An important article was recently published in the French daily Le Monde (1) regarding the latest sentences given to tenants who had sublet their dwelling or part of it through Airbnb. This were the first precedents set over this important issue for people interested in a Buy-To-Let property in France.
On April 6th, the local court of the 5th arrondissement of Paris sentenced tenants of a duplex apartment with terrace overlooking Notre-Dame to pay their landlord a 5 000 € compensation for having sublet through Airbnb at the price of 700 € per week. It was the first case of a court ordering compensations for this motive. According to the landlord’s lawyer, the tenants had made a revenue of at least 22 000 € over three years.
In February 2014 a judicial decision was taken against tenants of a six room apartment who had sub leased two rooms permanently to “friends” for 300 € a month each, and a room to occasional travellers at 450 € a week. As the rent they actually paid amounted to 2500 € a month, the judge declared that« if the tenant is perfectly entitled to accommodate whoever he wants, he cannot however obtain a financial advantage from it». Thus tenants were sentenced to pay 2 000 € for the justice expenses. But termination of the lease was not agreed as «reproached facts were not of a sufficient importance». The judge added that the mild sentence was a reminder of the tenant’s obligation, notably to obtain an express consent of the owner for subleasing and at the price of the rent possibly broken down into the sub-rented areas.
Another case in January 14th implied the social housing agency Paris Habitat, now very vigilant on this type of wild subleases. Its tenants, M and Mrs G. had offered their five room flat on the site Airbnb under a promising ad saying “Lovely apartment near to the Seine ” to rent it during their holidays. They sublet it for 80 € per night or 2 000 € per month, while their rent did not exceed 400 € per month, net of social benefits. Paris Habitat obtained a court agreement for a 5000 € fine as well as the refunding of its expenses of justice. But judges did not grant compensation thinking that detriment was not established. And they did not pronounce the termination of the lease either.
Paris Habitat allegedly lodge about twenty complaints a year on these motives and have a dozen ongoing procedures while it manages about 125 000 accommodations.
Our comments : although these sentences seem to set a precedent in favour of landlords, French judges are obviously trying to find a balance between Law and the AirBnB social phenomenon. Traditionally justice’s decisions in France are favouring tenants. This principle seems unchanged by the recent sentences where fines and compensations did not amount to the revenues gained by the sub leasers. Subletting of a property still remains a juicy business despite increased judicial risks, and these sentences will probably not deter potential sub-leasers.
One important remark should be noted from the judge’s statement attached to the February 14 sentence. The judge reminded the interdiction for a tenant to obtain a financial advantage from sub-letting. This statement calls questions.The first is whether that interdiction will apply to sub lease agreed by landlords.
The second question is whether this will set a precedent, considering that the Airbnb businee is partly based on thousand of tenants adamant to make a benefice out of their temporary renunciation to their usual and paid accommodation. The incentives for this are probably much too high for the justice to resist it and to oppose in parallel the French State’s interests as tax collector. We think probable that in the future the law will focus on defending the landlord’s right to deny his agreement to subletting while letting tenants authorized by landlords to sublet take a revenue from the added value they create by offering the accommodation on the market.