Commercial Leases/Business Goodwill

Other clauses are restrictive insofar as they make the transfer subject to the landlord's authorization, or even to their participation in the act itself. The clause prohibiting the assignment of the lease without the landlord's authorization allows the latter to assess the transfer project  and to approve or refuse a potential assignee for the acquisition of the leasehold right. The prohibition o …

Lessor's consent

Other clauses are restrictive insofar as they make the transfer subject to the landlord's authorization, or even to their participation in the act itself. The clause prohibiting the assignment of the lease without the landlord's authorization allows the latter to assess the transfer project  and to approve or refuse a potential assignee for the acquisition of the leasehold right. The prohibition of clauses forbidding the assignment of the lease to the purchaser of the business, which only applies to an absolute and general prohibition of any assignment and not to simple limiting or restrictive clauses, does not target the clause that makes the assignment of the lease subject to the landlord's express and written agreement , even in the case of an assignment to the purchaser of the business . Indeed, the clause, which only authorizes the assignment of the leasehold right to the purchaser of the business, while making this assignment subject to formalities of obtaining the landlord's prior express authorization or their call to participate in the act, is actually intended only to organize the assignment of the leasehold right . Therefore, the approval clause that allows the landlord to control the regularity of the assignment, the morality, solvency, and competence of the potential acquirer of the leasehold right is lawful .

When a clause only provides for the landlord's participation in the transfer deed, their authorization is not required; only their presence at the conclusion of the deed is necessary. Such a clause applies when the transfer involves all the elements of the business assets . It is not necessary for the landlord to be present at the transfer of the business assets as long as they have been summoned to participate in the transfer of the lease rights , even if this occurs subsequently . The landlord, who has been previously and duly summoned, cannot later invoke their voluntary absence from the transfer operations to claim that they did not approve the transferee . The landlord's involvement in the transfer deed, for the purpose of giving their approval, does not grant them the status of a contracting party, so they cannot be sued for annulment of the transfer of lease rights .

In practice, nothing prevents the lessee who must obtain the lessor's authorization before concluding the lease assignment from entering into the agreement subject to the suspensive condition of obtaining the owner's consent . The methods of obtaining the lessor's approval can take several forms. It may be a simple authorization, a written agreement, an express authorization, or even tacit acceptance . Indeed, failing to complete the formalities provided by the approval clause, the lessee may be allowed to provide proof of the lessor's tacit and unequivocal acceptance of the assignment and their waiver of this clause . The trial court judges have sovereign power to assess the proof of the lessor's tacit consent to the lease assignment . Tacit acceptance of the lease assignment requires, in any case, a positive act by the lessor unequivocally establishing that they have accepted the assignee as the new lessee . The fact that the lessor has collected payments and received cash payment of outstanding charges does not necessarily imply the unequivocal intention to recognize an occupant as the lessee . Similarly, when the lessee can only assign their lease right to the purchaser of their business, after obtaining the lessor's express and written authorization, and it is neither justified nor even alleged that the successive assignees have been the successors of the assignor in their business, the issuance of a receipt by the lessor cannot be considered as acceptance of an irregular situation . Conversely, it is different when, prior to the assignment act, the assignee was introduced by the assignor to the lessor and, following this contact, the latter gave the purchaser authorization to have installations carried out by Gaz de France, concerning the replacement of the assignor by the assignee in the building , when they accepted rent payments from the assignee and issued a demand for payment of unpaid rent and charges based on the termination clause included in the lease , or in the case of rent receipts in the name of the assignee and circumstances demonstrating that the lessor dealt directly with them .

The response to the request for approval must be communicated within a reasonable time. The absence of a response within such a timeframe may constitute a fault on the part of the landlord. Thus, the landlord who has not responded fairly to the requests for approval of takeover offers transmitted to them causes harm to the tenant, as the lack of response within reasonable timeframes prevented the tenant, by assigning the lease for consideration, from reducing their debts and liabilities accordingly, and the notification, if applicable, of a refusal of approval prevented them from exercising a remedy and/or finding other assignees before forcing the liquidator to not continue the lease .

The lessor must justify their refusal. When it is unjustified, the lessee may seek judicial authorization to assign the lease . In urgent cases, the summary proceedings judge may authorize the assignment of the leasehold right, pending the trial court's judgment . The Versailles Court of Appeal thus held that an unfounded refusal of approval constitutes a manifestly unlawful disturbance, which the summary proceedings judge may stop and remedy by ordering any measure to this end . However, when the judicial authorization to assign the lease was limited to the partners in their personal capacity of a company in formation, the Court of Cassation considered that the court of appeal could not recognize the standing to act of the company registered since then, against the lessor, without determining whether the approval for the lease assignment had been given to it by the lessor .

The landlord's refusal, which cannot be discretionary, must be based on a legitimate reason . It is subject to judicial review, and in the case of an abusive refusal, the courts may either override it or award damages . A refusal that is not based on any serious consideration , or for which no reason is alleged , is considered abusive. The following do not constitute a legitimate reason for refusing approval: the circumstance that the landlord does not want to renew leases in the building to undertake a renovation project , the failure of negotiations initiated by the landlord with the future assignee for the conclusion of a lease contract , the landlord's inability to ensure the assignee's solvency when the first months of activity are satisfactory and will allow the assignee and the assignor, as guarantor, to meet the annual rent amount , or handwritten account statements produced by the landlord that do not constitute a certain, liquid, and payable debt that could justify a refusal of the assignment subject to the prior and effective settlement of amounts owed by the lessee . The lessee, to whom the landlord abusively refuses the assignment of the lease, must be able to obtain compensation for the damage suffered by receiving an amount corresponding to what they would have received if the landlord had not abusively refused to give consent. However, they cannot claim the return of rents paid after the date on which the lease assignment could have occurred, as they continued to occupy the premises .

The assignee may also obtain compensation for the damage suffered as a result of the failure of the assignment. Thus, the landlord, who, having no legitimate reason to refuse to consent to the assignment of the lease right to an assignee with the same activity as the assignor, signs, in a hasty manner, an amicable termination of the lease with the lessee, thereby making the assignment impossible, commits a fraud against the rights of the assignee, whose damage resulting from the fraudulent actions of the landlord and the lessee must be compensated . Similarly, the landlord must be ordered to pay damages to compensate for the harm suffered by the assignor and the assignee due to commercial disruption, loss of time, and unrecoverable expenses, when his haste to act in terminating the lease against his lessee for irregular assignment reveals his malicious intent  . Furthermore, the lessee, who fails to comply with his obligation to seek the landlord's authorization before any assignment and to call him to the authentic act, commits a fault and must compensate for the damage caused to the assignee, by his eviction, which is the direct consequence of the non-compliance with the lease provisions . However, he cannot be held liable for the failure of the suspensive condition relating to the landlord's consent to the assignment, when the non-fulfillment of this condition is the result of the landlord's requirements .

Cass. com., 19 February 1963, LawLex202300013568JBJ.

Cass. 3e civ., 19 December 1983, LawLex202300013567JBJ.

Cass. 3e civ., 10 June 2009, LawLex202200008148JBJ.

Basse-Terre, 14 March 2024, LawLex202400002498JBJ, which admits that the lessor may waive, expressly or tacitly, the irregularity consisting of the absence of prior approval for a lease assignment.

Cass. com., 4 January 1965, LawLex202300013565JBJ.

Cass. 3e civ., 17 October 1968, LawLex202300013654JBJ.

CA Chambéry, 18 June 2024, LawLex202400004631JBJ.

Cass. 3e civ., 29 April 1969, LawLex202300013656JBJ. Also see CA Paris, 13 February 2019, LawLex202200007790JBJ, prec.: the fact that the lessor collected the sums paid by the assignee of the lease rights in return for his occupation of the premises does not imply acceptance of his status as a tenant, as the lessor disputed this status a little less than two months after his installation in the premises, did not send him a notice of due date or receipt, returned the security deposit to him, and informed the assignors that they remained co-tenants with respect to him.

Cass. 3e civ., 10 March 1999, LawLex202300014021JBJ.

Cass. com., 17 July 1964, LawLex202300013655JBJ.

CA Basse-Terre, 14 March 2024, LawLex202400002498JBJ, previously.

Cass. 3e civ., 2 October 2002, LawLex202200007803JBJ.

CA Bordeaux, 20 February 2019, LawLex202300013657JBJ.

Cass. com., 19 February 1963, LawLex202300013568JBJ, previously cited; 9 March 1967, LawLex202300013569JBJ; 16 November 2023, LawLex202400001762JBJ, previously cited.

CA Aix-en-Provence, 26 May 1994, No 92/20144.

CA Versailles, 20 December 2006, LawLex202300013564JBJ.

Cass. civ. 3e, 16 November 2023, No 22-17.567.

Cass. 3e civ., 15 June 2011, LawLex202200008149JBJ; 9 May 2019, LawLex202200007811JBJ.

CA Pau, 29 August 1991, No 2911/91. Add: Cass. civ. 3e, 16 November 2023, No 22-17.567, which establishes the principle that the parties to a commercial lease may condition the assignment of the lease right to the purchaser of the business on the prior written consent of the landlord, with the tenant being able to obtain judicial authorization to override an unjustified refusal.

CA Pau, 29 August 1991, No 2911/91, previously cited.

Cass. 3e civ., 9 May 2019, LawLex202200007811JBJ.

Cass. com., 4 January 1994, LawLex202300013658JBJ.

Cass. 3e civ., 16 November 2023, LawLex202400001762JBJ, which specifies that the parties to a commercial lease may condition the transfer of the leasehold right to the purchaser of the business on the prior written consent of the landlord; Paris, 13 February 2019, LawLex202200007790JBJ.

Cass. 3e civ., 15 June 2011, LawLex202200008149JBJ.

CA Versailles, 20 December 2006, LawLex202300013564JBJ, préc.

CA Aix-en-Provence, 26 May 1994, No 92/20144, prec.

CA Pau, 29 August 1991, No 2911/91, previously cited, which orders the lessee, whose lease was retroactively terminated due to the lessor's fault, to pay an occupancy indemnity to the lessor corresponding to the amount of the former rent, for a period between the date of termination of the lease and the actual date of vacating the premises.

Cass. com., 4 January 1994, LawLex202300013658JBJ, previously cited, which holds that the assignee, victim of the fraudulent actions of the assignor and the lessor, who hastened to conclude an amicable termination of the lease to make the assignment impossible, may be compensated, on the basis of the tort liability of the latter, for the damage caused by this fraud.

Cass. com., 18 October 1965, LawLex202300013659JBJ.

Cass. com., 26 January 1966, LawLex202300013631JBJ.

Cass. 3e civ., 10 June 2009, LawLex202200008148JBJ, prec.: in this case, the lessor had refused to give consent to the assignment unless a sum of 14,000 euros was paid for restoring the premises due to the presence of air conditioning, even though this air conditioning had been installed with the lessor's express consent.

Cass. 3e civ., 14 April 1982, LawLex202300013566JBJ.

Cass. 3e civ., 15 June 1994, LawLex202300013634JBJ.

Cass. 3e civ., 15 June 1994, LawLex202300013634JBJ, which holds that the summons to attend the transfer, served at the elected domicile at the landlord's lawyer's office, is valid when the landlord has, prior to this and for the execution of the lease, elected domicile at his lawyer's office.

Cass. 3e civ., 12 January 1968, LawLex202300013632JBJ.

Cass. 3e civ., 25 March 1992, LawLex202300013341JBJ.

Commercial Leases/Business Goodwill

299. Lessor's consent

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299. Lessor's consent

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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