You are a tenant on a commercial lease

Your commercial lease is about to expire and you don't know how to secure a renewal. Your landlord refuses to renew and demands that you return the premises. An indexation clause is causing your rent to skyrocket. You want to sell your business but a clause in the lease prohibits it.

The status of commercial leases (articles L.145-1 et seq. of the French Commercial Code) protects tenants operating a business or craft activity. This is the basis of commercial property: the right to renew the lease, and failing that, compensation for eviction. But this right only exists if the forms and deadlines are respected. If you give the wrong notice, apply for renewal late or transfer the lease improperly, you may lose your acquired rights.

Our firm handles

  • Reviewing and negotiating your commercial lease contract before signing (destination clauses, rental charges, works, solidarity)
  • Application for renewal of a commercial lease and setting the rent for the renewed lease before the rent judge
  • Challenging a refusal to renew and calculating eviction compensation
  • Termination of the lease every three years (notice in accordance with article L.145-9 of the French Commercial Code)
  • Sale of leasehold rights or business assets, including negotiations with the lessor
  • Defence in the event of enforcement of a resolutory clause for unpaid rent
  • Challenging a rent review or an unreasonable rent increase
  • What happens to the lease in the event of insolvency proceedings (protection, receivership, compulsory liquidation)?

Legal focus - Eviction compensation (article L.145-14 of the French Commercial Code)

A lessor who refuses to renew a commercial lease must, unless there is a serious and legitimate reason for not doing so, pay the lessee an eviction indemnity «equal to the damage caused by the failure to renew». This compensation includes the market value of the business, removal and relocation costs and the commercial nuisance. The tenant remains in the rented premises until the compensation has been paid. This is at the heart of commercial property and one of the major issues in commercial lease law.

You are the lessor of commercial premises

Your tenant is no longer paying the rent. You want your commercial premises back when the lease expires. A lessee has sublet without your agreement, or is carrying on an activity that does not comply with the purpose of the contract. You are considering selling your commercial property and must respect the tenant's right of pre-emption introduced by the Pinel Act.

Commercial leasing law imposes strict obligations on the lessor, from the allocation of charges (compulsory inventory since the Pinel law) to the issue of notice to quit. Irregular notice is void. If you refuse to renew the lease without a legitimate reason, you will be liable to pay compensation for eviction, which is often considerable. Conversely, when faced with a defaulting tenant, the application of the resolutory clause is subject to precise formalities: an order to pay, a period of one month, and a court order. The conditions of application are strictly controlled by the courts.

Our firm handles

  • Drafting tailor-made commercial leases, overriding leases and precarious occupation agreements
  • Giving notice with or without an offer to renew a commercial lease
  • Enforcement of the resolutory clause and eviction of defaulting tenants
  • Recovery of unpaid rent
  • Setting the rent for a renewed lease and de-capping procedures before the rent judge
  • Three-yearly rent reviews (ILC or ILAT indices, rental value)
  • Disputes relating to rental charges, works and the obligation to deliver the property
  • Rental situation audit prior to the acquisition of commercial premises or a building

The life cycle of a commercial lease (3-6-9 lease)

1

Conclusion of the lease

2

1st three-yearly deadline

3

2nd three-yearly deadline

4

Leave or renewal

5

Setting the rent

6

Eviction compensation

Our work on commercial leases

Our firm advises and litigates at every stage of commercial leases. Our practice covers all aspects of commercial leases and their extension into commercial law and insolvency law, where the lessee is subject to protection, reorganisation or liquidation proceedings.

We act for retailers and craftsmen, as well as companies owning commercial premises, real estate companies and property investors. This dual practice - on both the lessee and lessor sides - enables us to anticipate the positions of the opposing party and adapt our legal strategy accordingly.

Advice and writing

  • Drafting and negotiating commercial leases, derogatory leases and precarious occupation agreements
  • Pinel Act compliance audit (breakdown of charges, inventory of fixtures, inventory)
  • Assistance with the sale of a business and the transfer of a lease
  • Partial or total despecialisation of the tenant's commercial activity
  • Analysis of the lease contract and sensitive clauses (indexation, termination, joint and several liability)

Litigation

  • Procedures for setting rents before the commercial rents judge (review, removal of ceiling)
  • Challenging notice to quit, refusal to renew, eviction compensation
  • Resolutory clause, termination of the commercial lease and eviction
  • Disputes relating to rental charges, works and the obligation to deliver the property
  • Fate of commercial leases in insolvency proceedings
  • Representation before the Court of First Instance and the Court of Appeal