Commercial Leases/Business Goodwill

The security deposit is intended to guarantee the payment of amounts that the lessee may owe to the lessor upon vacating the premises, under their obligations . However, Article L. 145-40 of the Commercial Code, to which it is subject, specifies neither the purpose nor the scope. It is therefore up to the parties to determine, in the lease agreement, the nature of the claims covered by this guaran …

Constitution of advance payment/security deposit

The security deposit is intended to guarantee the payment of amounts that the lessee may owe to the lessor upon vacating the premises, under their obligations . However, Article L. 145-40 of the Commercial Code, to which it is subject, specifies neither the purpose nor the scope. It is therefore up to the parties to determine, in the lease agreement, the nature of the claims covered by this guarantee.

The parties are free to set the amount of the security deposit and to revise it during the lease or upon its renewal, even if it is practically limited to two rental terms. Indeed, Article L. 145-40 of the Commercial Code specifies that “rents paid in advance, in any form whatsoever, and even as a guarantee, bear interest for the benefit of the tenant, at the rate practiced by the Banque de France for advances on securities, for amounts exceeding that which corresponds to the rent price of more than two terms.” To calculate these amounts, the periodicity of the rent and its payment terms must be taken into account. Thus, for a quarterly rent, the landlord can obtain two quarters of a security deposit if the rent is payable in arrears, whereas when it is agreed that the rent is payable at the end of each monthly term, the security deposit cannot exceed two months' rent . Nothing prevents the landlord from requiring a security deposit of more than two terms, but in this case, they must necessarily pay interest to the tenant on the amounts exceeding the set limit, at the rate practiced by the Banque de France for advances on securities. Article L. 145-15 of the Commercial Code gives Article L. 145-40 a public order character. Thus, any clause that prohibits the payment of interest on amounts exceeding two rental terms must be deemed unwritten. However, the provisions of Article L. 145-40 of the Commercial Code do not apply to an amount remaining due by the landlord for the return of the security deposit paid for a lease that has ended .

The parties are free to set the terms for the payment of the security deposit, which may be made in advance or in arrears on a monthly or quarterly basis. The method of payment is also flexible and may take the form of a check, bank transfer, or cash, under the same conditions as for the payment of rent. The Court of Cassation has clarified that a provision in a commercial lease requiring the tenant to pay in advance sums exceeding the rent for more than two terms does not in itself constitute a factor reducing the rental value when it is offset by the lessor's legal obligation to pay the lessee interest at a rate set by law .

Cass. com., 5 February 2008, LawLex202300005005JBJ.

Cass. 3e civ., 6 May 1985, LawLex202300004957JBJ, which quashes the appeal judgment rejecting a claim for interest on sums paid in advance exceeding two months' rent while noting that the rent was stipulated to be payable on a monthly basis.

Cass. 3e civ., 7 May 2014, LawLex202100004794JBJ.

Cass. 3e civ., 7 May 2025, LawLex202500003717JBJ, which holds that a term in a commercial lease providing for the payment of a security deposit equal to six months' rent including all taxes and charges and that the quarterly rent is payable in advance on the first day of the calendar quarter, which resulted in three months' rent being paid to the lessor in advance, does not contravene Article L. 145-40 of the Commercial Code and does not result in a reduction in the rental value.

Commercial Leases/Business Goodwill

144. Constitution of advance payment/security deposit

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144. Constitution of advance payment/security deposit

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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