Capping of HLM Rents: A Decision that Protects Tenants from Perpignan to Collioure

Imagine: you are a tenant of an HLM apartment in Collioure, with a rent capped by a convention signed between the former owner and the State. One day, an HLM company buys the building and signs a new convention. Can it increase your rent beyond the initial cap? This is the question the Cour de cassation answered in a judgment of 22 October 2015 (No. 14-17.545).

For tenants, this is a safeguard: the landlord cannot use conventions to circumvent caps. For owners, it is a reminder to be cautious: previous conventions must be checked before setting rents.

This decision, although technical, has concrete consequences for thousands of tenants in the Pyrénées-Orientales, from Perpignan to Argelès-sur-Mer. Analysis.

Facts: an everyday story

Mr. X, a tenant of a social housing unit in Collioure, sees his rent increase after the building is bought by an HLM company. This company undertook in the acquisition deed to respect the convention signed by the former owner with the State. At the same time, it entered into a new convention with the State for the same building.

The problem? When setting the new rent, the HLM company applied the cap of the new convention, which was higher than that of the old one. Result: the revised rent exceeded the initial cap. Mr. X challenges this increase before the tribunal d'instance of Perpignan.

The tribunal rules in his favour: the landlord must respect the lower cap of the two conventions. The HLM company appeals, but the Montpellier Court of Appeal confirms. Why? Because the undertaking in the acquisition deed is contractual: the landlord cannot free itself from it by signing a new, more favourable convention.

The HLM company appeals to the Cour de cassation. But the Cour de cassation dismisses the appeal. It recalls that the capping mechanism of the initial convention applies, and the rent cannot exceed the maximum provided by either convention. In other words, the landlord must respect the cap that is most protective of the tenant.

The reasoning of the court — broken down

The Cour de cassation relies on Article 1134 of the Civil Code (old), which provides that legally formed agreements have the force of law for those who made them. In short, a contractual undertaking must be honoured. Here, the HLM company undertook in the acquisition deed to respect the initial convention. It cannot ignore this undertaking by invoking a new convention.

The reasoning is as follows: when the landlord sets the new rent applicable to current leases, it must apply the capping mechanism of the initial convention. This mechanism provides for a capped rent, revised annually according to an index (the IRL). The new convention may set a different cap, but the landlord cannot take the higher of the two to increase the rent. On the contrary, it must retain the lower cap, i.e., that of the initial convention.

What few people know is that this solution applies even if the new convention is more recent and signed by the same landlord. The Cour de cassation considers that the undertaking in the acquisition deed is an accessory contract to the sale, which prevails over the later convention if it is less favourable to the tenant.

The judges also specified that the reference rent for calculating the revised rent is the rent charged in the previous year, not the maximum rent. If the index falls, the rent must decrease. This is known as the downward revision mechanism, which applies even if the rent is below the cap.

What this means for you — practically

For HLM tenants: you are protected against abusive increases. If your landlord changes and signs a new convention, your rent cannot exceed the cap of the old convention. Example: in Argelès-sur-Mer, a tenant paid €400 per month under the old convention. The new convention sets a cap of €450. The landlord cannot increase the rent to €450; it must remain at €400, subject to revision within the limits of the old cap.

For social landlords and purchasers: be careful not to confuse the initial convention with the new convention. If you buy a conventioned building, check the terms of the current convention and comply with it as long as the leases are in force. Signing a new convention does not relieve you of the obligation to respect the old one for existing tenants.

For private owners letting on a conventioned basis: this decision also concerns you. If you buy a property subject to a convention, you must comply with it. undefined, I have come across cases where owners signed a new convention without checking the old one, and ended up in litigation for charging excessive rents.

If you are in this situation, you must compare the caps of the two conventions and apply the lower one. If in doubt, a lawyer lawyer can help you analyse the conventions and set rents in compliance.

Four tips to avoid this type of dispute

• Check prior conventions before acquiring a conventioned building. Ask the seller for a copy of the current convention and all riders. A notary or lawyer can assist you in this verification.
• Undertake in writing to respect the initial convention in the acquisition deed. If you plan to sign a new convention, specify that current leases remain governed by the old one until their renewal.
• Calculate the capped rent by taking the minimum between the old and new conventions. Use the reference index of rents (IRL) for the annual revision, starting from the base rent of the old convention.
• Inform tenants in writing of any change of convention and its impact on their rent. Transparent communication avoids misunderstandings and disputes.

Further reading: related case law and developments

This decision is part of a series of judgments of the Cour de cassation protecting HLM tenants. For example, in a judgment of 12 February 2014 (No. 12-29.754), the Court had already ruled that the landlord could not apply a rent higher than the conventional cap, even after a new convention. The 2015 decision confirms and clarifies this principle.

However, some courts of appeal had previously adopted divergent positions, considering that the new convention replaced the old one. The Cour de cassation put an end to this divergence by recalling the binding force of the undertaking in the acquisition deed.

For the future, social landlords must be vigilant: the trend is towards increased protection of tenants. Judges do not hesitate to penalise landlords who attempt to circumvent caps. Advice: before any increase, have your calculation validated by a professional.

In practice: what to do

Practical FAQ

1. My landlord signed a new convention and increased my rent above the initial cap. What should I do? – Challenge it in writing, referring to the judgment of 22 October 2015. Refer the matter to the conciliation commission, then to the judicial court if necessary.
2. I am a landlord and I acquired a conventioned building. Can I apply the new convention immediately? – No, as long as the current leases have not been renewed. You must respect the old convention for those leases.
3. What are the time limits to challenge an abusive increase? – You have 3 years from the first disputed increase to take legal action.
4. Can I claim a refund of overpayments? – Yes, if the rent exceeded the cap, you can claim the difference, with interest.
5. Does this decision apply to private conventioned dwellings? – Yes, the reasoning applies to any dwelling subject to a convention, whether HLM or private.

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