Ceret Property

Information for Owners

What is a long-term let?
We are using the phrase ‘long-term let' here to mean any let extending to one month or more. This distinguishes this type of let from standard holiday rentals normally lasting one, two or three weeks.

What is the market for long-term lets?
The market for long lets in France is healthy and growing year on year. Most of these lets are for periods of up to six months, with 2 to 3 months arguably being the most popular, though there has also been an increase in the requirement for rentals of up to a year. House hunters make up the majority of people looking to rent for a longer period and many like to check out different areas and so can stay in several properties. The demand also comes from people taking sabbaticals and retirees etc. These lets are generally off-season as the cost of renting for a month or more in the summer can be prohibitive.

The dramatic increase in the last few years of people from the UK looking to purchase property in France, has helped fuel the demand for long lets*. ‘Rent before you buy' really does make sense if you can afford the time. Conversely, it has also helped in the supply of properties available for long lets. As more and more foreign buyers purchase property in France with the intention of running a gîte or two, the competition has increased in the standard holiday rental market. These more difficult conditions are encouraging many owners to advertise their properties for long winter lets as a means of maximising their earning potential. Most property owners naturally prefer the higher revenues potentially available during summer, but many now welcome extra off-season income with the bonus that their property is being occupied and heated. There are also fewer overheads for the owner, with a long term let, as there are no change overs and the tenant usually pays for the utilities.

* Oddly enough, in 2009 with the downturn of the sales market in France, there has been an increase in potential buyers entering the long term rental market, as they wait for the markets to change.

Is my property suitable for a long-term let?
As stated above, the bulk of long-lets are winter lets. It is therefore essential that your property is adequately heated and has suitable bedding with winter duvets if necessary. Remember one person's idea of a mild day or night is not necessarily the next person's. Even the south of France can experience extremely cold weather. Make your tenant aware of the temperatures he is likely to expect.

If your property has stone or wood floors perhaps some rugs would be an idea. Is there suitable lighting for reading during those longer evenings? 

It is obviously preferable that the prospective tenant visits the property first to ensure it will meet his/her needs, and this also gives you the opportunity to assess whether the tenant is suitable. This is particularly important for longer lets of a year or so.

Internet has become an essential to long term lets, as tenants like to stay in touch with family and friends. There are a selection of packages available at present. Orange who now run France Telecom can provide all your needs.

What price can I charge per month?
Whatever the market can stand in your location - it is not an exact science. For shorter term rentals, 2-3 months then you can generally charge per month, the same price you would charge for your most expensive summer wee. Longer lets may warrant a slightly higher discount. There is generally room for a little negotiation with the tenant, particularly with longer lets. If you own a property with a pool, then you need to take into account that the pool may not be available in the winter months and you will need to price appropriately.

Some owners set a higher price and are content to receive fewer but more lucrative bookings, others set a more competitive one preferring to have their property occupied more often. Stating your price as being ‘ From X per month' can be worthwhile in that it offers you flexibility while advertising your most attractive price. For city properties it may be best to check the classified ads in local papers (‘Les Petites Annonces') to gauge the rental prices that properties command in your area.

How do I charge for utilities and extras?
A decision needs to be made on how to charge for services such as electricity, gas, telephone, water etc. The simplest solution is to charge the tenant at cost for all the services and other additional expenses such as logs, linen etc, with the water perhaps being included in the monthly rental price. If you do not have the ability to read your utilities, then you may want to think about an "all in" price.

Utilities usage can be monitored and billed proportionally using appropriate measuring devices, including Gas Meters, Water Meters, Oil Meters and Heat Energy meters.
For further info please see www.bellflowsystems.co.uk (Bell Flow Systems Ltd is a UK based manufacturer and distributor of fluid transfer equipment, flow meters and flow measurement solutions.)

It needs to be clearly stated at the outset what is included in the price of the rental and what is chargeable as an extra. It is better to put in writing e.g. by e-mail, the costs per unit of electricity, litre of oil, how much the logs cost, price for gas cylinders and unit costs for telephone.

Also let the tenant know if he is to be liable for standing charges such as the telephone. If the tenant is appraised of these costs before entering into an agreement, there will be little room for confusion or misunderstandings when it comes to paying the bills.

For longer lets of a year or so it may be prudent to transfer all the utility bills into the tenant's name; this could also include the local residential tax (‘taxe d'habitation'). Real estate tax (‘taxe foncière') is payable by the owner of the property.

The visitor's tax (‘taxe de séjour') is set at a local level by town councils (conseil municipal) and can vary from between a few Centimes to over one Euro per person per night depending on your locality and time of year. Check with your local Mairie to see if or when this tax applies in your commune and the amount payable. If the amount is negligible it may be better to include this in the monthly rental.

How to receive payment?
At the end of the day, it is up to you to decide how you receive payment. It is worth taking into account that most tenants from the UK will not have a euros bank account, so will need to pay in stirling. As a guide, you should take at least 1 months rent as a deposit to secure the booking. Monthly payments can then be made in advance. It would also be prudent to take a security deposit in the for of a cheque. This can be returned to the tenant during the month after the end of the tenancy and once you have been able to check your property. What currency do you want paid in? Euros or Sterling? Are you happy to receive a cheque or cash, or do you take credit cards? Make all this clear from the outset.

 

The practicalities.
Take a reading of all utilities and agree these with the tenant on day one. If you have oil central heating it may be necessary to mark your tank, again in the presence of the tenant. These can then all be checked on the last day, or the end of each month, and the total calculated. The telephone charges will appear on your itemised bill, so an element of trust would be required as one bill is likely to arrive after the tenants departure. Alternatively, it is possible to check your current call usage online with France Télécom. Otherwise a larger deposit could help or limit your telephone to local calls only.

Signing up to an unlimited access agreement, dial up or broadband if available, with an ISP such as Wanadoo or Tiscali can keep a lid on Internet access charges. This cost can then be passed on to the tenant in full.

Always ensure your kitchen and bathroom have some basic essentials for the tenant's arrival, e.g. rubbish bags, matches, toilet rolls, cleaning materials and staples such as sugar, salt & pepper etc.

Leases.
There is an important distinction made in France between renting furnished as opposed to unfurnished accommodation.  Unfurnished lets can afford the tenant greater protection and the lease would normally be for a minimum of three years. Here a standard contract applies - ‘Contrat de Location Non-Meublé'.

We will, however, concern ourselves here with furnished lets only, as these make up the properties that we market in the main and that our clients are looking to rent.

French law has changed for some furnished leases. Previously, there was no legal requirement to use a lease for a furnished rental and it was possible to agree any duration. As from January 20th 2005, except for holiday lets, a contract of at least one year is legally required if renting furnished property to a tenant who owns no other property or has no other tenancy agreement as his main residence. If the tenant has other accommodation as his main residence then there is still no legal requirement for a lease and a lease, if used, can be of any duration. The parties are free to agree their own terms and contracts can vary. The problem lies where the tenant is effectively of no fixed abode, perhaps when the tenant has sold his home in the UK or elsewhere, and the French rental property will be his main residence for a time.

This new law raises the following issues:
1) If a one-year lease is legally required, how do you amend its duration so both tenant and owner are happy signing it?
Many furnished rentals are for periods of considerably less than one year and rentals of several months are common. In these cases both owner and tenant are unlikely to feel happy signing a one-year lease. It is true the tenant can end the rental by giving one month's notice, but many will still feel uncomfortable signing a one-year lease for perhaps a four-month rental. To help resolve this, you can organise for the tenant to give notice in writing at the same time as they sign the contract. By signing a notice to quit at the outset for a given date, say four months from date of entry, the one-year lease is effectively transformed into a four month lease. Both tenant and owner know where they stand, and the owner is then free to take on further lets after the notice period ends.

From our experience it would seem that, where there is no legal requirement, most owners do not use leases for lets of a month or two. Given that the prospective tenant has his main residence elsewhere, the decision of whether to use a lease or not is entirely dependent on the owner's attitude, type of property (full of valuable antiques or modestly furnished) and length of tenancy. It is, however, advisable to use a lease, especially for longer lets and if the utilities and local taxes are to be transferred into the tenant's name.

A contract for renting furnished property in France should be accompanied by an ‘Etat des Lieux', detailing the type of property, its location and furnishings etc. In addition an inventory should be attached and signed on exchange of keys. This need not go into enormous detail covering every last toothpick, but concern itself with items of value.

Your local Immobilier or Notaire should be able to draw up lease agreements for a charge, or blank forms can be found and then completed and signed by both parties. You can find some sample forms at 1 Yrs + Lease Contracts , 1-6 Months Contract , 6 - 12 Months Contract

Tax on rental income.
Letting furnished accommodation in France is governed by civil law from a legal standpoint, but for tax purposes it is regarded as a commercial enterprise. Therefore all rental income should be declared to the French tax authorities. Professional advice should be sought as to what expenses are deductible.

References.
It is preferable to ask a prospective tenant for references from his bank or employer etc.

Information for the tenant.
A comprehensive folder in the property containing information on the area, local markets, eating houses etc is, as with standard holiday rentals, obviously good to have available but bear in mind that people taking on long lets may probably have different objectives as well as being there off-season. Ideally, a folder for long lets could include details of short language courses nearby, property search agents, Immobiliers that speak English etc.

Always ensure that a contact number for emergencies and general queries is left with the tenant for everyone's peace of mind.

Beware of Scams.
Please exercise caution when responding to enquiries. Some things to watch out for are inaccurate dates and details of your property, too much emphasis placed on the financial side, extremely poor use of English and requests for personal information.

Please be aware of the following scam, the 'Nigerian Money Transfer Fraud', that is being targeted at some property owners.

“ATTENTION ALL LANDLORDS.
There is a scam going on. It works like this.
SUMMARY:

Via email some one wants to lease your home sight unseen and to send you cashier checks for a years rent and deposit. The cashier checks are FAKE. They are for more money than owed and on the day you receive them, they want a REFUND of the supposed overpayment wired to their bank. In other words, THEY GIVE YOU FAKE CASHIERS CHECKS AND WANT YOU TO WIRE TRANSFER YOUR GOOD MONEY TO THEM. By the time your deposit comes back, they have disappeared with your good money.”