Commercial Leases/Business Goodwill

Pursuant to Article R. 145-5 of the Commercial Code, “the purpose of the premises is that authorized by the lease and its amendments or by the court in the cases provided for in Articles L. 145-47 to L. 145-55 and L. 642-7.” In determining the rental value, consideration must be given not only to the activity authorized in the leased premises but also to its scope as contractually agreed by the pa …

Destination of the premises

Pursuant to Article R. 145-5 of the Commercial Code, “the purpose of the premises is that authorized by the lease and its amendments or by the court in the cases provided for in Articles L. 145-47 to L. 145-55 and L. 642-7.” In determining the rental value, consideration must be given not only to the activity authorized in the leased premises but also to its scope as contractually agreed by the parties.

In reality, the rental value may vary depending on whether the tenant has more or less freedom to conduct the business of their choice or modify the nature of their activity . Thus, when the commercial lease provides for an “all businesses” purpose and allows the tenant to transfer their lease rights without the landlord's consent, it results in an increase in the rental value . This is the case when the lease stipulates that the tenant must occupy the premises for retail business use , or when the premises are rented for production or distribution activities and not as a warehouse, even if the tenant has used them as such , with the trial court judges having the sovereign discretion to assess whether the commercial location is of interest for the activity, thereby influencing the rental value . Furthermore, even if a lease clause allows the tenant to engage in any type of activity and to sublet and transfer their lease rights freely, the increase in rental value, although justified, must be limited when the lease terms state that the tenant remains “guarantor and jointly liable with their subtenants or transferees to the landlord for the rent and the performance of the lease conditions” . Conversely, a reduction in rental value should be applied when the lease provides for a restriction of purpose, notably by stipulating the purpose as “sale of handicraft items, as well as the import and sale of Tibetan and Indian clothing,” to the exclusion of all other businesses , or a purpose of the premises “broadly open, granted for all businesses, luxury items, and commercial offices,” which, although broad, is not “all businesses” .

Finally, the Paris Court of Appeal specified that the evolution of the tenant's turnover is irrelevant with regard to the criteria listed in Article L. 145-33 of the Commercial Code, and does not constitute an element in determining the rental value .

CA Bordeaux, 28 May 2008, LawLex202100006203JBJ, for a lease for all businesses other than catering, not limited by the obligation to seek the landlord's authorization to assign the leasehold right, thus justifying an increase.

CA Aix-en-Provence, 10 June 2014, LawLex202300006148JBJ.

CA Orléans, 15 April 2021, LawLex202100006482JBJ: in this case, even if the purpose of the premises is not as broad as an “all businesses” clause, it is nevertheless sufficiently broad since it only excludes wholesale trade, and the possibility of transferring the lease is therefore much greater than if the purpose of the premises were very specific with regard to the activity to be carried out.

CA Angers, 28 September 2021, LawLex202100006004JBJ: in this case, the purpose of the leased premises as provided in the lease was the manufacture, transformation, assembly, repair, and marketing of Parisian articles, fashion accessories, jewelry, gifts, perfumery, leather goods, clothing items, and all mass-market articles.

CA Douai, 9 November 2017, LawLex202300006154JBJ.

CA Orléans, 2 April 2020, LawLex202100006467JBJ.

Paris, 15 November 2017, LawLex202300006149JBJ: in this case, the lease also stipulated that “the lessee may not assign their rights under this lease except in its entirety to a successor in their business.”

CA Douai, 19 April 2018, LawLex202100006243JBJ.

CA Paris, 13 January 2016, LawLex202300006155JBJ.

Commercial Leases/Business Goodwill

153. Destination of the premises

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Les notions juridiques connexes

153. Destination of the premises

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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