best practices and pitfalls to avoid.

1. Lease drafting and signature

The rental agreement is the cornerstone of the landlord-tenant relationship. Since the ALUR law of 24 March 2014 and its implementing decree of 29 May 2015, residential leases must comply with a mandatory standard form for unfurnished lettings (principal residence) and furnished lettings. It must notably mention the identity of the parties, a precise description of the property, the habitable floor area (Boutin law), the amount of rent, the duration (3 years for an unfurnished lease, 1 year for furnished), and the terms of any increase.

Several mandatory annexes must accompany the lease: technical diagnostic file (EPC, lead exposure risk assessment, natural and technological risk assessment), notice of information on the rights and duties of the parties, and building regulations where applicable. Since July 2021, an EPC rated F or G limits rent increase options, and since 2023, properties rated G+ are prohibited from letting.

In tight markets (28 agglomerations defined by decree), rent controls apply, particularly in Paris, Lille, Lyon, Montpellier and Bordeaux. The landlord must respect a maximum reference rent or face administrative sanctions.

2. Rent management and annual increases

Regular rent collection is the heart of rental profitability. The landlord must issue a receipt free of charge at each request from the tenant (article 21 of the 1989 law). Rent increases can only occur once per year, on the date agreed in the lease, based on the Rental Reference Index (IRL) published quarterly by INSEE.

Since the law of 16 August 2022 on purchasing power, the IRL increase is capped at 3.5% for properties rated A to E, and frozen for energy-inefficient properties (F and G). In case of unpaid rent, the landlord has several options: formal notice, activation of the termination clause, bailiff demand for payment, and application to the judge of the protection division. Rental default insurance (GLI) or the Visale public guarantee scheme can secure income.

3. Security deposit and property condition report

The security deposit is strictly regulated: it cannot exceed one month's rent excluding charges for an unfurnished lease, and two months for furnished. It must be returned within one month after handing over the keys if the exit condition report is satisfactory, or two months in case of damage. Beyond that, penalties of 10% of monthly rent per month of delay apply.

The entry and exit condition reports, drawn up jointly, are essential for justifying any deductions. It is advisable to supplement these with dated photographs and a detailed inventory for furnished lettings.

4. Charges reconciliation

The landlord may request monthly provisions for recoverable charges (decree n°87-713 of 26 August 1987) including water, collective heating, common area maintenance and waste disposal tax. Mandatory annual reconciliation must be carried out on supporting documents, communicated to the tenant one month beforehand. In the absence of reconciliation within three years, the landlord forfeits the right to claim back payments.