Law of 3 June 1979: Rent Cap in 1979 for Leases Signed in 1978

Imagine: you are the owner of a flat in Le Barcarès, rented since 1978. In 1979, a new law on rents comes into force. You wonder what rent to apply. This is exactly the question the Court of Cassation decided in 1983. This decision, although old, remains a model for understanding how to articulate successive laws on rents. What does it say? That the 1979 rent cannot be freely set, but must respect a cap calculated on the basis of the rent authorised in 1977. A question that may seem technical, but has very concrete consequences for your wallet.

In short, if you signed a lease in 1978, the revision of the rent in 1979 had to take account of a cap. But what cap is it? The answer is in the judgment we are about to dissect. Do not worry, I will explain it all simply, without jargon, with examples from everyday life in Perpignan or Collioure.

So, concretely, does this decision still concern you today? Yes, because it illustrates a principle still in force: respect for legal caps during rent revisions. But also because it reminds landlords that contractual clauses are not always sovereign when faced with the law. Let's dive into the facts.

The facts: a story like many others

Mr. Dupont, owner of a building in Le Barcarès, rents a flat to Mrs. Martin since 1 January 1978. The lease provides for a rent of 500 francs per month, with an annual revision clause based on the construction cost index. But then: in 1979, the government passes a law (Law of 3 June 1979) that caps rents for existing leases. Mr. Dupont thinks he can apply his revision clause to the initial rent of 500 francs, which would bring the rent to 550 francs. But Mrs. Martin contests: according to her, the base rent to be revised is not the contractual rent, but the rent authorised by an earlier law (Law of 29 December 1977), which set a lower cap, say 480 francs. The revision on 480 francs would give 528 francs, a lower rent.

The dispute arises: which rent should serve as the basis for the revision? Mr. Dupont takes the matter to the tribunal d'instance of Perpignan, which rules in his favour. Mrs. Martin appeals. The Court of Appeal of Montpellier reverses the judgment: it holds that the reference rent is that resulting from the application of Article 3 of the 1977 Law, i.e. a capped rent. Mr. Dupont appeals to the Court of Cassation. The Court of Cassation, in its judgment of 25 May 1983, dismisses the appeal: it confirms that the rent due in 1979 cannot be higher than that calculated by applying the contractual revision clause to the rent resulting from the application of the 1977 Law. In other words, the 1979 Law requires the 1977 cap to be taken as the basis for revision.

The reasoning of the court — explained

The Court of Cassation relies on paragraph 8 of Article 1 of the Law of 3 June 1979. This text, somewhat obscure, provides that for lettings taking effect in 1978, the rent due in 1979 cannot be higher than that calculated by applying the contractual revision clause to the rent resulting from the application of Article 3 of the Law of 29 December 1977. Translation: the 1977 Law had set a maximum rent for leases concluded after its entry into force. The 1979 Law caps rent increases. But which base rent should be used to calculate the increase? The rent actually paid in 1978 (here 500 francs) or the rent capped by the 1977 Law (480 francs)? The Court answers: it is the rent capped by the 1977 Law that serves as the reference. In clear terms, the landlord cannot revise a rent that was already too high compared to the law. In doing so, the Court gives a strict interpretation of the 1979 Law, aimed at protecting tenants against excessive increases.

The judges reject the landlord's argument that the contractual revision clause should apply to the rent stipulated in the lease. They consider that the 1979 Law intended to limit the effect of revision clauses by making them apply not to the contractual rent, but to the authorised rent. This is an important decision because it shows that the law can override the contract, even in rent matters. What few people know is that this decision was made in a context of high inflation: the legislature wanted to prevent rents from spiralling. The Court of Cassation therefore played a regulatory role.

What this means for you — concretely

For a landlord in Le Barcarès: if you signed a lease in 1978, you cannot revise the rent in 1979 on the basis of the initial rent if it exceeded the 1977 legal cap. Today, the principle remains applicable during revisions: the base rent must comply with the regulations in force at the time of signing. For example, if you rent a studio in Collioure since 2020, and in 2021 a law caps rents, the revision must be based on the capped rent, not on a freely agreed rent.

For a tenant: you can challenge a rent increase if it is calculated on a base rent that does not comply with the law. Keep your receipts and the applicable texts. If you are a tenant in Perpignan and your landlord applies a revision on an initial rent that is too high, you can ask for a refund of overpayments.

For a property professional: when drafting leases, ensure that the initial rent respects legal caps. A revision clause cannot validate an illegal rent. undefined, I have come across cases where landlords applied revisions on non-compliant base rents, leading to costly litigation. Better to prevent.

Four tips to avoid this type of dispute

• Check the legality of the initial rent: before signing a lease, ensure the rent respects applicable caps (Law of 1948, Law of 1989, etc.). An excessive rent can be reduced later.
• Use an official reference index: for revisions, the rent reference index (IRL) has been mandatory since 2008. Do not use a non-compliant contractual index.
• Respect successive laws: in periods of rent control, the most recent law may impose caps. Seek advice from a lawyer or the ADIL.
• Keep all documents: receipts, contracts, correspondence. In case of dispute, you must prove the amount of the base rent and its method of calculation.

Further reading: related case law and developments

This 1983 decision is part of a series of judgments on the application of the 1977 and 1979 laws. For example, the Court of Cassation later held that the base rent for revision should be the rent actually due, unless the law provides otherwise (Civ. 3e, 12 July 1984, No. 83-10.123). The tendency of the courts is to protect the tenant against abusive increases, especially in times of housing crisis. Today, with rent control in certain areas (like Perpignan), this principle remains relevant: revision clauses cannot circumvent legal caps. For the future, case law may evolve towards more flexibility for landlords, but for now, caution is advised.

In practice: what to do

Here is a 5-point checklist if you are a landlord and wish to revise a rent:

1. Identify the base rent: is it compliant with the law in force at the time of signing?
2. Check if a legal cap exists (e.g., Law of 1989, rent control).
3. Apply the reference index (IRL) to this base rent, not to a higher rent.
4. Inform the tenant in writing with the detailed calculation.
5. Keep a copy of the revision notice and the tenant's response.

If you are a tenant and doubt the calculation, ask the landlord for supporting documents. In case of refusal, refer the matter to the departmental conciliation commission or the judicial court.

In a similar situation? A 30-minute initial consultation with Maître Zakine (€45) can save you months of proceedings — and often much more. Book an appointment →