by Home Conseil Relocation, TIRA member, France
Finding an accommodation in France is not easy, especially in Paris and its suburb with an extremely tense real estate.
Employees under a trial period face the issue all the more so if the owner has decided to subscribe to a ”GLI – Garantie de Loyers Impayés” (an insurance on unpaid rent).
In France and especially in Paris, more and more landlords/lessors opt for this insurance. For a monthly fee equal to 3% to 6% of the monthly rent, the GLI protects property owners against the risk of unpaid or overdue rent. Many real estate agencies negotiate group rates and resell this insurance to their own customers, which make them the main decision-maker.
To measure the risk of unpaid/overdue rent, strict criteria are defined and they are not negotiable. Among those, the future tenant should have a net salary of 3 times the amount of the rent (including rental charges) and be under a confirmed permanent contract.
Consequently, any employee under a trial period is not a suitable candidate and files of applicants under a trial period are automatically rejected.
This leads to a high number of inaccessible properties to foreign or newly hired employees and although we screen the properties that will be presented to you, the presence of a GLI is not always advertised or even known by the person putting the property on the market.
When no GLI is subscribed to on a property, the following options can facilitate the situation:
The physical guarantor: To counterbalance the trial period a physical guarantor is the go-to solution. The guarantor must be based in France and have French income corresponding to a minimum of 3 times the rent concerned. Therefore, it is often difficult for a foreign employee to have a physical guarantor.
The bank guarantee: A bank guarantee (equivalent to 3 months up to 1 year worth of rents, depending on the lessors/landlords’ instructions) is another solution. This option is quite expensive because it leads to a high amount of money frozen on a bank account as well as additional banking fees and account maintenance fees to be paid by the tenant.
The Visale guarantee: The Garantie Visale is a free of charge governmental service that offers to be the guarantor when renters have no French physical guarantor. This guarantee is subject to conditional access. Unfortunately, few agencies and landlords agree to use this guarantee so far as it is still quite novel.
The inverted GLI: Very recently, private insurance brokers created the GLI inverse or inverted GLI. The tenant pays between 3 and 6% per month of his rent to a private insurance company, which guarantees the loss of rent for the owner. This option is quite expensive for the tenant and is not well known nor widely accepted by the lessors as it is quite new as well.
This article was originally published here.
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Based in Lyon, France’s second largest city in terms of economic vibrancy, Home Conseil Relocation serves the relocation needs of businesses throughout France and especially in Paris, with a team of qualified consultants.
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