Commercial Leases/Business Goodwill

The irregularity of the sublease allows the property owner to challenge the main lease: they can seek termination of the main lease or refuse its renewal without being liable for the payment of eviction compensation.
1) Termination
The conclusion of a sublease without the authorization of the owner of the commercial premises or without their participation in the act constitutes, de facto, a breach …

Relations between the landlord and the principal tenant

The irregularity of the sublease allows the property owner to challenge the main lease: they can seek termination of the main lease or refuse its renewal without being liable for the payment of eviction compensation.

The conclusion of a sublease without the authorization of the owner of the commercial premises or without their participation in the act constitutes, de facto, a breach of the provisions of the status , but also a contractual breach , when a clause in the main lease expressly requires compliance with certain formalities to conclude the sublease, limits the right to sublease, or sanctions the sublease by termination.

The lessor has, pursuant to Articles 1224 and 1227 of the Civil Code, the option to request the judicial termination of the sublease contract . In this case, it is up to the trial court to independently assess the seriousness of the breach to determine whether the termination of the lease should be immediately pronounced or if the awarding of damages is sufficient . When the sublease has been granted in violation of a resolutory clause prohibiting subleasing, the lessor may request the judges to acknowledge the automatic termination provided for by Article L. 145-41 of the Commercial Code, without them having to assess the seriousness of the infraction .

2) Refusal to Renew the Principal Lease Without Eviction Compensation

The conclusion of a sublease contract in violation of Article L. 145-31 of the Commercial Code may constitute the serious and legitimate reason that allows the lessor to refuse the tenant the renewal of the main lease, without being obliged to pay eviction compensation (Article L. 145-17, I, 1° Commercial Code) . The judges have sovereign power of assessment regarding the seriousness of the breach , without having to determine, however, whether material damage results for the lessor .

In principle, when the reason for non-renewal is based on a serious or legitimate reason, Article L. 145-17, I, 1° of the Commercial Code specifies that it can only be invoked if the committed infraction continued or was repeated more than one month after the landlord's formal notice to cease it. However, since the formality of the landlord's call to participate in the sublease act constitutes an instantaneous act that can neither continue nor be repeated , the prior formal notice before the notice of termination with refusal of renewal without eviction compensation is not required.

Cass. 3e civ., 6 October 2016, LawLex202200010101JBJ.

Cass. 3e civ., 15 January 1962, LawLex202300012669JBJ.

CA Paris, 5 June 2008, LawLex202200010111JBJ.

Cass. 3e civ., 16 January 1970, LawLex202300012691JBJ; 12 March 2002, LawLex202300012668JBJ; 7 July 2016, LawLex202200009894JBJ; CA Paris, 26 February 2020, LawLex202200010109JBJ. - Contra: Cass. com. 15 February 1961, LawLex202300012256JBJ, refusing termination.

Cass. com., 16 December 1964, LawLex202300012261JBJ.

Cass. 3e civ., 20 December 1976, LawLex202100001297JBJ; 13 March 1991, LawLex202300012671JBJ; 5 January 2010, LawLex202200010442JBJ.

Cass. 3e civ., 2 November 1982, LawLex202300011889JBJ; 12 March 2002, LawLex202300012668JBJ; 9 July 2003, LawLex202300011887JBJ.

Commercial Leases/Business Goodwill

330. Relations between the landlord and the principal tenant

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Les notions juridiques connexes

330. Relations between the landlord and the principal tenant

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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