OFS and BRS
Introduced by the ALUR law of March 24, 2014, the OFS (Organisme de Foncier Solidaire) is a non-profit structure approved and controlled by the Prefect. Its main purpose is to acquire land or buildings and make them available to buyers through long-term leases, among which the solidarity real lease (BRS – Bail Réel Solidaire) is preferred. The ELAN law also allows social housing organizations to seek OFS approval to transfer properties with a BRS.
In the classic scheme, for a secure social accession to property operation, the OFS buys land and designates an operator responsible for construction and marketing the housing under a specific legal contract: the solidarity real lease (BRS), whose characteristics, particularly its duration (between 18 and 99 years) and the resale formula, it will have defined.
Separating Land from Buildings
Since real estate prices in dense municipalities are often driven by the high price of land, separating the value of the land from the value of the construction and thus reducing the price of housing has appeared as a way to maintain social diversity in these territories.
The OFS as the Land Operator
The OFS ensures the acquisition and then the collection of the land occupancy fee from each buyer and approves resales by ensuring compliance with the clauses in the BRS. It can also assist buyers in this resale by promoting this mode of occupation. In some cases, it may temporarily buy back the housing and thus assume a buyback guarantee for the benefit of the buyers.
In parallel with this main activity, the OFS can also conduct other activities related to its status as a landowner, such as leasing land to a social landlord for the construction of social rental housing.
This system can also be relevant for other themes: the sale of social housing assets, intervention in old town centers, the requalification of degraded co-ownerships, etc.
The BRS Governs the Relationships Between the OFS and the Housing Occupant
The BRS is a new legal contract created by an ordinance of July 20, 2016. It is a lease by which a buyer benefits from the use of housing under privileged conditions, both for new and old properties:
- If it is a new home, it benefits from a reduced VAT rate.
- The purchase price is capped at PSLA (Prêt Social Locatif Aidé) price ceilings.
- This same price is reduced by the portion represented by the purchase of the land, generally between 15 to 30% of the final price.
- When decided by the community, the buyer can benefit from a reduction of 30 to 100% of the property tax on built property.
In return for these advantages, the buyer must comply with certain rules:
- They must respect, upon moving in, the PSLA income ceilings.
- They must occupy the housing as their primary residence.
- They must pay, in addition to their loan monthly payment, a fee corresponding to the right to occupy the land and the landowner’s management fees.
The main innovation of this lease lies in the fact that the conditions for reselling the housing are set in the lease and are transferable to successive buyers. Indeed, this lease provides from the outset that:
- The new buyer also respects the PSLA income ceilings.
- The resale price of the housing respects a resale formula and cannot exceed the PSLA price ceilings.
The resale will have the consequence of « recharging » the lease with its initial duration, which can range from 18 to 99 years, and thus guarantee the long-term economic and social accessibility of the housing.