We are just starting out with a holiday let and are putting a contract together. Is it legal for us to say that the deposit is forfeited to us the owners if the holiday is cancelled by the tenant six weeks or less before the arrival date? We have seen contracts that say thirty days or less.
If we the owners cancel I know we must pay back monies already paid but is it true that the tenant can claim compensation? I am sure I read somewhere that if the deposit is referred to as ' arrhes', this is not the case.
French rental contracts
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Margaret E
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French rental contracts
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kevsboredagain
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French Cricket
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You're right in that there are two types of deposit payment, Margaret.
One is an 'acompte', which is effectively an advance payment towards the holiday. An acompte ties both seller and buyer into the contract, which can't then be cancelled without the agreement of both parties, and the acompte is not reimbursable. If an acompte has been paid and either party then pulls out of the contract, the other party can sue for damages - so if your guest cancels at the last minute, the acompte will allow you to ask for the balance payment, and if you cancel, your guest can demand compensation..
The other is 'arrhes'. If this is what you ask for, your guest is allowed to cancel but won't receive back any of their deposit; you can't pursue them for any part of the balance payment. On the other hand, if you cancel, you are legally bound to reimburse twice the amount of the arrhes. The guest can't request compensation above and beyond this.
If you don't specify which of the two types you request, it will be presumed to be arrhes.
One is an 'acompte', which is effectively an advance payment towards the holiday. An acompte ties both seller and buyer into the contract, which can't then be cancelled without the agreement of both parties, and the acompte is not reimbursable. If an acompte has been paid and either party then pulls out of the contract, the other party can sue for damages - so if your guest cancels at the last minute, the acompte will allow you to ask for the balance payment, and if you cancel, your guest can demand compensation..
The other is 'arrhes'. If this is what you ask for, your guest is allowed to cancel but won't receive back any of their deposit; you can't pursue them for any part of the balance payment. On the other hand, if you cancel, you are legally bound to reimburse twice the amount of the arrhes. The guest can't request compensation above and beyond this.
If you don't specify which of the two types you request, it will be presumed to be arrhes.