Compensation and Change of Use for Short-Term Rentals: Rules in Lyon and Paris
- edge
- Jan 20
- 3 min read
Short-term rentals are an increasingly popular activity in France, particularly in major cities like Paris and Lyon. However, this practice is governed by strict regulations to prevent abuses, notably concerning compensation and change of use. This article details these essential concepts and their implications in Paris and Lyon, with links to official sources for a better understanding of the legal framework.
What is a Change of Use?
In France, the law distinguishes between different types of uses for real estate: residential use, commercial use, or mixed use. To convert a property intended for residential use into a property for short-term rental, a change of use often needs to be requested.
Legal Definition
According to Article L.631-7 of the French Construction and Housing Code, “changing the use of a property designated for residential purposes requires prior authorization.” This regulation aims to protect the stock of residential housing, especially in high-demand areas like Paris and Lyon.
What is Compensation?
Compensation is a requirement imposed in certain municipalities to obtain authorization for a change of use. It involves converting a non-residential property into residential housing to offset the loss of housing caused by the short-term rental activity.
How Does Compensation Work?
In Paris, for example, for every square meter of housing converted into a property for commercial use, an equivalent (or even greater in some districts) amount of space must be compensated by creating housing in the same area. This system is governed by the Local Urban Plan (PLU).
The Situation in Paris
Legal Framework
Paris has the strictest regulations in France regarding short-term rentals. Authorizations for changes of use are highly regulated, and compensation is almost systematic in the central districts.
Obligations for Multi-Property Owners: Individuals can only offer short-term rentals if the property is their primary residence (maximum of 120 days per year). Beyond that, authorization for a change of use is required.
Cost of Compensation: The cost of compensation can reach tens of thousands of euros, depending on the property’s location.
Case Studies
Several case studies show that individuals who do not comply with these rules face fines of up to 50,000 euros per property. The city has increased its controls since 2019 to combat illegal practices.
The Situation in Lyon
Rules in Force
In Lyon, the rules are similar to those in Paris, although often perceived as less strict. Since Lyon is also in a high-demand area, a change of use requires authorization, with a compensation requirement in certain central neighborhoods.
Targeted Areas: Neighborhoods like Presqu'Île, Croix-Rousse, or Part-Dieu are particularly monitored.
Local Specificities: Lyon does not always impose strict equivalence compensation but encourages conversions to maintain a balance between housing and commercial properties.
Controls and Sanctions
As in Paris, penalties can be severe for offenders. However, Lyon still offers some flexibility in enforcing these rules, particularly for small operators.
How to Comply?
For property owners looking to start short-term rentals in Paris or Lyon, it is essential to follow these steps:
Check the PLU: Consult your city’s Local Urban Plan to understand the specific rules for your neighborhood.
Submit a Change of Use Application: This application is made at the city hall and may require professional assistance.
Plan for Compensation: If necessary, identify a property to convert into housing to meet your obligations.
Maintain Traceability: Keep all documents related to your compliance to avoid penalties.
Penalties for Non-Compliance
Property owners who fail to meet the change of use or compensation requirements risk:
Fines: Up to 50,000 euros per property concerned.
Injunction to Comply: Obligation to cease rental activities.
Increased Legal Risks: Tenants may also seek compensation.
The legal framework for short-term rentals is complex but essential for maintaining the balance of real estate markets in Paris and Lyon. Before starting, take the time to understand local rules and anticipate the costs associated with compensation. For more information, refer to the links provided in this article.
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