Legally, it is the landlord’s responsibility to carry out renovation and compliance work in the leased building. Under certain conditions, the law allows the tenant to carry out this work themselves. It is not uncommon to see tenants applying for a loan to enlarge the bathroom or renovate the fireplace of the house they have been renting for several years. Let’s see how this contractual relationship is realized in practice.
Tenant Lease Concept
The renovation lease is a modality of the main residence lease. It is a contract by which, in return for the tenant’s commitment to carry out certain work, the landlord grants them one or more advantages for a determined period (which can be more than 9 years):
- Either waive the right to terminate the lease;
- Or waive the right to request a rent review;
- Or grant a reduction or waiver of rent;
Nature of the Work
The work targeted by the legislator is of all types except those that by law are the tenant’s responsibility. Generally, this refers to renovation work, major repairs, and compliance work on the rented property.
This last scenario will therefore allow the tenant to temporarily live in a non-compliant building.
Formalities
A verbal agreement is insufficient. The law requires a written agreement between the parties, which can occur at any time during the current lease. It is therefore perfectly possible to modify a main residence lease into a renovation lease.
The contract must also stipulate that the tenant agrees to carry out specific work at their own expense in the rented property and set the deadline within which this work must be completed. In addition to its duration, the contract must mention the consideration provided by the landlord.
Regarding work to bring the rented property into compliance with basic safety, health, and habitability requirements, the law imposes additional conditions.
Namely, that this work is described precisely, that the start of the work is set within a reasonable time, and that no rent is due during the agreed period for this work, it being understood that this period cannot be less than what is reasonably necessary to complete it.
Furthermore, the landlord must grant at least one additional commitment from those mentioned above, namely to refrain from terminating the lease most of the time.
Finally, at the request of the most diligent party, a joint inspection of the work will be carried out upon completion. In this way, the owner can ensure that the agreed work has been correctly completed.
Recommendations
Although the formula is attractive for both parties, namely a significant added value for the seller against free occupation for the buyer, caution is still advised.
First of all, do not neglect to take out insurance for work of such magnitude because only your liability could be engaged if necessary.
As it is a lease, the landlord can terminate it at any time, with a 3-month notice, for personal occupation, for example. Therefore, make sure to include a clause that provides for the reimbursement of the cost of the work if the lease is terminated within a period concurrent with the completion of the work.
Conversely, if you leave the premises and the work is not completed, you may be liable to compensate the owner for the value of the unfinished work.