This article is provided for general information only and does not constitute legal, tax or investment advice. Rules change and individual situations differ. Always confirm the current position with a qualified professional before acting.
You own a two-room flat in a French city and you’ve let it to the same couple since 2021. They pay on the first of the month, they fixed the dripping tap themselves and they’ve never once rung you in London. Your agent tells you the flat would now let for €150 a month more. Do you raise the rent, and can you?
The American personal finance writer behind Financial Samurai asked a version of this question this week, about San Francisco tenants who suddenly strike it rich. His answer rests on a schedule of rents he writes into his leases and chooses to honour, even when the market runs ahead of it. It’s a good question. In France, the law answers most of it before you do, and the maths of keeping a good tenant comes out differently depending on where the flat is.
Sources: law of 6 July 1989, articles 17-1 and 17-2, and decree n° 2017-1198 as extended to 31 July 2027 by decree n° 2026-644 of 20 July 2026.
Why a rent schedule doesn’t travel to France
In a French lease of someone’s main home, the rent can only move along routes the 1989 law sets out. The everyday one is the annual revision. It only exists if the lease has a revision clause, it happens once a year, and the increase can’t exceed the change in the indice de référence des loyers (IRL), the official rent index. If you forget, you have a year to claim it. The revised rent then runs from the date you ask, so a late claim can’t be backdated (article 17-1 of the 1989 law).
The second route is an increase for improvement works you pay for, agreed in an express clause of the lease or a signed amendment. The third is a re-evaluation when the lease renews, covered below. A schedule of fixed rises written into the lease can’t take the rent above those limits, however clearly the tenant agreed to it. On a home rated F or G for energy, nothing moves at all. Our guide to raising the rent takes each route in detail, and our IRL update gives a recent index.
Two kinds of letting work differently. In a commercial lease, a stepped rent fixed at signature is lawful, as we explained when the courts struck down a fixed annual increase clause in September. Holiday lets sit outside these rent rules altogether, so their prices can follow the season. Our comparison of short and long lets weighs that freedom against the work it brings.
The schedule France writes for you: renewal
An unfurnished lease lasts at least three years when the landlord is an individual or a family SCI, and six years when it’s a company, including an ordinary SCI. At the end, it renews automatically and the rent only follows the IRL. You can propose a higher rent for the renewed lease only if the current one is manifestement sous-évalué, clearly below what comparable homes nearby let for. The rules are in article 17-2 of the 1989 law, and the timetable is strict:
- Gather references for comparable homes nearby: at least three, or six in a commune that’s part of an urban area of over a million people. They must include leases signed more than three years ago as well as recent ones.
- Make sure your proposal reaches the tenant at least six months before the lease ends, by recorded letter with proof of receipt, through a commissaire de justice or by hand against a signature. It must reproduce section I of article 17-2 word for word and list your references, or it’s void.
- The tenant has until four months before the end of the lease to accept in writing. Silence counts as a refusal.
- If the tenant refuses, either side refers the dispute to the commission départementale de conciliation, which has two months to give its opinion.
- If there’s still no agreement, the court must be seized before the lease ends. Otherwise the lease renews at the old rent, revised by the IRL.
While that proposal is on the table, you can’t also give the tenant notice to leave at the end of the same lease. Our guide to the conciliation commission explains what happens at step four.
Example for a lease ending on 30 June 2027. Deadlines run from the day the tenant receives the proposal. Source: article 17-2 of the law of 6 July 1989. Chart: theenglishinvestor.com
How much you can add depends on where the flat is. In a zone tendue, a tight-market area listed by decree, the increase can’t exceed half the gap between your rent and the local references. If you’ve done improvement works costing at least a year’s rent since the lease began or was last renewed, the limit is 15% of their cost a year if that’s higher. Elsewhere, the new rent is set by the local references, without the half-gap limit. Paris, Lille, Lyon and Villeurbanne, Montpellier, Bordeaux, Plaine Commune, Est Ensemble, the Pays basque and part of Grenoble-Alpes Métropole also apply rent ceilings, as our report on Paris rent control shows.
Then comes the schedule itself. For an unfurnished lease, the increase arrives in yearly thirds over a three-year lease, or sixths over a six-year one. If it’s more than 10% and the renewed lease runs for less than six years, it’s spread in sixths over this lease and the next. The annual IRL revision then applies to each step. For a furnished lease, the increase applies when the lease renews, but in yearly thirds if it’s above 10%.
Objet : proposition de renouvellement du bail avec réévaluation du loyer
Madame, Monsieur,
Le bail du logement situé [adresse], que vous occupez depuis le [date], arrive à son terme le [date]. Le loyer actuel étant manifestement sous-évalué par rapport aux loyers habituellement constatés dans le voisinage pour des logements comparables, je vous propose le renouvellement de ce bail moyennant un loyer mensuel hors charges de [montant] euros, conformément à l’article 17-2 de la loi n° 89-462 du 6 juillet 1989.
Vous trouverez ci-après la liste des [trois / six] références ayant servi à déterminer ce montant, puis le texte intégral du I de l’article 17-2, reproduit conformément à la loi.
[Références] [Texte intégral du I de l’article 17-2]
Je vous remercie de me faire connaître votre réponse au plus tard quatre mois avant le terme du bail.
Veuillez agréer, Madame, Monsieur, l’expression de mes salutations distinguées.
In English: the lease ends on [date], the current rent is clearly below comparable local rents, so I propose renewing it at [amount] a month excluding charges under article 17-2. My references and the full text of section I of article 17-2 follow. Please reply at least four months before the lease ends.
When the tenant leaves: the new rent is capped too
In San Francisco, a departing tenant lets the landlord reset to market. In a French zone tendue, it often doesn’t. Under decree n° 2017-1198, extended to 31 July 2027 by a decree of 20 July 2026, a new tenant’s rent can’t exceed the last rent paid by the previous one. It can be revised by the IRL only if it wasn’t revised in the previous twelve months. The rule covers furnished lets and mobility leases as well as unfurnished ones, as the national housing information agency’s analysis confirms.
There are exceptions. A clearly undervalued rent can rise by up to half the gap with local references. Improvement works costing at least half a year’s rent allow an increase of up to 15% of their cost a year. The rent is free for a first letting, for a home empty for more than 18 months, or after improvement works worth at least a year’s rent done in the last six months. Outside tight-market zones, you set the new rent freely. On a home rated F or G, it can’t exceed the previous tenant’s rent.
One more rule decides the whole question. You can’t end a lease simply to re-let at a higher rent. Notice at the end of the lease is only valid to sell the home, to take it back for yourself or a close family member, or for a legitimate and serious reason such as a tenant’s failure to meet their obligations. The family members who qualify are listed in article 15: your spouse, your registered partner or a partner of at least a year, and your or their parents, grandparents, children and grandchildren. So the real choice is between raising the rent through the routes above and waiting until a good tenant leaves of their own accord.
| Moment | Tight-market zone (zone tendue) | Elsewhere |
|---|---|---|
| Every year during the lease | IRL revision, if the lease has the clause | IRL revision, if the lease has the clause |
| Renewal, rent clearly undervalued | Up to half the gap, or 15% a year of large works, phased in | Up to local references, phased in |
| New tenant | Capped at the previous rent, with the same exceptions | Free |
| Home rated F or G | No increase of any kind | No increase of any kind |
Worked example: what the gap really costs
A reader under the Financial Samurai post suggested a neat way to size the problem: turn the yearly shortfall into months of empty flat. Our assumptions are an unfurnished 50 m² flat rated D, let at €800 a month by an individual landlord, comparable flats nearby at €950 and a three-year lease coming up for renewal. The gap is €150 a month, or €1,800 a year, which is 2.25 months of rent. We count the extra rent over the next three years, before the IRL revisions that apply in every case.
In a tight-market zone, the renewal route allows €75 a month, half the gap. That’s 9.4% of the rent, so it arrives in thirds: €25, then €50, then €75 a month, or €1,800 over three years. If the tenant leaves instead, a new tenant can be charged the same €875 straight away. Allow one empty month (€800) and letting fees of €656, assuming the agency charges you what the law lets it charge the tenant: €10.09 and €3.03 per m² in 2026. The new tenant brings in €2,625 over the period, or €1,169 net, which is €631 less than keeping the tenant you have.
Outside tight-market zones, the sums turn round. The renewal route can claim the full €150, but at 18.75% of the rent it arrives in sixths, so it still brings in €1,800 over three years. A new tenant pays €950 from the start. After one empty month and €555 of fees at the lower €8.07 rate, that’s €3,895 net, or €2,095 more. Since you can’t push a good tenant out, that figure tells you what to do when they leave of their own accord: reset to the market then.
| Extra rent over three years | Tight-market zone | Elsewhere |
|---|---|---|
| Keep the tenant, renewal increase | €1,800 | €1,800 |
| New tenant, after one empty month and fees | €1,169 | €3,895 |
| Difference | Keeping the tenant wins by €631 | A new tenant wins by €2,095 |
| Break-even cost of a change of tenant | €825 | €3,450 |
The last line is the useful rule of thumb. In a tight-market zone, a change of tenant only pays if the empty months and fees together cost less than €825, which one month’s rent already exceeds. Elsewhere, it pays unless they cost more than €3,450, roughly four months of the old rent. The example leaves out the costs that are hardest to price: a worse tenant, wear on the flat and your own time. Each of them favours the tenant you already have. If an empty spell runs past a year in a tight-market area, the vacant homes tax can follow, as our guide to how the tax office decides a home is empty explains.
A tenant’s windfall changes nothing
Financial Samurai’s sharpest point is about fairness. If a tenant’s bad luck doesn’t lower the rent, their good luck shouldn’t raise it. French law reaches the same place by another road. None of the routes above looks at the tenant’s income, inheritance or share options. The rent follows the index, the local market and the works you’ve paid for. A landlord who wants to help a tenant through a hard patch can always agree a lower rent in writing.
For an owner abroad, the case for keeping a good tenant is stronger still. Every change of tenant means an exit inventory, a deposit to settle, a new file to check and a flat that sits empty while you’re a plane ride away. Sending a renewal proposal from abroad has its own trap, because the six months run from the day the tenant receives it. A commissaire de justice in France, instructed by email, removes any doubt about the date.
Before you chase the market rent
Check the rating first. On a home rated F or G, no increase is possible, so energy works come before any rent discussion.
Claim the IRL revision every year. It’s the only increase that needs no justification, and a late claim can’t be backdated.
In a tight-market zone, keep a good tenant. A new tenant’s rent is capped at the old one, so turnover rarely pays.
Elsewhere, reset when a good tenant leaves. Use the renewal route if the gap is large, and start gathering references a year ahead.
Mark the deadline. A renewal proposal that reaches the tenant less than six months before the end of the lease is too late.
Our view
The French system takes the moral dilemma away from the landlord and replaces it with a timetable. That’s fairer to tenants than a market that can push a rent up by a quarter in a boom year. It also leaves a landlord in a tight-market zone with little reason ever to let a good tenant go, and a landlord elsewhere with every reason to wait for one to leave. Rules that make reletting unrewarding in the cities where homes are scarcest may well keep some of them off the long-let market, and that cost doesn’t appear in anyone’s rent.
Readers, has a French tenant of yours stayed on at a rent well below the market, and did you try the renewal route or leave it? If you let in a tight-market zone, has the cap on a new tenant’s rent changed how you treat the one you have? Would you ever write a schedule of rents into a French lease, knowing it can’t go beyond the index?
FAQ: below-market rent in France
Can I write a schedule of rent increases into a French residential lease?
Not one that takes the rent beyond the legal routes. During a main-home lease, the rent can only rise through the annual revision capped by the IRL, an increase agreed for improvement works, or a re-evaluation at renewal. Stepped rents fixed at signature are a feature of commercial leases.
Can I raise an undervalued rent when the lease renews?
Yes, if the rent is clearly below comparable local rents and the home isn’t rated F or G. Your proposal, with local references and the text of article 17-2, must reach the tenant at least six months before the lease ends. In a tight-market zone the increase is limited to half the gap, and it’s phased in over the following years.
Can I charge a new tenant more than the old one?
Outside tight-market zones, yes, unless the home is rated F or G. In a tight-market zone, the new rent is capped at the previous tenant’s rent for leases signed until 31 July 2027, with exceptions for clearly undervalued rents, improvement works, first lettings and homes empty for more than 18 months.
Can I end a lease to re-let at a higher rent?
No. Notice at the end of a lease is only valid to sell, to take the home back for yourself or a close family member listed in article 15 of the 1989 law, or for a legitimate and serious reason such as a tenant’s failure to meet their obligations.
