In furnished rentals in France, recoverable service charges are expenses initially paid by the landlord that can legally be passed on to the tenant, in accordance with the exhaustive list established by Decree No. 87-713 of August 26, 1987. These recoverable charges include cold and hot water, communal heating, electricity in shared areas, maintenance of common areas, certain routine maintenance costs and household waste collection tax. Conversely, property tax, major repairs, property management fees, improvement works and non-recoverable condominium charges remain the landlord's responsibility. Two methods of charging tenants are available for furnished rentals: a fixed monthly service charge, which is easy to manage and does not require annual adjustments, and monthly advance payments followed by annual reconciliation based on actual expenses. Fixed charges are mandatory for mobility leases (bail mobilité). The choice between these two methods depends on the property, the stability of expenses, the type of rental agreement and the landlord's management strategy. Service charges should be calculated using reliable information, including condominium statements, invoices and historical consumption data, to maintain transparency with tenants and protect rental profitability.
When renting out a furnished property in France, recoverable service charges are an important consideration when determining the rent and the total amount payable by the tenant. Water consumption, cleaning of common areas, household waste collection tax, communal heating... Some expenses can be passed on to tenants, while others must remain the landlord's responsibility. It is therefore essential to distinguish between recoverable and non-recoverable charges.
Another important consideration is that furnished rentals allow two different methods for charging service costs. Landlords can either apply a fixed monthly amount or collect advance payments followed by an annual adjustment. Both methods are permitted under French law, but they have different implications for property management, transparency for tenants and rental profitability. In practice, the most suitable option depends on the type of property, condominium arrangements, length of occupancy and rental management strategy, whether you operate as an LMNP (non-professional furnished rental landlord) or an LMP (professional furnished rental landlord).
In this article, we explain which expenses can be passed on to tenants, how to calculate recoverable charges and which payment method to choose for your furnished rental property.
Recoverable service charges are expenses initially paid by the landlord and subsequently charged to the tenant because they relate to the normal use of the property, certain building services or routine maintenance. Their exhaustive list is strictly regulated by Decree No. 87-713 of August 26, 1987. In other words, if an expense is not included in this list, it generally cannot be charged to the tenant.
This rule also applies to furnished rentals. However, the payment method differs from unfurnished rentals, as furnished tenancy agreements allow landlords to choose between advance payments with annual reconciliation and a fixed service charge specified in the contract. For mobility leases (bail mobilité), service charges must be calculated as a fixed amount. To learn more about drafting rental agreements, read our article on the essential clauses to include in a furnished rental contract.
In practice, recoverable rental charges fall into three main categories.
Certain expenses associated with the everyday use of the property or shared building facilities can be charged to tenants. These include:
Recoverable charges also include several routine maintenance and operating expenses, such as:
Landlords may also recover certain taxes and service fees, particularly the household waste collection tax (taxe d'enlèvement des ordures ménagères or TEOM), which may appear on condominium statements or property tax notices. However, the property tax itself (taxe foncière) is not a recoverable expense.
Understanding this distinction is essential to avoid billing errors and disagreements with tenants. Some expenses cannot be passed on to tenants, even when they directly concern the rented property.
The following expenses generally remain the landlord's responsibility:
In summary, tenants are responsible for expenses related to everyday use and routine maintenance, while landlords must cover costs associated with preserving the property, major works and property investment. To better understand this division of responsibilities, you can also read our article about landlords' rights and obligations under French law.
For furnished rentals, landlords can choose between two methods of collecting service charges.
A fixed service charge consists of setting a predetermined monthly amount when the rental agreement is signed. This amount is paid alongside the rent. It is a simple, transparent and practical solution that eliminates the need for a detailed annual expense statement, as no subsequent adjustment is required. This payment method is also mandatory for mobility leases.
Its main advantage is administrative simplicity. However, it also involves a certain risk: if the amount is underestimated, the landlord must cover the difference. Conversely, if it is overestimated, the rental offer may become less attractive or raise questions from potential tenants.
Fixed service charges are particularly suitable for certain types of rental agreements, especially mobility leases, where this method is mandatory. To better understand how this type of contract works, read our dedicated article about mobility leases for furnished rentals.
This method involves collecting a monthly advance payment based on actual expenses or an estimate. An annual reconciliation then compares the amounts paid by the tenant with the actual recoverable expenses incurred. If the tenant has overpaid, the landlord must refund the difference. If the amount collected is insufficient, the landlord may request an additional payment.
This method is often more accurate when service charges fluctuate significantly from one year to another, for example in large condominium buildings, properties with communal heating or accommodation where water consumption varies depending on occupancy.
There is no universal solution. The best choice depends primarily on the characteristics of the property and how you manage the rental.
Fixed service charges are often suitable for:
Advance payments based on actual expenses are generally better suited to:
For LMNP or LMP investors, the decision involves both financial and practical considerations. Setting fixed charges too low can reduce profitability, while setting them too high may make the property harder to rent. Conversely, collecting advance payments requires more administrative monitoring and documentation but helps prevent long-term discrepancies between payments and actual expenses. For further advice, read our article on how to optimize the profitability of a rental investment.
The amount charged must reflect the actual characteristics and expenses of the property. To determine an appropriate figure, it is advisable to rely on reliable information, including:
When using the actual expenses method, you can estimate a monthly amount by dividing the total annual recoverable expenses by 12. When applying fixed charges, it is important to establish a realistic amount without excessive increases. The objective is not to conceal additional rent but to cover reasonable and foreseeable expenses.
Even for furnished rentals, maintaining accurate records is essential. When service charges are adjusted annually, tenants may request supporting documentation. Landlords must therefore be able to provide a detailed breakdown of expenses and the documents used to calculate them. The breakdown must be communicated to the tenant one month before the annual reconciliation, and supporting documents must remain available for inspection during the legally required period.
It is therefore advisable to keep:
More generally, maintaining organized records simplifies property management and helps establish a transparent relationship with tenants. For further information, read our article on the documents landlords must provide when renting out a property.
Yes, in some cases. Reducing service charges can make your rental offer more attractive and lower the tenant's overall housing costs without necessarily reducing your profitability.
Several strategies can help:
In some buildings, discussing expenses with the condominium property manager or carefully reviewing the annual statement can help identify non-recoverable costs that may have been incorrectly allocated to tenants.
In furnished rentals, recoverable service charges correspond to a specific list of expenses that landlords are legally allowed to pass on to tenants. These charges can be collected either as a fixed monthly amount or through advance payments followed by annual reconciliation, except for mobility leases, where fixed charges are mandatory. The most appropriate system depends on the property, the stability of operating costs, the landlord's management approach and their rental investment strategy.
The key is to remain transparent, consistent and accurate. Calculating service charges correctly helps maintain a positive landlord-tenant relationship while protecting the profitability of the property.
Recoverable charges mainly include expenses related to water, communal heating, cleaning of common areas, certain building services and taxes such as household waste collection tax. The complete list is established by French regulations.
Yes. French law allows landlords to apply fixed service charges for furnished rentals. The amount must be specified in the rental agreement, paid alongside the rent and is not subject to annual reconciliation. For mobility leases, fixed service charges are mandatory.
Fixed charges correspond to a predetermined amount that does not require subsequent adjustment. Advance payments are monthly contributions followed by annual reconciliation based on actual recoverable expenses. Advance payments are often more accurate but require more administrative work.
No. Major repairs and property improvement works cannot be passed on to tenants as recoverable service charges. Only certain routine expenses related to everyday use, maintenance and building operations can be charged.
The method used to collect service charges does not replace the specific tax rules applicable to LMNP or LMP landlords. However, it directly affects cash flow, property management and the transparency of the rental offer. Landlords should therefore consider these charges alongside their tax regime and accounting arrangements.
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