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PROPERTY

Garant: How the French guarantor system works for property rental

If you're looking to rent an apartment in a larger city in France, you're likely to see announcements that require a 'garant'. Here is what you need to know about finding a guarantor in France.

Garant: How the French guarantor system works for property rental
Photo by Robert Linder on Unsplash

Renting in large cities in France – particularly in Paris – is a known challenge for foreigners, especially new arrivals. In the countryside, it’s a bit easier, with less competition properties, but in the big cities compiling your dossier and landing the right place can be a challenge.

One of the biggest surprises for many people is that most landlords ask for a guarantor (garant) in order to sign a lease for an apartment. It is not a legal requirement, but in competitive real estate markets, it certainly feels like one.

Though asking for a garant might feel a bit juvenile, it is quite common, and applies to a lot more people than you might realise. Here is what you need to know:

Who typically needs a guarantor?

The most common group to need guarantors are students. However, if you are a foreigner who is not employed with a CDI (indefinite contract) and if you do not make over three times your monthly rent, you will likely need a guarantor as well.

If you don’t collect your income in France (or if you don’t have an income) you will need a guarantor.

You will also likely need one if you are still in the probationary period of your CDI, or if you cannot show three months worth of pay stubs from your job yet (even if you pay meets the three times a month requirement). If you do have a CDI, you could ask your employer to sign you an attestation d’employeur which verifies your monthly income. 

If your income is not steady or consistent (perhaps you are a freelancer). Typically, if you use an agency during the leasing process, they will require a guarantor, especially if any of these conditions apply to you. 

It is worth noting that showing bank statements typically do not suffice – landlords are looking for proof of ongoing income, not savings.

Who can count as a guarantor?

The guarantor should be a third party, such as a parent or close relative who agrees to pay your rent if you fail to pay.

This person must fulfil all the requirements outlined above (ie earning more than three times your rent with an indefinite contract).

The other tricky part is that this person must work and live in France, and usually it’s best that they are French themselves.

However, this can pose a problem for foreigners who might not know anyone that fits that description, so thankfully there are some other options fill this requirement, like taking out a caution bancaire or using an online agency. We explained the ins-and-outs of these bellow.

What does my guarantor need to show?

The guarantor needs to put together a dossier of documents including;

  • Proof of identification (a passport or French ID card)
  • Proof of residence that is less than three months old (eg utility bills).
  • Most recent tax returns
  • Employment contract and typically three months worth of payslips
  • If they earn money via real estate, they must also provide documentation for this
  • If the person in question is retired, they must provide proof of pension (again, this must exceed your monthly rent threefold). 

So, what if I don’t have a French person who can be my guarantor? There are a few options for you:

Use an online service

There are two main online services that can act as guarantors for foreigners in France.

The first is Visale, which is accessible primarily to foreign students.

This is a programme offered via the French state through “Action Logement” and it covers up to three years of unpaid rent. You must be between 18 and 30 years old to apply, and you must hold a long-stay visa (VLS-TS) – either a student visa or a ‘talent’ one.

For students who are already citizens of a European Union country, then simply presenting a student card and a valid passport will be sufficient. It can be applied to private housing and student residences, but it is ultimately up to the landlord as to whether they will accept a tenant who uses Visale as their guarantor. The main benefit to Visale is that it is free for the user.

Visale does come with some restrictions, however. Your rent (including charges) cannot exceed €1,500 in Paris, and €1,300 in the rest of the country. In addition, the lease must be for a primary residence, and your rent should not exceed 50 percent of your total income.

Another option is GarantMe, a paid online website that can also serve as an official guarantor.

Landlords might actually prefer this service over a physical guarantor who might refuse to pay or for whatever reason not have the funds to do so. The benefit to GarantMe is that they accept a wider range of tenants for their service, but the downside is that there is a fee. The minimum payment (per year) is €150, but the fee is normally 3.5 percent of the annual rent (including charges) and it renews automatically.

The nice thing about GarantMe, is that in order to apply for the service, you basically need to create a full dossier that will be identical to what you’ll need for your apartment search anyways.

Take out a Caution Bancaire

Basically, a caution bancaire is a bank guarantee, and typically its a bit more of a last resort option because it is quite restrictive for the tenant. It involves blocking off a large sum of money to be used to pay rent if you fail to do so.

Depending on the landlord (and the bank), they might ask you to block between six months worth of rent to sometimes up to two years. This would be used as guarantee during the duration of your lease, but it takes a bit of administrative coordination and obviously requires a large sum of liquid funds.

Sometimes activating a bank guarantee can take a few weeks, and for foreigners, of course, this would require already having a French bank account. There can also be fees, depending on the bank, for using a caution bancaire, and simply closing of caution bancaire account in itself can involve fees.

The other downside to this is that not all landlords will accept it, which is why this option might be best served as a last resort.

Attempt to find an apartment that does not require a garant

This is quite difficult in Paris (and other large cities around France). It is possible sometimes if you stick to foreigner-oriented sites like NY Habitat or Paris Attitude. Another possible loophole could be to see if your insurance plan offers coverage of unpaid rent. This is quite uncommon, but could be a possible option. If you rent specifically particulier-à-particulier (meaning you do not use an agency at all) you might be able to negotiate with the landlord, or if you have a sub-lease you might not need to show proof of a guarantor.

Ultimately, however, in most cases when renting in France’s large cities, you’ll likely need a guarantor.

What should I be aware of when it comes to guarantor websites?

As mentioned previously, Visale is only for people in the 18-30 age group, so unfortunately it does not apply to everyone. It is also intended for lower income people or students, so if you are a high earner you might be rejected.

Regarding using a website like GarantMe, beware that they will charge you every year – it is not a one time fee. This will be deducted from the card you put on the site and the only way to cancel the charge will be to show proof that you have moved out (i.e. an état des lieux or letter releasing you from the obligation signed from your landlord)

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PROPERTY

Courtier: Should you hire a broker when buying property in France?

If you're researching the French property market, you might have come across mentions of 'courtiers' - here's what they do and whether they are necessary.

Courtier: Should you hire a broker when buying property in France?

The French ‘courtier‘ is usually translated as a broker, and the Notaires Association describes their role like this: “the broker is a true intermediary in banking operations. His/her role is to negotiate the best rates for you, but not only that: they will also find the most advantageous financing conditions for the realisation of your project.”

Essentially they act as an intermediary between you and the banks, so they’re only required if you need a mortgage or a loan in order to buy your French property. 

Their job is to research the best deals for you and then to help you put together your application and ensure that all your paperwork is correct – unlike the notaire, instructing a courtier is not a required part of the process, so the decision on whether to instruct one is up to you. 

So is it worth it?

Among French buyers, around 30 percent of mortgages are obtained using the services of a courtier, and this rises to 60 percent among young, first-time buyers, who generally find it harder to access credit.

Some of things to consider are your level of French and confidence in negotiating French bureaucracy, your financial situation (since French mortgage lenders tend to be stricter than those in the UK or US) and whether you currently live in France or not (since there are extra hoops to jump through for overseas buyers).

READ ALSO Is now a good time to buy a home in France?

“Things have changed,” Trevor Leggett, group president of Leggett International estate agents, told The Local. “It’s now more important than ever to work closely with a reputable broker.

“In France it is all paper-based, very old-school and extremely bureaucratic, a different world entirely to the UK. Preparing the client “dossier” so that it will be accepted is an art form.”

READ ALSO MAP: Where in France can you buy property for less than €100k?

He advised non-resident international clients, particularly, who may not be au fait with the French system to seek the help of a broker who knows the ropes.

“The question is no longer really about savings,” he said. “It is about finding a bank that can actually lend to the client profile, interests rate are secondary. 

“It occasionally happens that one bank can be played off against another, or to shop around, but it’s a rare event nowadays.”

READ ALSO Revealed: The ‘hidden’ extra costs when buying property in France

And he had no hesitation in recommending that prospective buyers find a broker to sort out the financing.

“The lending market has tightened for international buyers and a good one is worth their weight in gold,” he said.

READ ALSO EXPLAINED: Time-frame for buying and selling property in France

In France, you make an offer on a property and then you begin the mortgage process (while in the UK it’s the other way round) so problems in getting your mortgage approved could lead to you losing your dream property.

“[Using a courtier] can be the difference between buying and not,” added Trevor.

“It’s not just any possible language barrier – but understanding the process and the different players in the market.”

How much?

The cost of hiring a courtier is borne by the buyer – but how much do they charge?

The courtier usually charges a percentage of the total mortgage amount – fees must be fixed in advance and are only payable once your mortgage application has been approved. 

Fees vary between different areas and different businesses, but the average fee is €2,000, which amounts to around one percent of the purchase price.

Many brokers set a minimum amount – around €1,500 – for smaller loans, and take a percentage of larger loans, so how much you pay depends on your property budget. 

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