Commercial Leases/Business Goodwill

If, under the terms of Article L. 145-38, para. 1, of the Commercial Code, “the request for revision can only be made three years at least after the date of the tenant's entry into possession or after the starting point of the renewed lease,” para. 2 provides that “new requests can be made every three years from the day the new price becomes applicable,” specifying that “the rent revision takes effect from the date of the request for revision” (Art. L. 145-38, para. 1, Commercial Code). The three years must be completed . However, the trial court judges are not required to raise ex officio the inadmissibility based on the premature nature of the request .

Article L. 145-38 distinguishes between a first revision and a subsequent revision. For the first rent revision, the starting point of the three-year period is understood to be the date of entry into possession of the leased premises, as agreed between the parties and stipulated in the lease contract , without considering that the tenant may have taken possession of the premises prior to this date . In the event of a renewal of the commercial lease, the starting point of the three-year period is the effective date of the renewed lease and not its due date, even if the latter is postponed due to the landlord's delay in proposing a new rent . The same rules apply to step leases . For subsequent revisions, the starting point of the three-year period is the effective date of the revised rent . When the parties have conventionally revised the rent through an amendment to the commercial lease, a new revision request can only be made three years after the day the agreed price came into effect . Upon the expiration of the three-year period, the parties are not obliged to revise the rent, as no text imposes a deadline. However, if the revision is delayed, a new three-year period will commence, postponing the next revision.

The provisions of Article L. 145-38 of the Commercial Code apply only to triennial revisions and in no case to the setting of the price of the renewed lease , which is subject to its own legal regime. Therefore, no request for revision can be made in the year of renewal, where the setting of the new rent follows the provisions of Articles L. 145-33 and L. 145-34 of the Commercial Code. In a case where a landlord has regularly given notice to their tenant, declaring readiness to discuss with them the terms of a new lease and a new rent, the Court of Cassation censured the trial court's decision for having decided that the disputed rent should be reduced to a lesser amount, in accordance with the provisions of Article L. 145-38 of the Commercial Code, on the grounds that it is a tacitly renewed lease . However, the right to rent revision is not contingent upon the resolution of the ongoing proceedings related to the setting of the price of the renewed lease , and the request for revision can be introduced even in the absence of the setting of the latter .

Finally, regarding the computation of the three-year period under Article L. 145-38 of the Commercial Code, it is subject to the provisions of Article 641, para. 2, of the Code of Civil Procedure . It follows that the request for revision can only be validly made the day following the expiration date of the three-year period . When the request for revision is made by registered letter with acknowledgment of receipt, the date to be considered is that of the dispatch of the letter, not that of the acknowledgment of receipt .

Cass. 3e civ., 11 June 1985, LawLex202300008000JBJ, which quashes the appeal decision that holds, to declare admissible the request for revision of the price of a commercial lease, that Article L. 145-38 of the Commercial Code does not require the request to be made precisely on the day of the start of the triennial period, and that landlords should be allowed, so as not to be disadvantaged by excessive formalism, to request a rent increase within a reasonable time before the date from which it is due.

Cass. 3e civ., 24 June 1998, LawLex202300008001JBJ.

Cass. 3e civ., 10 November 1982, LawLex202300008016JBJ.

Cass. 3e civ., 25 November 1987, LawLex202300008017JBJ.

Art. 641, para. 2, Code of Civil Procedure: “When a period is expressed in months or years, this period expires on the day of the last month or year that bears the same date as the day of the act, event, decision, or notification that starts the period. In the absence of an identical date, the period expires on the last day of the month.”

Cass. 3e civ., 23 February 1994, LawLex202300008003JBJ.

Cass. 3e civ., 22 April 1980, LawLex202100006360JBJ; 13 February 2002, LawLex202300008013JBJ, which specifies that the two-year limitation period, to which the action for revision of the rent of a commercial lease is subject, only begins to run from the day the letter containing the request for revision is sent. - See Cf. Paris, 2 February 2011, LawLex202300007227JBJ, asserting, in a questionable manner, that it is the date of the registered letter, and not that of dispatch or receipt, that should be taken into account.

Cass. com., 27 December 1960, LawLex202100006358JBJ.

Cass. com., 28 June 1960, LawLex202300008002JBJ.

Cass. 3e civ., 8 September 2016, LawLex202100001390JBJ.

Cass. 3e civ., 14 May 1980, LawLex202100005092JBJ.

Cass. 3e civ., 11 June 1985, LawLex202300008000JBJ, op. cit.

Cass. 3e civ., 21 January 1981, LawLex202100006356JBJ: in this case, the contractual revision occurred less than three years after the tenant's entry into possession through the conclusion, between the parties, of an amendment to the original lease that modified the rent to account for work carried out by the landlord. – Also see Cass. 3e civ., 26 November 1986, LawLex202300008370JBJ, which specifies that when the rent has been contractually re-evaluated by the landlord and the tenant, within the framework of an amendment authorizing the partial subletting of the leased premises, a subsequent request for rent revision is inadmissible since it was made less than three years after the effective date of the previously revised rent.

Cass. 3e civ., 13 June 1973, LawLex202300008014JBJ.

Cass. 3e civ., 8 February 1972, LawLex202300008015JBJ.

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