Commercial Leases/Business Goodwill

Upon the expiration of the commercial lease, and provided that the lessee has fulfilled all of their obligations, the lessor is required to return the security deposit to them. The lessee, who is liable for rent until the effective date of the notice, including the notice period, cannot in any case offset the rent with the amounts paid as a guarantee to the lessor . Such compensation would indeed  …

Restitution

Upon the expiration of the commercial lease, and provided that the lessee has fulfilled all of their obligations, the lessor is required to return the security deposit to them. The lessee, who is liable for rent until the effective date of the notice, including the notice period, cannot in any case offset the rent with the amounts paid as a guarantee to the lessor . Such compensation would indeed deprive the latter of the benefit of the guarantee covering potential rental repairs and would distort its purpose. Unless expressly stipulated otherwise, the lessee is entitled to claim the return of the security deposit paid in execution of their lease contract, even if the funds were advanced by a third party . The lessee's guarantor, even if jointly liable, may, pursuant to the principle set out in Article 2313, para. 1, of the Civil Code, relating to the enforceability of exceptions belonging to the principal debtor, oppose to the lessor the exception of compensation between the amounts due and the security deposit, and claim the return of the amounts paid as a guarantee .

In the event of the transfer of the property or rights to the property, the return of the security deposit always falls to the original lessor. However, it is transferred to their heirs as universal successors, but not to their particular legatee successor . In the case of the return of sums paid as a guarantee following the nullity of a commercial lease, which does not in itself constitute compensable damage, it has been considered that the notary, as a subsidiary guarantor of the return to the only party that is the creditor, in the event of proven default by the debtor, cannot be condemned to guarantee the lessor, even if the latter is insolvent . In the event of the sale of the leased premises, the purchaser does not substitute the seller in the return of the security deposit, which falls to the original lessor , unless this obligation has been transferred to the assignee . However, nothing prevents the lessee from requesting the return of the sums paid as a guarantee from the original lessor since, not being a party to the sale, any clause relating to the transfer of the security deposit to the new owner is not enforceable against them . This solution is based on Article 1327 of the Civil Code, in its version resulting from Ordinance No 2016-131 , according to which “a debtor may, with the creditor's consent, assign their debt.” Unless the original lessor has returned the security deposit, the purchaser of a leased building, who is substituted for the initial lessor for all the clauses of the lease contract and its accessories, cannot have more rights than the seller and claim a new security deposit from the lessee . When a third-party company, under a management mandate given by a previous owner, has received sums as a security deposit, this company does not have to pay them to the purchaser of the leased property but remains accountable to the lessee .

In the event of the transfer of the commercial lease right, the landlord is required to return the security deposit to the transferring tenant . Conversely, the assignee tenant is responsible for reconstituting this same security under the conditions of the assigned lease .

The security deposit can only be returned upon the vacating of the leased premises, which means the handing over of the keys by the tenant directly to the landlord or their representative . In the case of multiple tenants, a landlord is not required to return a departing co-tenant's share of the security deposit. Indeed, since the purpose of such a deposit is to guarantee the tenant's performance of their obligations, its reimbursement requires the actual return of the premises . It is important to note that while, in residential leases, Law No 89-462 of 6 July 1989  imposes a maximum period of two months to return the security deposit, no such period exists in commercial matters.

The lessor, being obliged to return the security deposit to the lessee at the expiration of the lease, cannot, however, abusively retain the amounts paid as a guarantee. Therefore, they are required to return these amounts as soon as, upon the exit inspection, regardless of the circumstances under which the keys were returned, they have regained free use of the premises and have been able to relet to another tenant . If applicable, a certain amount may be deducted from the security deposit for damages attributable to the lessee , which cannot be determined by the judge on a lump-sum basis .

The parties may arrange the return of the security deposit and conventionally stipulate that the amounts paid will remain with the landlord as damages in the event of lease termination. Thus, a tenant cannot obtain a refund of their security deposit when they have agreed, by private agreement, to purchase the property when the landlord wishes to sell, with the deposit becoming a down payment on the sale and remaining the property of the latter “in case of refusal or departure of the tenant,” and when the tenant, who has transferred their business, has left  or when it has been stipulated that the security deposit would remain with the landlord as initial damages without prejudice to any others if the lease was terminated for non-compliance with conditions or any other cause attributable to the tenant, and the lease was terminated at the tenant's fault due to their early departure from the premises, deemed a serious breach of their obligations . Conversely, trial judges cannot decide that the amount paid by a tenant as a guarantee must remain with the landlord, while the lease only provided for this scenario if the benefit of the termination clause was declared acquired by the owners and the ruling does not pronounce the termination of the lease but merely declares the reasons for the landlord's refusal to renew as serious and legitimate . In any case, the lease clause, which provides that the security deposit will remain with the landlord in the event of lease termination for any reason originating from the tenant other than a duly given notice, does not constitute a penalty clause .

Cass. 3e civ., 5 October 1999, LawLex202300004958JBJ, which quashes the appeal decision that holds, to reject the lessor's claim for payment of rent, that since the lessee did not pay the rent for the two months preceding the effective date of the notice, the amount of the security deposit paid by him covers the amount due.

Cass. 3e civ., 7 April 2010, LawLex202300004959JBJ, regarding a residential lease.

Cass. 1re civ., 10 March 1998, LawLex202300005003JBJ.

Cass. com., 5 February 2008, LawLex202300005005JBJ.

Cass. com., 16 September 2008, LawLex202300002527JBJ.

Cass. 3e civ., 5 November 2003, LawLex202100004626JBJ.

Law No 89-462 of 6 July 1989 aimed at improving rental relations and amending Law No 86-1290 of 23 December 1986, Art. 22, paras. 3 and 4.

Cass. 3e civ., 19 December 2000, LawLex202300005007JBJ.

Cass. 3e civ., 25 June 1969, LawLex202300000759JBJ, for damage occurring between the lease expiration date and the return of the keys.

Cass. 3e civ., 26 June 2007, LawLex202300005009JBJ.

Cass. 3e civ., 22 February 1994, LawLex202300005011JBJ.

Cass. com., 17 July 2001, LawLex202300005004JBJ.

Cass. 3e civ., 5 February 2003, LawLex202300005012JBJ.

Cass. 3e civ., 13 March 1974, LawLex202300005010JBJ.

Cass. 3e civ., 7 November 2001, LawLex202300005013JBJ: in this case, the lessee not providing proof of one of the exonerating causes provided for by Article 1733 of the Civil Code and thus being presumed responsible for the fire that occurred in the leased premises, the disputed clause must apply.

Cass. 3e civ., 25 February 2004, LawLex202300004960JBJ. This solution is no longer applicable to residential or mixed leases since Law No 2009-323 of 25 March 2009 on mobilization for housing and the fight against exclusion, whose Article 103 amended Article 22 of Law No 89-462 of 6 July 1989 aimed at improving rental relations, which now provides, in its last paragraph, that “in the event of a gratuitous or onerous transfer of the rented premises, the return of the security deposit is the responsibility of the new lessor.”

Cass. 1re civ., 28 October 2015, LawLex202300004962JBJ.

Cass. 3e civ., 28 June 2018, LawLex202300004963JBJ, which quashes the appeal decision holding that the purchaser of the premises substituted the seller in all the clauses and conditions of the lease and its accessories, including the one providing for the return of the security deposit to the lessee at the end of the term, whereas in the event of the sale of premises leased under a commercial lease, the return of the security deposit is the responsibility of the original lessor and is not transferred to their particular successor.

Cass. 3e civ., 30 January 1979, LawLex202300004964JBJ, which quashes the appeal decision that holds that the obligation of reimbursement was transferred from owner to owner without determining whether this obligation had been imposed on the purchaser.

Cass. 3e civ., 18 January 1983, LawLex202300004965JBJ.

Order No 2016-131 of 10 February 2016 on the reform of contract law, the general regime, and proof of obligations, Art. 3.

Cass. 3e civ., 26 March 2014, LawLex202300004966JBJ.

Commercial Leases/Business Goodwill

145. Restitution

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Les notions juridiques connexes

145. Restitution

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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