Commercial Leases/Business Goodwill

Under the terms of Article R. 145-23, para. 1, of the Commercial Code, “disputes relating to the setting of the rent for the revised or renewed lease are brought, regardless of the amount of the rent, before the president of the Judicial Court or the judge who replaces him” . In the event of disagreement between the parties, the president of the Judicial Court, also known as the commercial rent ju …

Jurisdiction of the President of the Judicial Court

Under the terms of Article R. 145-23, para. 1, of the Commercial Code, “disputes relating to the setting of the rent for the revised or renewed lease are brought, regardless of the amount of the rent, before the president of the Judicial Court or the judge who replaces him” . In the event of disagreement between the parties, the president of the Judicial Court, also known as the commercial rent judge, is competent to set the rent for the renewed or revised lease , including in the application of an escalation clause. However, it is not within the jurisdiction of the commercial rent judge, but rather that of the parties, to determine the schedule of rents that will be due during the period in which the spreading of the rent increase established by Article L. 145-34 of the Commercial Code applies . In case of a dispute over the terms of this schedule, only the Judicial Court is competent to rule on the matter (Art. R. 145-23, para. 2, Commercial Code).

Pursuant to Article L. 145-31, para. 3, of the Commercial Code, the president of the Judicial Court may, in the absence of an agreement between the parties, set the rent for the sublease when it exceeds the price of the main lease, with the landlord having the option to demand a corresponding increase in the rent of the main lease. However, the request for a rent increase due to the existence of a sublease is distinct from the dispute regarding the setting of the price of the renewed lease brought by a tenant before the commercial rent judge, and can only be validly made by the landlord by notifying a memorandum, then referring the matter to the rent judge under the conditions provided by law .

In the event of a change of use and when the dispute concerns only the rent of the lease, Article L. 145-52, para. 2, of the Commercial Code specifies that it is set by the president of the Judicial Court “in accordance with the regulatory provisions provided for the setting of the rent of revised leases.”

The commercial rent judge, who has exclusive jurisdiction to set the rent price, is the judge of the admissibility and regularity of the procedure, which he is seized of, and has the power to rule on the prescription of the action introduced . The Court of Cassation considers that the argument, according to which one of the parties to a commercial lease opposes a request to set the rent price of the renewed lease at the rental value on the grounds that the parties have agreed on a rent including a variable part, without providing for recourse to the commercial rent judge to set the fixed part or the minimum guaranteed at the rental value, is analyzed as a defense on the merits and not as a plea of inadmissibility, so that the commercial rent judge cannot declare such a request inadmissible but must examine it on the merits . However, as it is a matter of exceptional jurisdiction, the president of the Judicial Court must stay proceedings when he is seized of an action to set the rent price and a dispute, which has an impact on it, has arisen during the proceedings but does not fall within his jurisdiction. This dispute must, in this case, be referred to the Judicial Court. He cannot pronounce a condemnation .

From then on, the commercial lease judge is not competent to rule on:

- the very principle of the right to renew the commercial lease , as well as its validity ;

- a request seeking a ruling that the estimation of the rental value, carried out by the technician designated by mutual agreement, is binding on the lessee ;

- the setting of the renewed rent of a lease with a binary rent , unless the contract provides for recourse to the commercial rent judge ;

- a request to modify the rent amount stipulated in the lease due to an error in the area .

See also Article R. 213-2, 1° COJ, which provides that “the president of the Judicial Court has jurisdiction over disputes relating to the determination of the price of commercial leases in the cases and conditions provided for by Article R. 145-23 of the Commercial Code.”

Cass. 3e civ., 13 October 2010, LawLex202300014665JBJ.

Cass. 3e civ., 12 May 2016, LawLex202400000090JBJ: when the parties have freely agreed on each component of the rent, consisting of a fixed part and a variable part based on a percentage of the tenant's gross operating income, these forming an indivisible whole, the setting of the renewed rent of a lease stipulating such a clause is governed only by the agreement of the parties and is not subject to the provisions governing the status of commercial leases.

Cass. 3e civ., 29 November 2018, LawLex202100004758JBJ: the stipulation that the rent of a commercial lease is calculated based on the tenant's turnover, without being less than a minimum equivalent to the rental value of the leased premises, does not prohibit, when the contract provides for it, resorting to the commercial rent judge to assess, upon renewal, the rental value determining the guaranteed minimum.

CA Paris, 19 February 2009, LawLex202400000094JBJ.

Cass. 3e civ., 7 July 2016, LawLex202400000091JBJ.

Cass. civ., opinion, 9 March 2018, LawLex202300011339JBJ. – Also see Cass. 3e civ., 25 January 2023, LawLex202300001547JBJ, according to which the provision of the last paragraph of Article L. 145-34 of the Commercial Code, which only establishes, in the cases it determines, a spreading of the rent increase resulting from the removal of the cap, without affecting the setting of the rent at the rental value, being distinct from that of the setting of the rent, does not fall within the jurisdiction of the commercial lease judge to rule on its application and a court of appeal, seized of the appeal of a judgment of the commercial lease judge, can only rule within the limits of the powers of the latter.

Cass. 3e civ., 7 February 2007, LawLex202300012906JBJ.

CA Grenoble, 24 September 2015, LawLex202400000087JBJ.

Cass. 3e civ., 30 May 2024, LawLex202400003941JBJ, according to which, even in the absence of an express clause for recourse to the commercial rent judge, it is up to the latter, when seized of the substantive defense, to seek this contrary common intent, either in the contract or in extrinsic elements.

Cass. 3e civ., 11 May 2022, LawLex202200004357JBJ: jurisdiction is limited to the judicial determination of the rent and the settlement of the parties' account.

Cass. com., 18 July 1966, LawLex202400000056JBJ: in this case, the lessor argued the inapplicability of the status of commercial leases due in particular to the absence of a location, the precariousness of the concession, and the non-ancillary nature of the disputed display window.

CA Colmar, 19 June 2024, LawLex202400004828JBJ, which specifies that the commercial rent judge cannot, without exceeding their material jurisdiction, assess the quality of the arguments developed regarding the validity of the tenant's option right to make a decision.

Cass. 3e civ., 5 February 1997, LawLex202400000089JBJ.

Commercial Leases/Business Goodwill

339. Jurisdiction of the President of the Judicial Court

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339. Jurisdiction of the President of the Judicial Court

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