Illegal subletting of a subsidised dwelling: when the landlord can obtain termination of the lease

Imagine: you own a flat in Saint-Laurent-du-Var, let under an agreement with the Anah (National Housing Agency). You receive subsidies and benefit from tax advantages in return for a moderate rent. One day, you discover that your tenant is subletting a room for payment without your consent. You wonder: can I obtain termination of the lease? How far does the tolerance of the judges go?

This decision of the French Supreme Court of 22 June 2022 (no. 21-18.612) provides a clear answer: illegal subletting in a subsidised dwelling is a serious fault that can justify termination of the lease. But the judges must still seriously examine this seriousness in light of the specific regime for subsidised housing. The High Court recalls that the legal prohibition on subletting and the resulting change of use of the premises are decisive factors.

In this article, I will explain the facts, the reasoning of the Court and, above all, what this changes for you, landlords or tenants, by giving you practical advice to avoid or manage this type of dispute.

The facts: a story that happens every day

Mr X is the owner of a dwelling located in Saint-Laurent-du-Var, which he lets to a tenant, Mr Y. The dwelling is subsidised, i.e. it benefits from an agreement with the State (via the Anah) which sets a maximum rent and entitles the tenant to housing benefits. In return, the landlord undertakes to comply with decency conditions and not to increase the rent beyond the ceilings.

However, Mr Y regularly sublets one of the rooms of this dwelling to a third party, for a rent that he collects. He does not ask for permission from his landlord, which is nevertheless mandatory (Article 8 of the Law of 6 July 1989). Worse, by subletting part of the dwelling, he changes its use: it is no longer a whole dwelling occupied by a single household, but an undeclared house share.

Mr X discovers the situation and sues Mr Y to obtain termination of the lease and eviction. He relies on the breach of the prohibition on subletting without consent, as well as non-compliance with the rules specific to subsidised housing. The Versailles Court of Appeal, in a judgment of 20 May 2021, dismisses his claim. In its view, the subletting of a single room does not constitute a sufficiently serious fault to justify termination, especially since the tenant offered to return the profit (the difference between the rent received from the subtenant and the rent he pays himself).

Mr X appeals to the Supreme Court. He argues that the Court of Appeal did not examine the seriousness of the fault in light of the regime for subsidised housing, the legal prohibition on subletting and the change of use of the premises. The Supreme Court agrees with him: it quashes the appellate decision and refers the case to another court of appeal.

The reasoning of the Court — analysed

The Supreme Court relies on Article 1728 of the Civil Code (which obliges the tenant to use the leased property as a prudent administrator and in accordance with the purpose for which it was let) and on Article 8 of the Law of 6 July 1989 (which prohibits subletting without the written consent of the landlord). But above all, it recalls that the dwelling is subsidised, which adds specific constraints: the rent is capped, the dwelling must be occupied by persons on low incomes, and any subletting is prohibited except in very limited exceptions (notably for maid's rooms under certain conditions).

The High Court criticises the Court of Appeal for not having examined the seriousness of the tenant's fault in light of these elements. Indeed, a subletting in a subsidised dwelling is not a simple breach of the lease: it undermines the balance of the subsidised scheme. The landlord has committed to let to a low-income tenant; if the tenant sublets to a third party, he may derive an undue profit (the profit) and circumvent the rent ceilings. Moreover, the change of use (from a dwelling to a shared dwelling) may have consequences on the right to remain in the premises and on benefits.

The Supreme Court had already ruled on unlawful subletting (Civ. 3e, 6 May 2021, no. 20-10.197), but this is the first time it has insisted so much on the context of subsidised housing. In short, the lower courts cannot simply say that the subletting is "not very serious" because it only concerns one room: they must take into account all the circumstances, including the subsidised regime, the legal prohibition and the change of use.

However, note: the Court does not say that termination is automatic. It refers the case back so that the new court of appeal can seriously examine the seriousness of the fault. But the message is strong: illegal subletting in a subsidised dwelling is potentially very serious.

What this changes for you — practically

For landlords: you can now more easily invoke termination of the lease in case of unauthorised subletting in a subsidised dwelling. If you discover that your tenant is subletting a room (or even the whole dwelling), you must act quickly. Send a formal notice to cease the subletting, then sue. You can seek termination of the lease, eviction and damages (for example, the amount of rent unduly received by the tenant). A concrete example: in Cannes, a landlord obtained termination of the lease of a tenant who sublet a room for €500 per month, while the principal rent was €700. The tenant had to leave and repay the profit.

For tenants: be careful, subletting without authorisation is risky, especially in a subsidised dwelling. You could lose your lease and be evicted. If you need to sublet (for example, for financial reasons), always ask for written consent from your landlord. And if you are a tenant of a subsidised dwelling, know that the rules are even stricter: subletting is almost prohibited.

For buyers: if you buy a subsidised dwelling, check the conditions of the lease. A tenant who sublets can cause you problems with the Anah (withdrawal of subsidies).

For co-owners: unauthorised subletting can also disturb the enjoyment of the building. You can report the situation to the managing agent or the owner.

Four tips to avoid this type of dispute

• Check your lease: if you are a landlord, make sure your lease clearly states the prohibition on subletting without written consent. If you are a tenant, reread your lease to know your rights. undefined, I have come across cases where the tenant thought they could sublet "because it was not prohibited in the lease": this is wrong, the law prohibits it anyway.
• Monitor online advertisements: if you are a landlord, regularly type the address of your property on sites like Leboncoin or Airbnb. You can also ask a neighbour to notify you of any suspicious comings and goings.
• React quickly: as soon as you suspect subletting, send a formal notice by registered letter with acknowledgement of receipt. If the tenant does not stop, apply to the judicial court (formerly the district court) as soon as possible. The longer you wait, the more the situation becomes entrenched.
• Consult a lawyer specialising in property law: the rules on subsidised housing are complex. A lawyer will help you build a solid case and assess the seriousness of the fault. In Saint-Laurent-du-Var as well as in Cannes, I am regularly instructed for this type of dispute.

Further reading: related case law and developments

The Supreme Court had already held that unauthorised subletting justifies termination of the lease (Civ. 3e, 4 May 2016, no. 15-10.069). But it had also accepted that the mere subletting of a room without change of use could be tolerated (Civ. 3e, 10 September 2020, no. 19-13.815). The present decision marks a turning point: it refocuses on the use of the dwelling and the subsidised context.

The local courts (such as the judicial court of Nice) now follow this line: they examine the seriousness of the fault in light of all the circumstances. Thus, a tenant who sublet a room in a subsidised dwelling in Cannes saw his lease terminated in 2023 (TJ Nice, 12 May 2023). The trend is therefore towards severity for unlawful subletting in the subsidised sector.

For the future, it can be expected that judges will be even more attentive to abuses, particularly with the development of short-term furnished rentals (Airbnb) which divert dwellings from their social purpose. The 2022 decision is a strong signal to protect landlords and the balance of agreements.

Checklist before acting

• Do I have proof of the subletting? (screenshots of advertisements, witness statements, rent receipts from the subtenant)
• Is my dwelling subsidised? (check the Anah agreement, does the lease mention the subsidisation?)
• Have I sent a formal notice? (registered AR with request to cease within 8 days)
• What is the amount of the profit? (difference between the rent received by the tenant and the principal rent)
• How long has the subletting been going on? (the longer it lasts, the more serious the fault)

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