The Climate and Resilience Act and real estate

The Climate and Resilience Act, Law No. 2021-1104 ‘to combat climate change and strengthen resilience to its effects’, was finally promulgated on 24 August 2021. The aim of this law is to achieve carbon neutrality by 2025.

This law has a significant impact on the property sector, which accounts for over 40% of the country's overall energy consumption and over 25% of greenhouse gas emissions. It therefore naturally includes the property sector, particularly in terms of the ecological transition, energy consumption and the adaptation of buildings to climate change.

Here are the main aspects of this law for the property sector:

1. Energy performance of buildings

This is measured in particular by means of the Energy Performance Diagnostic (DPE), which is compulsory for all transactions and which must be brought to the attention of future buyers or tenants. Homes are assigned a class based on their primary energy consumption and greenhouse gas emissions. Homes are graded from A to G, with A being given to homes that produce more energy than they consume, and F and G being given to homes known as ‘thermal flats’.

The law imposes measures to reduce the energy consumption of homes:

FOR RENTALS:

A ban on letting ‘heatwasters’: homes rated F and G (in the Energy Performance Diagnostic - DPE) will gradually be banned from letting:

• From 2025: A ban on letting G-rated properties.

• From 2028: It will be forbidden to rent F-rated properties.

• From 2034: A ban on renting E-rated properties.

Rent freeze for energy-guzzling homes: From 2022, landlords of F- or G-rated homes will no longer be able to increase their rents.

FOR THE SALE

In addition to the DPE, the climate law requires homeowners to carry out an energy audit before selling their home, for the most energy-intensive properties. This obligation only applies to owners of detached houses or blocks of flats. Owners of co-owned properties are not affected.

The energy audit is valid for five years, compared with ten years for the DPE.

The energy audit identifies exactly where improvements can be made to reduce energy consumption. The report proposes a number of renovation solutions, together with an estimate of the theoretical costs involved and the financial assistance available to the homeowner. Are you a homeowner? It's up to you to start the process even before your property is put up for sale, so that you can hand over the energy audit to the potential buyer on the first visit and, at the latest, on the day the promise to sell is signed.

The obligation to carry out an energy audit when selling your home comes into force from :

• 1 April 2023, for houses or buildings with several F or G-rated dwellings where you are the sole owner.

• 1 January 2025 for E-class homes.

• 1 January 2034 for D-class homes.

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2. Renovation and condominiums

Condominiums are also subject to energy improvement obligations for common areas:

Several measures are required:

• A collective DPE must be carried out for all homes and buildings constructed before January 2013. This must be renewed every 10 years.

• Setting up multi-year renovation plans, to be renewed every 10 years, to anticipate necessary renovations. This plan includes a list of the thermal renovation work required to improve the residence's carbon footprint and make energy savings. It also provides an estimate of the cost of renovation work in the co-ownership, the energy savings to be made and a timetable for carrying out the essential work to be undertaken within the next 10 years.

• The renovation fund is now compulsory for all co-ownerships, including the smallest (fewer than 10 lots). This fund will be used to finance all work that is essential to safeguard the building, as well as the energy renovation work set out in the TPP.

• Co-ownerships over 15 years old will be required to carry out an overall technical assessment.

3. Energy performance diagnosis (DPE)

• The DPE is now enforceable, which means that information about a property's energy performance can be used as evidence in a dispute.

• The overhaul of the DPE makes the results more precise and uniform.

  
  

4. Regulation of risk areas

The law introduces measures to reduce the artificialization of land and protect against natural hazards:

• Limiting construction in areas exposed to climatic risks (floods, fires, etc.).

• Promoting the desartificialisation and renaturation of land in development projects.

To conclude, the Climate and Resilience Act imposes a major transition on the property sector, with the clear aim of reducing the carbon footprint of buildings. It implies investments for property owners, but also offers opportunities to access financial aid for renovations.

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