Commercial Leases/Business Goodwill

Article L. 145-17, I, 1° of the Commercial Code authorizes the landlord to refuse the renewal of the lease without being liable for any compensation if they justify a serious and legitimate reason against the outgoing tenant. The text does not define the notion of a serious and legitimate reason. The reason invoked by the landlord does not necessarily have to be specific to the status of commercia …

Reasons

Article L. 145-17, I, 1° of the Commercial Code authorizes the landlord to refuse the renewal of the lease without being liable for any compensation if they justify a serious and legitimate reason against the outgoing tenant. The text does not define the notion of a serious and legitimate reason. The reason invoked by the landlord does not necessarily have to be specific to the status of commercial leases  or related to the performance of the lease . Indeed, case law admits that the landlord may rely on a non-contractual fault as long as it has a sufficient connection with the performance of the lease . It also does not seem to require that the landlord justify the existence of damage .

A serious and legitimate reason for refusing renewal may be constituted by a fault attributable to the lessee but also to the persons for whom they are responsible . In the case of co-leasing, the criminal actions of one of the lessees constitute, against their co-lessees, a serious and legitimate reason for refusing eviction compensation as long as the latter are responsible to the lessor for lawful commercial operation . The lessor can only invoke facts attributable to the outgoing tenant themselves. Thus, in the event of the assignment of the lease right, the lessor cannot oppose these reasons to the assignee, who is entitled to the payment of eviction compensation due to the refusal opposed by the lessor in response to their renewal request .

The lessor, who refuses renewal for a serious and legitimate reason, must justify their refusal (Art. L. 145-9, para. 5 and Art. L. 145-10, para. 4 Commercial Code). While they cannot, during the proceedings, modify the reasons for refusal indicated in their notice , they may, however, in any case, deny the lessee the benefit of the status of commercial leases . However, there are two exceptions to this principle. On the one hand, the lessor may invoke against the lessee violations revealed after the expiration of the lease . It is then up to the trial court to determine whether the alleged breaches were known to the lessor at the time of issuing the notice with refusal of renewal . In particular, the fact that the lessor and the principal tenant did not invoke the reason during their refusal to renew the sublease contract while offering eviction compensation does not prevent them from invoking the subtenant's breach of their contractual obligations, provided that this breach, although contemporaneous with the refusal to renew the contract, was unknown to the lessor and the principal lessee at

If the lessor can waive the right to invoke the refusal of renewal for a serious and legitimate reason, they must express it clearly and unequivocally. The waiver may result from a clear and precise clause inserted in the lease, stipulating that the lessee will benefit from the “commercial property,” even if they do not personally occupy all or part of the premises, and that the owner hereby waives the right to refuse the renewal of the lease on the grounds that the lessee has not occupied the premises . However, the conclusion of two rent revision amendments and the consent to the renewal of the lease concerning irregularly subleased premises does not constitute an act unequivocally manifesting the lessor's intention to waive the provisions of Article L. 145-31 of the Commercial Code .

The burden of proof for the existence of the serious and legitimate reason invoked by the landlord to support their refusal to renew the lease lies with them , while the trial court must independently assess  the seriousness of the alleged reasons . If a single reason, provided it is sufficiently serious, can justify the non-renewal of the lease, the judges may assess the seriousness of several reasons, even when considered together . When they are seized of a case concerning the refusal to renew a lease, they are not bound by the assessment made in decisions with a different subject regarding the importance and seriousness of the tenant's breaches of the lease, and may therefore determine that these same breaches are sufficiently serious to justify a refusal to renew the lease . The refusal to renew and the termination may be based on facts of the same nature . Indeed, the action for refusal to renew the lease does not have the same object as the action for termination, and the judges ruling on this refusal are not bound by the res judicata effect resulting from a previous termination procedure . The trial court must consider the date of the refusal to renew to assess the seriousness of the reasons alleged by the landlord , and not the date on which they rule .

Finally, the absence of serious and legitimate grounds can only result in the payment of eviction compensation and, in no case, in the nullity of the notice and the renewal of the lease . This is the case when the serious and legitimate ground invoked by the lessor results from a breach of his obligations .

Cass. 3e civ., 24 January 1996, LawLex202300011857JBJ.

Cass. 3e civ., 29 June 1977, LawLex202300011858JBJ, according to which the lessor may rely on facts attributable to the manager of the tenant company that it introduced into the leased premises and who represents it.

Cass. 3e civ., 1 March 1995, LawLex202300011865JBJ, which overturns the decision that held, to decide that the refusal to renew the lease without eviction compensation is not justified and that the lessee is entitled to eviction compensation, that only the reasons stated in the notice should be examined and that other complaints made by the lessor after this act cannot be considered.

Cass. 3e civ., 20 June 1990, LawLex202200000714JBJ.

Cass. 3e civ., 29 November 1995, LawLex202300011867JBJ.

Cass. 3e civ., 1 February 1995, LawLex202300011868JBJ CA Versailles, 4 July 2024, LawLex202400005170JBJ, which specifies that the lessor must justify the seriousness and persistence of the reason.

Cass. 3e civ., 11 October 1972, LawLex202300011869JBJ.

Cass. 3e civ., 1 April 1998, LawLex202300011870JBJ, which approves the trial court for having sovereignly assessed that the breaches committed by the lessee, by engaging in unauthorized complementary activities, are not, in the circumstances of the case, sufficiently serious to deprive the tenant of the right to renewal.

Cass. 3e civ., 14 June 1995, LawLex202300011871JBJ, which approves the trial court for having sovereignly held that, even when considered as a whole, the tenant's breaches of the lease clauses do not constitute a serious and legitimate reason for refusing the renewal of the lease without payment of an eviction indemnity.

Cass. com., 20 January 1965, LawLex202300011872JBJ, which considers that the trial court judges merely exercised their sovereign power of assessment when, after noting that, subsequent to the notice given by the landlords, the tenants reoffended by erecting new prohibited constructions, they decided that the landlords were still entitled to invoke the successive changes made to the establishment's signage, whereas under the terms of the lease, the name of the café-restaurant of the business was to be retained.

Cass. 3e civ., 18 November 1980, LawLex202300011873JBJ.

Cass. civ. 3e, 5 October 1994, LawLex202300011874JBJ, which quashes the decision that holds, to decide that the lessee or the purchaser of their business is entitled to the renewal of the lease, that the proceedings aimed at ruling on the continuation of the same lease and the action, involving the same parties as those in a previous decision, based on the lack of effective operation of the business which was the basis for the previous lease termination proceedings, that the lessee is justified in raising the plea of res judicata.

Cass. com., 14 February 1961, LawLex202300011861JBJ, according to which the actions of the tenant's spouse, who was constantly frequenting the common passages of the two closely adjacent dwellings, created an atmosphere of constant and profound discomfort, making it intolerable for the tenant couple to remain in the premises, and justifies the refusal to renew the lease for a serious and legitimate reason as this disturbance is linked to the lease granted to the tenant; Cass. com., 10 October 1961, LawLex202300011862JBJ: in this case, the violence invoked by the landlord was committed by an employee of the tenant during a rental incident that occurred inside the building to which the rented premises belong.

Cass. 3e civ., 18 December 1961, LawLex202300011875JBJ.

Cass. 3e civ., 3 June 1992, LawLex202300011876JBJ.

CA Versailles, 4 July 2024, LawLex202400005170JBJ, op. cit.

Paris, 28 March 2024, LawLex202400002881JBJ, which considers that the failure to operate the business by the lessee cannot be analyzed as a serious and legitimate reason for depriving the eviction indemnity, as it results from the lessor's breach of the obligation to deliver, which makes such operation impossible.

Cass. 3e civ., 22 May 1979, LawLex202300011853JBJ.

Cass. 3e civ., 11 June 2008, LawLex202300011859JBJ.

Cass. 3e civ., 4 January 1985, LawLex202300011860JBJ.

Cass. 3e civ., 15 September 2010, LawLex202300011899JBJ, which quashes the decision holding that the assignment of a contract placing the assignee in the position of the assignor, the former could not acquire and claim more rights than the latter had, that the serious breaches committed by the latter, consisting of non-payment and late payment of rent, are enforceable against the assignee, who was aware, at the date of the assignment, of the delivery of the notice, that these breaches constitute a serious and legitimate reason justifying the refusal of renewal without payment of eviction compensation.

Cass. 3e civ., 19 May 1971, LawLex202300011863JBJ, which quashes the decision that holds, to dismiss the tenant's claim for eviction compensation, that he committed lease violations justifying the landlord's termination of the lease, without addressing the tenant's arguments that the reasons given by the owner for refusing the payment of eviction compensation differ from those stated in the notice.

Cass. 3e civ., 19 May 1971, LawLex202300011863JBJ.

Commercial Leases/Business Goodwill

235. Reasons

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235. Reasons

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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