Climate & Resilience Act: What Are the Consequences for Property Owners?

The DPE: A Mandatory Diagnosis for Selling or Renting

The Energy Performance Certificate (DPE) is now an essential requirement when selling or renting out a property. It assesses energy consumption and greenhouse gas emissions, assigning a rating from A (highly energy-efficient) to G (highly energy-consuming).

Under the Climate & Resilience Act, the DPE has become a central regulatory tool in the property market. Article 176 of the law amends the French Construction and Housing Code, introducing new obligations for owners of low-energy-performance properties, with a clear objective: the gradual eradication of energy-inefficient housing in France.

Energy-Inefficient Properties: A Timeline of Progressive Rental Bans

Properties rated F and G — characterized by poor insulation and high energy consumption — are now specifically targeted by lawmakers.

• Since January 1, 2023: ban on renting properties classified as G+

• From January 1, 2025: ban extended to all properties rated G

• From January 1, 2028: ban extended to properties rated F

Previously, renting such properties remained possible provided that energy renovation works were carried out within two to five years. Owners must now anticipate and plan renovation works to preserve both rental income and long-term asset value.

Rent Freeze and Direct Impact on Landlords

A Strong Incentive Measure

Since August 25, 2022, rents for properties classified as F and G have been frozen. Landlords may no longer increase rents, including upon lease renewal or re-letting.

This measure strongly encourages property owners to undertake energy renovation works, a necessary step to regain pricing flexibility and secure rental profitability — particularly in high-demand urban areas and premium markets.

Energy Renovation: Costs but Also Financial Support

By 2028, all F- and G-rated properties will need to undergo energy improvement works, which may represent a significant financial investment for owners.

Government Support: MaPrimeRénov

To facilitate this transition, the French government offers various financial aid schemes, including MaPrimeRénov, subject to income conditions. This program helps finance works such as:

• insulation of walls, roofs, and floors,

• replacement of heating systems,

• installation of high-performance domestic hot water systems,

• and, more broadly, any action aimed at reducing energy consumption.

These support schemes are essential levers for maintaining long-term property value, including for older high-end real estate assets.

Toward a Fairer DPE for Small Properties

A Long-Awaited Reform for Properties Under 40 sqm

On February 12, 2024, the Ministry for Ecological Transition launched a consultation on a draft decree aimed at making DPE thresholds fairer for small dwellings. This reform will come into force on July 1, 2024, and will concern approximately 11% of the metropolitan housing stock.

Statistics show that properties under 40 sqm are more severely penalized by the DPE methodology, as energy consumption is calculated per square meter. Since domestic hot water needs are similar for a 20 sqm and a 30 sqm apartment, the consumption per sqm is mechanically higher for smaller units.

This has created significant constraints for landlords renting studios and small apartments, who are particularly exposed to rent freezes and rental bans.

A New DPE Rating from July 2024

From July 1, 2024, eligible properties will be able to obtain a new DPE label, downloadable via ADEME’s DPE-Audit Observatory platform by entering the number of the existing DPE.

This reform aims to ensure a fairer and more consistent assessment of energy performance for small surface properties.