Commercial Leases/Business Goodwill

Article L. 145-58 of the Commercial Code does not specify the form in which the right of withdrawal must be exercised, so reference must be made to Article L. 145-12, para. 4, of the same code, which provides that “when the lessor has notified, either by a notice or by a refusal to renew, their intention not to renew the lease, and if, subsequently, they decide to renew it, the new lease takes eff …

Form

Article L. 145-58 of the Commercial Code does not specify the form in which the right of withdrawal must be exercised, so reference must be made to Article L. 145-12, para. 4, of the same code, which provides that “when the lessor has notified, either by a notice or by a refusal to renew, their intention not to renew the lease, and if, subsequently, they decide to renew it, the new lease takes effect from the day this acceptance has been notified to the tenant by extrajudicial act or by registered letter with acknowledgment of receipt.” Article R. 145-38 of the Commercial Code specifies that when a party uses a registered letter with acknowledgment of receipt, the date of notification for the sender is the date of dispatch of the letter. If it could not be delivered to its recipient, the procedure must be repeated by extrajudicial act.

However, case law has admitted that the right of withdrawal can be exercised informally as long as the landlord has expressed themselves clearly and unequivocally . This is the case when the landlord signifies their withdrawal from proceedings and action, with an offer to pay the costs of the proceedings for setting an eviction indemnity , or when the request to set the rent is made by the purchaser of the building subject to the lease . Conversely, the absence of payment of the eviction indemnity, as well as the issuance of rent receipts or notices of rent due, and at certain dates, the occupancy indemnity , the issuance of a payment order referring to the termination clause and a request for lease termination , or the proposal of a new lease including a substantial modification of the rent-setting terms , do not characterize the clear and unequivocal intention to renew the lease. Finally, the notice with an offer of renewal, notified subject to the appeal to the Court of Cassation against the decision of a court of appeal, lacking irrevocable character, also cannot validly characterize the landlord's exercise of the right of withdrawal .

Cass. 3e civ., 15 June 2010, LawLex202300011445JBJ: when the lessor has expressly expressed their intention to exercise their right of repentance by a registered letter sent to the lessee, regardless of the wording used, this expression of intent constitutes an irrevocable commitment to renew the lease.

Cass. 3e civ., 25 October 1972, LawLex202300011443JBJ.

Cass. 3e civ., 23 February 1982, LawLex202300011444JBJ: in this case, the original lessor had given notice to the lessee with a refusal to renew and an offer of eviction compensation, before transferring the leased property to the purchaser, who filed a request for rent determination.

Cass. 3e civ., 20 June 1995, LawLex202300011446JBJ.

Cass. 3e civ., 31 January 2012, LawLex202300011447JBJ.

Cass. 3e civ., 12 September 2019, LawLex202300011448JBJ, which quashes the appeal decision that holds, to validate the exercise of the right of repentance, that if the initial lease stipulates a turnover clause, determining the rent based on the tenant's turnover, the landlord's offer to substitute this stipulation with a fixed rent clause in the renewed lease does not affect the validity of the repentance exercised by the landlord.

Cass. 3e civ., 9 March 2011, LawLex202300011449JBJ.

Commercial Leases/Business Goodwill

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