You are the owner of a leased property governed by Law No. 89-462 of July 6, 1989. You would like to be able to increase the rent, but you don’t know how to do it. What are the different reasons for a rent increase? How can you revise a rent that has never been revised? What is the deadline for notifying the tenant? An update on these questions.
Capital Video: When to notify the tenant of a rent increase?
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– Notify the tenant of the rent review
What are the different reasons for a rent review?
Annual revaluation based on the rent review index
There are two situations in which the rent amount may be increased.
The first, the most common, is that of the annual increase in rent. It occurs when the signed lease contract contains an annual review clause. The review is done through indexation based on an index: the rent review index. The date on which this index is taken into account is generally specified in the lease. Failing this, it will be necessary to take as a reference the latest index published by INSEE at the time of signing the lease contract. Under these conditions, the rent review can be done every year. But the lessor must still request it.
Good to know : since August 24, 2022, the law prohibits the rent review of housing classified F or G (classification indicated on the energy performance diagnosis) during the lease.
Improvement works carried out during the lease in the rental accommodation
Second case, where the owner carries out improvement work in the accommodation for the benefit of the tenant. In this situation, the amount of the rent increase must be agreed by the lessor and the tenant either in the initial rental agreement or in an amendment.
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Can the landlord increase the rent without warning?
As previously stated, the rent review is governed by law. Also, the owner cannot increase the rent without notice. In the context of the “annual” increase, Article 17-1 of Law No. 89-462 of July 6, 1989 provides that the lessor “expresses” his desire to review the rent within one year following its effective date. Therefore, he must write to his tenant to inform him before any increase on the due date notices.
As part of the review following improvement work, the lessor and tenant agree on the rent increase: there are therefore no surprises.
How to revise a rent that has never been revised?
The rent review can only take place within one year of the date of the request. In other words, a rent cannot be revised retroactively. If the request for an increase has not been made, the unapplied review is lost for the owner: his action is said to be time-barred (article 7-1 of law n°89-462 of July 6, 1989).
Good to know : in the event of rent not indexed for the past, it remains possible to proceed with future indexations, over the years.
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How much can you increase rent annually?
As part of the annual review, the rent review index published by INSEE governs the procedure. The amount of the increase is determined based on a calculation made using this index. The amount therefore changes each year. The indexation and calculation rules are as follows, taking into account three elements:
- Current rent amount
- Quarterly rental reference index (provided for in the lease or published by INSEE)
- Benchmark index for the same quarter last year.
Here is the calculation formula:
New rent = current rent X new IRL of the reference quarter of the Lease / IRL of the same quarter of the previous year.
When and how to inform the tenant of the rent review?
The landlord is required to inform the tenant of any rent increase by registered letter with acknowledgment of receipt or by bailiff’s act. The letter must contain:
- the detailed calculation,
- the new amount,
- the effective date.
This notification must reach the tenant at least one month before the annual review stipulated in the rental agreement. If this deadline is not met, the owner must wait until the following year to carry out a review. When the rent increase is planned for the renewal of the lease, the owner must alert the tenant at least six months before the end of the current lease and request their consent to apply this increase.
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What should a rent increase letter contain for a tenant?
The rent increase letter intended for a tenant must include the following elements:
- Declared intention of the lessor to carry out the annual review of the rent (reference article 17-1 of law n°89-462 of July 6, 1989)
- Reference indices used for the revision
- Calculation of the increase with the amount of the new indexed rent
For obvious reasons of proof, it is preferable to send the rent increase letter by registered letter with acknowledgment of receipt.
Rent Review Letter Template
(Lessor’s First and Last Name)
(Full address)
(Phone number)
(E-mail address)
(Name and Surname of the Tenant)
(Full address of the rented accommodation)
Place, Date
Registered letter with acknowledgment of receipt
Subject: Notification of annual rent increase
Madam, Sir,
As the owner of the accommodation located at (full address of the accommodation), which you occupy under the lease signed on (lease start date), I hereby inform you of my intention to carry out an annual review of the rent, in accordance with the review clause included in our contract and the provisions of Article 17-1 of Law No. 89-462 of July 6, 1989.
This revision is justified by the annual adjustment based on the rental reference index (IRL) published by INSEE. According to the terms of our lease, the revision can be applied on the date of signing the contract, i.e. (date of signing the lease).
The rental reference index used is that of (specify the quarter and year, e.g. first quarter 2024), which amounts to (IRL value). The index used on the date of signing your lease or during the last revision was (value of the previous IRL). Consequently, the calculation of the increase in your rent is as follows:
Old rent: (current rent amount) €
New IRL: (new IRL)
Former IRL: (former IRL)
New rent: (Old rent x new IRL) / Old IRL = (calculation result) €
The amount of your monthly rent will therefore be (new rent amount) € from (effective date of the new pricing).
Please note that this notification is being sent to you more than one month before the date of application of the revision, thus respecting the required legal notice period. We thank you for taking all necessary steps to adjust your rental payments from this date.
If you have any questions or need clarification, please do not hesitate to contact me.
Please accept, Madam, Sir, the expression of my distinguished greetings.
(Signature of the Lessor)
(Name of Landlord)
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Can the tenant refuse the rent increase?
Unless there is a calculation error – or the accommodation is classified as F or G according to the DPE – the tenant cannot refuse the rent increase. In the event of a supposed error, the tenant must write to his landlord or the agency representing him by registered letter with acknowledgment of receipt in order to contest the increase.
In the event of persistent disagreement, it will be possible to initiate conciliation (via the departmental conciliation commission or a justice conciliator). In the event of failure, the tenant must refer the matter to the judge of protection disputes within a period of one year from the date of the rent review.
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