Written commercial agreement

Significant imbalance

Sudden termination of established relationships

Competition investigation – French law

Civil competition action

French competition law

Competition investigation – European law

European competition law

Vertical restraints

Distribution law

Liability for defective products

Consumer law

Prohibition of measures having equivalent effect

European business law

Corruption

Compliance

Economic law

Shareholders' agreements

Removal of company directors

Abuse of voting rights

Companies

Action for infringement (counterfeiting)

Rights conferred by the trademark

Patentability

Industrial property

Commercial rent review

Renewal of the commercial lease

Despecialization (change of use)

Commercial leases

Reform of contract law

Reform of the law of special contracts

Preliminary sales agreement

Obligation to deliver goods in conformity

Classification of the contract for services (contrat d'entreprise)

Effects of the agency agreement with respect to third parties

Business contracts

Ongoing contracts

Recovery claims

Court-approved transfer plan

Bankruptcy proceedings

Personal data breaches

White collar crime

Commercial law

500 Questions - Business Law

To be entitled to the eviction indemnity, the lessee must meet the conditions to benefit from the status of commercial leases, and consequently the right to renewal, which requires the existence of premises, the registration of the tenant, and the effective operation, during the three years preceding the expiration date of the lease, of a business of which the lessee is the owner. Otherwise, there …

In what cases can the eviction indemnity be refused?

The commercial lease grants the lessee commercial ownership, which cannot be waived. It grants them a right to renewal (Art. L. 145-8 Commercial Code), which is a mandatory public policy provision, with clauses, stipulations, and arrangements intended to defeat it deemed unwritten (Art. L. 145-15) . The right to renewal is acquired upon the conclusion of the lease by the sole effect of the law. However, the lessee may unequivocally waive it  if the waiver, freely consented to , occurs after the right to renewal has arisen . When a lessee has validly waived their right to renewal, the lease automatically terminates at the set term, without the lessor having to give any notice .

Certain contractual arrangements do not, however, prevent the right to renew the lease agreement. Thus, the parties are free to agree on an extension rather than a renewal  or an early departure of the lessee .

The implementation of the right to lease renewal requires that the conditions for benefiting from the protective status of commercial leases are met, namely the existence of a lease concerning a premises or building, the operation of a business or artisanal establishment in the rented premises, and the registration of the owner of the business in the trade and companies register or the national business register.

Trial courts cannot dismiss the tenant's request for lease renewal and order their eviction without ruling on the validity of the clause in the initial lease stipulating that the tenant could not assert their right to renewal.

Cass. 3e civ., 25 February 1976, LawLex202300010096JBJ.

When the correspondence prior to the signing of the two-year lease establishes that the lessee knew they had the right to request the renewal of the lease for nine years, it follows that by accepting this derogatory lease, they unequivocally expressed their intention to waive, with full knowledge, the status of commercial leases.

Cass. 3e civ., 15 April 1992, LawLex202100002990JBJ.

A lessee, who signed a seasonal lease only under the fraudulent maneuvers of the owner, who abusively exploited their situation of dependence, has not validly waived, by this act, the acquired right to commercial property.

Cass. 3e civ., 17 October 2007, LawLex202300010095JBJ.

If the right to renewal is acquired upon the conclusion of the lease by the sole effect of the law, the mandatory public policy provision, which is attached to the status of commercial leases, does not prevent a freely consented waiver, provided it occurs after the right to renewal has arisen.

Cass. 3e civ., 4 May 2006, LawLex202300010094JBJ.

When the tenant has validly waived the right to renewal, the lease automatically ends on the specified term without the landlord having to give notice, so the tenant's continued occupancy constitutes a manifestly unlawful disturbance.

Cass. 3e civ., 8 April 2010, LawLex202300010098JBJ.

Masters of their rights and free to agree on an extension rather than a renewal, the parties to a commercial lease clearly expressed their intention by including in the contract a clause stating that “the lease extension resulting from this agreement shall be one and the same with the extended lease.”

Cass. 3e civ., 26 October 1977, LawLex202300010182JBJ.

The provisions relating to the status of commercial leases, guaranteeing the holder of a commercial lease the right to remain on the premises until the agreed term, do not prohibit the lessor from amicably obtaining the early departure of the lessee.

Cass. 3e civ., 18 May 1994, LawLex202300010183JBJ.

Does the lessee automatically have the right to renew?

When the lessor takes the initiative, they must, in principle, deliver a notice with an offer of renewal by extrajudicial notice, at least six months before the lease expiration date (Art. L. 145-9, para. 5, Commercial Code), the date on which it takes effect, and for the last day of the calendar quarter in the event of tacit extension (Art. L. 145-9, para. 2).

Article L. 145-11 of the Commercial Code specifies that the lessor who wishes to obtain a modification of the lease price must, in the notice, state the rent they propose. Failing this, the new price is only due from the time of the subsequent request, made by a judicial officer's act, by registered letter with acknowledgment of receipt, or in the memorandum provided for in Article R. 145-23 (Art. R. 145-1 Commercial Code), specifying that “disputes relating to the determination of the price of the revised or renewed lease are brought, regardless of the amount of the rent, before the president of the Judicial Court,” who rules on the memorandum (Art. R. 145-23 Commercial Code).

Advice:  Include an offer of renewal and the proposed rent for the renewed lease in the notice to avoid a court order.

Under what circumstances can the lessor take the initiative to renew the lease?

Without requiring a particular form, the lessee may accept the notice with an offer of renewal issued by the lessor. However, the acceptance of the principle of renewal, which results from the sending of the notice, does not, by itself, constitute the conclusion of a new lease. The parties must still agree on the content of the new lease. The lessee's acceptance is lacking when the parties disagree on the start date of the renewed lease, an essential element of the agreement , or when it is not expressed unequivocally .

In case of disagreement on the amount, it is possible to refer the matter to the court, so that the judge can fix the rent for the renewed lease (Art. R. 145-23 Commercial Code). If neither party refers the matter to the court within a two-year period (Art. L. 145-60 Commercial Code), and in the absence of an agreement between the parties on the new rent, the renewal of the commercial lease takes place under the terms and conditions of the lease .

The acceptance by the lessees of an offer to renew a commercial lease is not valid when the parties disagree on the starting date of the renewed lease, an essential element of the contract.

Cass. civ. 3e, 22 April 1980, LawLex202100003219JBJ.

The monovalent nature of the premises cannot imply the tenant's unequivocal tacit acceptance to enter into a renewed lease for a firm nine-year term without a triennial termination option, when the offered rent corresponded to the rent stipulated in the initial lease, without establishing the tenant's consent to the derogatory clause prohibiting any triennial termination option of the lease.

Cass. civ. 3e, 7 September 2022, LawLex202200008698JBJ.

In the absence of an agreement between the parties on the new rent, the renewal of the commercial lease takes place under the terms and conditions of the expired lease.

Cass. civ. 3e, 28 November 2006, LawLex202300010300JBJ.

Is the lessee required to accept the renewal?

In the absence of notice given by the lessor for the contractual expiration date of the lease , the tenant who wishes to obtain the renewal of their lease must request it either within the six months preceding the expiration of the lease or, if applicable, at any time during its extension (Art. L. 145-10, para. 1, Commercial Code). When the lessor has given notice with an offer of renewal for a date after the expiration of the lease, the lessee retains the option to request renewal for the first day of the following term. However, the notice with refusal of renewal given by the lessor for a date after the contractual expiration of the lease nullifies the renewal request made by the lessee after this notice .

Only the owner of the business operated on the leased premises can submit a renewal request. When the premises are leased by several tenants, jointly liable for the payment of rent and the performance of obligations, the landlord cannot be required to agree to the renewal of the lease at the request of one of them acting on their own behalf . The renewal request can also be submitted by an agent of the tenant or by the legal representative when the tenant is a company.

On pain of invalidity, the request for renewal of the commercial lease must be addressed to a person qualified to receive it, in other words, the lessor . The theory of appearance may justify the notification of the renewal request to the wrong recipient. Indeed, the principal may be bound on the basis of apparent authority, even in the absence of a fault that could be attributed to them, if the third party's belief in the extent of the agent's powers is legitimate, this characteristic assuming that the circumstances allow them not to verify the exact limits of these powers .

The request for renewal must be notified by extrajudicial act or by registered letter with acknowledgment of receipt (Art. L. 145-10, para. 2, Commercial Code). The lessee, when notifying the lessor of their request for renewal, may, like the lessor, propose a new rent.

By the expression “failing notice” referred to in Article L. 145-10 of the Commercial Code, it should be understood as “failing notice given for the contractual expiration date of the lease.”

Cass. civ. 3e, 18 December 1991, LawLex202300003293JBJ.

The notice of termination with refusal to renew issued by a lessor for a date after the contractual expiration of the lease nullifies the effect of the renewal request made by the lessee after this notice.

Cass. civ. 3e, 21 February 2007, LawLex202300003294JBJ.

The lessor, who has rented the building to several tenants jointly liable for the payment of rent and the performance of charges, cannot be required to consent to the renewal of the lease at the request of only one of them, so that the request made by one of the co-tenants, alone and in his own name, is inadmissible, even if the other two tenants have accepted the termination but have not requested the renewal.

Cass. com., 9 April 1962, LawLex202300010404JBJ.

The request for the renewal of a commercial lease, which must be served to the lessor, cannot be addressed to a real estate civil company, in the person of its administrator, instead of the lessor in their personal name.

Cass. 3e civ., 29 June 2005, LawLex202300010412JBJ.

The principal may be bound on the basis of apparent authority, even in the absence of any fault attributable to them, if the third party's belief in the extent of the agent's powers is legitimate, this legitimacy requiring that the circumstances allowed the third party not to verify the exact limits of these powers.

CA Aix-en-Provence, 15 September 2015, LawLex202300011340JBJ.

Is the lessee entitled to request renewal?

The lessor is not obliged to accept the tenant's request for renewal. The lessor has a period of three months from the request for renewal of the commercial lease to inform the tenant, by extrajudicial act , of their refusal to renew it, specifying the reasons for this refusal (Art. L. 145-10, para. 4, Commercial Code). The extrajudicial act notifying the refusal of renewal must, on pain of nullity, indicate that the tenant who intends either to contest the refusal of renewal or to request the payment of eviction compensation must bring the matter before the court before the expiration of a two-year period from the date on which the refusal of renewal is served (Art. L. 145-10, para. 4, Commercial Code).

The lessor may also purely and simply accept the tenant's request for renewal, but nothing prevents them from requesting a modification of the lease price, in accordance with Article L. 145-11 of the Commercial Code, which specifies that they must, in the response, indicate the rent they propose.

When the lessor has not made their intentions known within three months following the notification of the renewal request, Article L. 145-10, para. 4, of the Commercial Code states that they “are deemed to have accepted the principle of renewing the previous lease” .

The lessor, who has not enforced opposition to a request for lease renewal and has irrevocably accepted the principle, retains the possibility of requesting the rescission of the new lease if they justify breaches occurring after the renewal .

The silence or late response of the lessor leads to a presumption of acceptance of the renewal under the terms and conditions of the expired lease.

Advice: Formally notify your intention to accept or refuse the tenant's renewal request.

In the absence of being included in a document notified to the lessee, a verbal declaration of refusal to renew the lease, made by the lessor in response to the inquiry of the judicial officer serving a request for lease renewal, does not constitute an act of refusal to renew as provided for in Article L. 145-10 of the Commercial Code.

Cass. 3e civ., 24 September 2020, LawLex202300010624JBJ.

The lessor, who has not indicated whether they intend to refuse the renewal within three months of the notification of the tenant's request, is deemed to have accepted the principle of the lease renewal.

Cass. 3e civ., 3 October 1990, LawLex202300010625JBJ.

If the lessor, who responded late to a renewal request from the lessee, is deemed to have accepted the principle of renewal, they are not deprived of the right to request the setting of a new rent pursuant to Article L. 145-11 of the Commercial Code.

Cass. 3e civ., 4 May 2011, LawLex202300010626JBJ.

The lessor who did not oppose the request for lease renewal cannot, to obtain the rescission of the lease, invoke contractual breaches prior to the date on which the lease was renewed.

Cass. 3e civ., 1 February 2018, LawLex202300010940JBJ.

Is the lessor required to accept the lessee's renewal request?

The renewed lease constitutes a new lease, not an extension of the previous lease, even if it is concluded under the same terms and conditions of the former contract . The parties may choose not to retain the terms and conditions of the expired lease. However, the inclusion of clauses derogating from the status of commercial leases in the renewed lease requires the agreement of the parties . Furthermore, the implementation of the accession clause, insofar as it requires the premises to be returned to their original state, is incompatible with the continuity of enjoyment induced by the renewal of the lease. It follows that the landlord's ability to demand the removal of improvements made by the tenant is postponed until the final termination of the contractual relationship .

The renewed lease must in principle retain the object of the expired lease and cover the same premises . However, when there is no material or contractual indivisibility between the premises, the conclusion of a single lease is not sufficient to allow the main tenant to obtain the total renewal of their lease . Furthermore, the lessor cannot, upon renewal, impose a restriction of enjoyment not provided for in the expired lease .

A new lease is established once the parties agree on the amount of the rent for the renewed lease. In case of disagreement and recourse to the court, the parties must draft a new lease under the conditions set by the final decision within one month following its notification (Art. L. 145-57, para. 2). If the lessor does not send a draft lease conforming to the decision to the lessee for signature within this period, or if there is no agreement within one month of this sending, the order or judgment setting the price or conditions of the new lease serves as the lease, unless the parties agree on a longer duration. The new nine-year lease takes effect from the expiration of the previous lease, or, if applicable, its extension. In this case, the start date of the new lease is either the date for which notice was given, or, if a renewal request was made, the first day of the calendar quarter following this request. However, when the lessor has notified, either by notice or by refusal of renewal, their intention not to renew the lease, and subsequently decides to renew it, the new lease takes effect from the day this acceptance was notified to the tenant by extrajudicial act or by registered letter with acknowledgment of receipt (Art. L. 145-12, para. 3).

In the absence of an agreement to the contrary, the renewal of the commercial lease is carried out under the terms and conditions of the expired lease, except for the power granted to the judge regarding the setting of the price.

Cass. 3e civ., 17 May 2006, LawLex202300011152JBJ.

The courts cannot decide that the tenant accepted the offer to renew the lease and that it was renewed for a fixed term of nine years, without characterizing her unequivocal tacit acceptance, when the rent offered corresponds to the rent stipulated in the initial lease, and without establishing her consent to the derogatory clause prohibiting any option for triennial termination of the lease.

Cass. 3e civ., 7 September 2022, LawLex202200008698JBJ.

A court of appeal cannot uphold the annulment of the sale due to the right of first refusal by stating that the lease, having been tacitly renewed, was renewed under the terms and conditions of the original lease, when the right of first refusal clause was stipulated in favor of the lessee, in the event of a sale, only for the duration of the original lease.

Cass. 3e civ., 13 July 1994, LawLex202200003359JBJ.

The renewal of the lease being incompatible with the restoration of the premises to their original condition, the accession clause, which offers the lessor the option to require the leased premises to be returned to their initial state, can only apply at the end of the contractual relationship and not at the end of the lease to be renewed.

CA Caen, 2nd civ. ch., 20 June 2024, LawLex202400004732JBJ.

If the renewal of a commercial lease occurs, unless otherwise agreed, under the terms and conditions of the lease to be renewed, since the object of this lease concerns undeveloped land, the object of the renewed lease can only concern this undeveloped land.

Cass. 3e civ., 3 February 1988, LawLex202300011153JBJ.

The new lease, which does not include any premises used for habitation, the only type that may be subject to partial repossession by the lessor, must necessarily cover all the rented premises, as the latter cannot repossess a courtyard initially included in the lease.

Cass. com., 1 December 1966, LawLex202300011154JBJ.

When the principal tenant has been specifically authorized to sublet premises that are completely independent from the rest of the building for an activity distinct from their own, and the conclusion of a single lease is not sufficient to allow them to obtain the full renewal of their lease, they cannot claim a right to renewal for the part of the sublet premises where their business is not operated.

Cass. 3e civ., 7 July 1993, LawLex202200009886JBJ.

The lessor, obliged to ensure the lessee's peaceful enjoyment of the leased property, cannot, upon the renewal of a commercial lease, impose a restriction on this enjoyment that is not provided for in the expired lease.

Cass. 3e civ., 13 November 1979, LawLex202300011156JBJ.

Does renewal result in the conclusion of a new lease?

A determining element of the parties' consent, the rent amount results from the express or tacit agreement of the parties, which must, however, demonstrate a precise, complete, and firm commitment . The tenant's continued occupation of the leased premises after the notice with an offer of renewal stating a new rent does not characterize the parties' agreement on the price of the renewed lease . The legal provision that, in the event of a dispute concerning the price of the renewed lease, may result in the maintenance of the previous rent does not violate the requirements of Article 6 § 1 of the ECHR. The existence of the right of option indeed allows for the resolution of any potential infringement on the right of access to a court by offering the contracting parties a withdrawal option at the end of the judicial proceedings .

In principle, the rent amount of the renewed lease must correspond to the rental value of the leased premises (Art. L. 145-33, para. 1, Commercial Code). However, Article L. 145-34 of the Commercial Code sets capping rules that limit its variation. Unless there is a significant change in the elements of the rental value, the rate of rent variation applicable when the lease to be renewed takes effect, if its duration does not exceed nine years, cannot exceed the variation, since the initial setting of the rent of the expired lease, of the quarterly commercial rent index or the quarterly index of tertiary activities rents mentioned in Article L. 112-2, paragraphs 1 and 2, of the Monetary and Financial Code, published by the National Institute of Statistics and Economic Studies. The capping rules do not apply to leases with a contractual duration exceeding nine years . Article L. 145-34 sets a cap. Thus, when the rental value of the leased premises is lower than the rent of the expired lease  or the capped rent , the rent of the renewed lease must be set at the amount of this rental value.

The parties are free to arrange the financial terms of the lease and may exclude the capping rules when setting the rent for the renewed lease . The exclusion of the capping rules may also result from an implicit waiver by the lessee upon the renewal of the lease.

In the event of rent uncapping or when the lease term is contractually longer than nine years, the resulting rent variation cannot lead to increases exceeding, for one year, 10% of the rent paid during the previous year (Art. L. 145-34).

This value is determined based on the characteristics of the premises in question, the intended use of the premises, the respective obligations of the parties, the local commercial factors, as well as the prices commonly practiced in the vicinity.

Advice: To obtain the removal of the rent cap for the renewed lease, establish a significant change in the elements of the rental value.

A request to set the rent for the renewed lease must be rejected when both parties have expressed their desire to renew the contract “under the same previous terms and conditions” without any reservations, and they have expressly agreed on the terms and conditions of the previous lease.

Cass. 3e civ., 15 April 2021, LawLex202200000578JBJ.

Does not characterize the agreement of the parties on the price of a new rent, a court of appeal which, not noting the existence of a decision by the commercial rent judge, holds that by remaining in the leased premises after the notice with an offer of renewal, the lessee has acquiesced to the new rent stated in this notice.

Cass. 3e civ., 20 May 1992, LawLex202200003400JBJ.

The fact that any dispute over the price of a renewed lease is not resolved by a judicial determination at the rental value and may result in maintaining the previous rent does not violate the right of access to a judge enshrined in Article 6 § 1 of the European Convention on Human Rights and Fundamental Freedoms, insofar as the parties can always exercise their right of option.

Cass. 3e civ., 30 May 2024, LawLex202400003941JBJ.

The provisions of Law No 86-12 of 6 January 1986 did not amend Article 23-6 of the Decree of 30 September 1953 (current Art. L. 145-34 Commercial Code), which excludes from its scope leases with a contractual duration exceeding nine years.

Cass. 3e civ., 7 June 1989, LawLex202300011161JBJ.

Trial courts cannot set the rent for the renewed lease according to the capping rule when they find that, due to tacit renewal, the lease has exceeded twelve years.

Cass. 3e civ., 8 November 1995, LawLex202300011163JBJ.

The rental value of the leased premises being lower than the rent of the expired lease, the rent of the renewed lease must be set at this value.

Cass. 3e civ., 6 May 2021, LawLex202100005113JBJ.

When the lessee requests that the rent of the renewed lease be set at the rental value, which is lower than the indexed rent, the trial court cannot apply the rent cap without first determining the rental value.

Cass. 3e civ., 5 November 2014, LawLex202300011165JBJ.

Nothing prevents the parties from mutually agreeing to determine in advance, through a lease stipulation, the conditions for setting the price of the renewed lease.

Cass. 3e civ., 10 March 2004, LawLex202100004756JBJ.

What conditions apply to the determination of the rent for a renewed lease?

The lessor may refuse to renew the lease upon its expiration. The Commercial Code thus offers the possibility to refuse the renewal of the lease without specifying reasons, with the sole obligation of paying the lessee an eviction indemnity to compensate for the damage caused by the lack of renewal (Art. L. 145-14 Commercial Code). Beyond this refusal with eviction indemnity, the lessor has the right to reclaim the leased premises. In this case, they refuse the renewal without indemnity but must specify the reasons for reclaiming (Art. L. 145-17 Commercial Code). The lessor may invoke, to justify the refusal without indemnity, a serious and legitimate reason against the outgoing tenant, or reasons directly related to the building, such as its demolition due to unsanitary conditions or the need to rebuild it. This right of repossession is therefore limited, as it does not allow the landlord to repossess the leased premises upon the expiration of the lease, but only permits repossession in cases where renewal is not required.

Can the lessor refuse the renewal?

The principle of the right not to renew the lease entails the landlord’s obligation to pay the tenant compensation for dispossession as redress for the harm suffered as a result of the lease not being renewed (Art. L. 145-14, para. 1, Commercial Code). This indemnity is intended to cover the costs incurred by setting up in a business of the same value. The landlord, who refuses the renewal, cannot avoid the obligation to offer an eviction indemnity . However, they can be exempted if, during the indemnity determination procedure, they invoke reasons for refusal that arose after the notice or were discovered afterward, provided that they are sufficiently serious .

For his part, the lessee, to claim this compensation, must meet the conditions for the right to renewal and fulfill the conditions for the application of the commercial lease status. Otherwise, the status may be denied to the lessee and justify that a refusal of renewal with eviction compensation is transformed into a renewal without compensation .

When a landlord refuses the renewal of the lease requested by the tenant and offers as eviction compensation a new lease granted on the same premises, except for certain cellars replaced by others, the trial court cannot declare such an offer “satisfactory in principle.”

Cass. 3e civ., 1 February 1989, LawLex202300011377JBJ.

If the modification of the leased premises by a lessee, which, under a lease prohibiting “any change in layout or modification to the main structure, piercing of walls or otherwise,” requires the lessor's consent, it does not constitute a serious and legitimate reason for refusing renewal as long as it does not appear to have caused deterioration or depreciation of the leased property.

CA Paris, 7 September 2011, LawLex202200001287JBJ

The delays in payment of some occupancy terms are not of such gravity that they should be sanctioned by the forfeiture of the right to eviction compensation.

Cass. 3e civ., 17 October 2012, LawLex202300011380JBJ.

The offer of an eviction indemnity does not prevent the lessor from subsequently refusing the renewal of the lease without indemnity, if it is established that the conditions for the right to renewal are not met.

Cass. 3e civ., 13 July 1994, LawLex202300009507JBJ.

Can the lessee claim compensation from the lessor for non-renewal?

The right to reconsider allows a lessor who has refused to renew the commercial lease, to avoid paying the eviction indemnity by retracting their refusal. Until the expiry of a period of fifteen days from the date on which the decision becomes res judicata, the owner can avoid paying the eviction indemnity and agree to the renewal of the lease (Art. L. 145-58 Commercial Code) . Exercising the right of repentance requires that the notice of non-renewal of the lease is valid . The right to reconsider must, in principle, be notified to the tenant by extrajudicial act or by registered letter with acknowledgment of receipt, but it can also be exercised informally as long as the lessor has expressed themselves clearly and unequivocally . This is not the case with the absence of payment of the eviction indemnity  or the proposal of a new lease .

The exercise of the right of withdrawal requires that the tenant be still in the leased premises and has not already rented or purchased another property intended for relocation (Art. L. 145-58 Commercial Code). These conditions are alternative and not cumulative , the absence of one of them renders the right of withdrawal inadmissible. Thus, if the lessee is still in the premises, the purchase of land after the refusal to renew, which has acquired a certain date before the notification of the right of withdrawal, is enforceable against the lessor, without considering the date of determination of the eviction indemnity . The lessor, who can no longer avoid paying the eviction indemnity when the lessee has already rented or purchased another property intended for relocation, cannot, under the guise of offering a new lease on the same premises, indirectly recover the right of withdrawal .

The exercise of the right of withdrawal complies with the conditions set out in Article L. 145-58 of the Commercial Code when the lessor has exercised their right of withdrawal before a decision with the force of res judicata has been made regarding the amount of the eviction indemnity and the lessee has not initiated an irreversible process of vacating the premises.

Cass. 3e civ., 15 February 2023, LawLex202300011382JBJ.

A court of appeal cannot hold, to state that the lease is renewed for nine years under the previous terms and conditions, that by writing to the lessee, by letter, that their lease was renewed for nine years, the lessor exercised their right of withdrawal, while confirming the judgment that was appealed, the court declared the notice given to the lessee null.

Cass. 3e civ., 15 December 1999, LawLex202300011381JBJ.

The withdrawal of proceedings and action constitutes the exercise, by the lessor, of the right of withdrawal provided for in Article 32 of the Decree of 30 September 1953 (current Art. L. 145-58 Commercial Code) and necessarily implies the offer of renewal of the lease which was previously terminated by the notice to quit. Cass. 3e civ., 25 October 1972, LawLex202300011443JBJ.

When a landlord has given notice to the tenant with a refusal to renew and an offer of eviction compensation, before transferring the leased property, the purchaser may exercise their right to retract by filing a request for rent determination.

Cass. 3e civ., 23 February 1982, LawLex202300011444JBJ.

If the failure to pay the eviction indemnity does not indicate the intention to renew the lease that has ended, the landlord, who issued receipts or notices of due dates generally referring to rents, but also, on certain dates, the occupancy indemnity, has not demonstrated this intention either.

Cass. 3e civ., 20 June 1995, LawLex202300011446JBJ.

The exercise by the lessor of their right of withdrawal entails the renewal of the lease and cannot include the proposal of a new lease involving a substantial modification of the rent determination terms.

Cass. 3e civ., 12 September 2019, LawLex202300011448JBJ.

The conditions set by Article L. 145-58 of the Commercial Code are alternative and not cumulative.

Cass. 3e civ., 14 November 1996, LawLex202300011783JBJ.

The absence of one of the conditions of Article L. 145-58 of the Commercial Code renders the right of withdrawal inadmissible.

Cass. 3e civ., 24 April 1970, LawLex202300011782JBJ.

The owner, to whom Article L. 145-58 of the Commercial Code no longer allows to avoid the payment of eviction compensation when the tenant has already rented or purchased another building intended for their relocation, cannot, under the guise of offering a new lease on the same premises, indirectly recover a right of withdrawal they have lost and thus thwart the full compensation for the actual damage suffered.

Cass. 3e civ., 28 March 1979, LawLex202300011789JBJ.

Can the lessor reverse the decision not to renew the lease?

To be entitled to the eviction indemnity, the lessee must meet the conditions to benefit from the status of commercial leases, and consequently the right to renewal, which requires the existence of premises, the registration of the tenant, and the effective operation, during the three years preceding the expiration date of the lease, of a business of which the lessee is the owner. Otherwise, there is a denial of status, which can be invoked by the lessor when giving notice or in response to the lessee's renewal request, or even until the expiration of the one-month period provided for in Article L. 145-57, para. 2, of the Commercial Code to exercise their option right . The denial of the right to the status of commercial leases does not need to be preceded by a formal notice. However, the lessor may waive the denial of status. The waiver must be unequivocal and cannot result solely from the lessor's knowledge of the absence of one of the statutory conditions .

The lessor may also refuse the renewal without being liable for any compensation if they justify a serious and legitimate reason against the outgoing tenant (Art. L. 145-17, I, 1° Commercial Code). If the lessor fails to establish one of the reasons provided for in Article L. 145-17 of the Commercial Code, they remain liable for the payment of eviction compensation . The reason invoked by the lessor does not necessarily have to be specific to the status of commercial leases  or related to the execution of the lease . The serious and legitimate reason for the refusal of renewal may be constituted by a fault attributable to the lessee or to the persons for whom they are responsible . The lessor can only invoke facts attributable to the outgoing tenant themselves . The reason for non-renewal can only be invoked if the offense committed continued or was repeated more than one month after the lessor's formal notice to cease it. The absence of formal notice can only be invoked by the beneficiaries of the status of commercial leases . Under penalty of nullity, the formal notice must be made by extrajudicial act, specify the reason invoked, and reproduce the terms of 1° of I of Article L. 145-17 (Art. L. 145-17, I, 1° Commercial Code) . The nullity of the formal notice that does not comply with these requirements prevents the lessor from invoking a serious and legitimate reason to support their refusal of renewal, unless another is issued. From the formal notice, the lessee has a period of one month to regularize the situation, failing which it is irregular. This period cannot be increased or reduced by mutual agreement between the parties or by the judge. The regularization must be effective within the month of the formal notice . When the refusal of renewal for a serious and legitimate reason is established, the lease ends on its effective date. In addition to the loss of the right to eviction compensation, the lessee may be liable for damages if the fault constituting a serious and legitimate reason they committed caused harm to the lessor .

The lessor may finally refuse the renewal of the lease to construct or reconstruct the existing building, provided they pay the evicted tenant the eviction indemnity. They can avoid paying this indemnity if they offer the evicted tenant premises that meet their needs and possibilities, located in an equivalent location. The reconstruction must be total, not merely partial, which implies the demolition of the existing building. The tenant has a period of three months to either express their acceptance by extrajudicial act or by registered letter with acknowledgment of receipt, or to bring the matter before the competent court. The owner may also defer the renewal of the lease for a maximum period of three years if they intend to add stories to the building and if this addition necessitates the tenant's temporary eviction. The tenant is entitled to compensation equal to the damage suffered, not exceeding three years of rent. The right to renewal is also not enforceable against the owner who has obtained a permit to construct a residential unit on all or part of one of the vacant plots. This right of repossession can, in any case, only be exercised on the part of the land essential for the construction.

Advice: Make sure that the reason for refusing the eviction indemnity is genuinely serious and that the lessee has been formally notified to put an end to it.

A court of appeal cannot hold, to refuse the landlord of a commercial premises the possibility of withdrawing their offer to renew the lease, that, since the parties' agreement on the lease renewal has been reached, it is unnecessary to examine the alleged grievances that occurred after the renewal, without determining whether the landlord had the period provided for in Article L. 145-57, para. 2, of the Commercial Code until the expiration of which they can withdraw their offer.

Cass. 3e civ., 31 October 1989, LawLex202300011852JBJ.

The landlord's waiver of the right to invoke the absence of entitlement to status cannot result solely from their knowledge of the tenant's lack of registration.

Cass. 3e civ., 19 November 2015, LawLex202100001387JBJ.

The lessee, who made significant alterations in the building constructed by him on the leased land after the notice to vacate was issued and despite the landlord's prohibition, committed a fault, which caused damage to the latter by making the eviction more difficult, thus justifying the award of damages.

Cass. 3e civ., 21 November 2001, LawLex202300011936JBJ.

The lessor who does not justify any of the grounds of Article L. 145-17 of the Commercial Code is liable for eviction compensation.

Cass. 3e civ., 18 September 2025, LawLex202500008118JBJ.

A court of appeal cannot hold that it is accepted that the lessor may, in support of a refusal to renew without compensation, rely on a reason of which they became aware or which occurred after the notification of their acceptance or offer, but must base itself on reasons specific to the status of commercial leases.

Cass. 3e civ., 24 January 1996, LawLex202300011857JBJ.

If the lessor can refuse the renewal of the lease without being liable for any compensation when they justify a serious and legitimate reason against the outgoing tenant, the text does not require that the reason for refusal, which is not legally defined, be related to the performance of the lease. The lessor may rely on facts attributable to the manager of the tenant company that it introduced into the leased premises and who represents it.

Cass. 3e civ., 29 June 1977, LawLex202300011858JBJ.

The actions of the tenant's spouse, who was continually present in the common areas of the two closely adjacent dwellings, created an atmosphere of constant and profound discomfort, making it intolerable for the tenant couple to remain in the premises. This justifies the refusal to renew the lease for a serious and legitimate reason, as the disturbance observed is connected to the lease granted to the tenant.

Cass. com., 14 February 1961, LawLex202300011861JBJ.

500 Questions - Business Law

347. In what cases can the eviction indemnity be refused?

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347. In what cases can the eviction indemnity be refused?

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