Commercial Leases/Business Goodwill

Article L. 145-14, para. 1, of the Commercial Code provides the possibility for the lessor to refuse the renewal of the lease on the condition, except for exceptions provided in Articles L. 145-17 and following, of paying the evicted tenant an eviction indemnity  equal to the damage caused by the non-renewal. In other words, and as established by the Court of Cassation, the lessor is free to refus …

Principle of the freedom not to renew

Article L. 145-14, para. 1, of the Commercial Code provides the possibility for the lessor to refuse the renewal of the lease on the condition, except for exceptions provided in Articles L. 145-17 and following, of paying the evicted tenant an eviction indemnity  equal to the damage caused by the non-renewal. In other words, and as established by the Court of Cassation, the lessor is free to refuse the renewal of the lease upon expiration, by paying an eviction indemnity to the lessee, without needing to justify the refusal . The refusal of renewal must come from the lessor or their agent, in their official capacity .

Pursuant to Article L. 145-14, the lessor, who refuses the renewal, cannot avoid the obligation to offer an eviction indemnity, notably by proposing instead a new lease for the same premises except for certain cellars replaced by others . However, the lessor can be exempted if, during the indemnity determination procedure, they invoke reasons for refusal that arose after the notice or were discovered afterwards , provided that they are sufficiently serious . On the other hand, the lessee, to claim this indemnity, must meet the conditions for the right to renewal set out in Articles L. 145-1 and L. 145-8 of the Commercial Code, which establish the conditions for the application of the commercial lease status. Otherwise, the status may be denied to the lessee and justify that a refusal of renewal with eviction indemnity is transformed into a renewal without indemnity .

When the lessee benefits from a single lease covering mixed-use premises, for commercial and residential purposes, the refusal to renew with eviction compensation applies, pursuant to the principle of indivisibility, to the entire property, similar to the right to renewal .

CA Versailles, 4 July 2024, LawLex202400005170JBJ.

Cass. 3e civ., 8 February 2006, LawLex202200002971JBJ.

Cass. 3e civ. 3e, 7 September 2022, LawLex202300011378JBJ, which specifies that the lack of authority of the agent, who acts in his own name and not as an agent of the lessor, constitutes a substantive irregularity affecting the validity of the act without the need for the person invoking it to justify a grievance.

Cass. 3e civ., 1 February 1989, LawLex202300011377JBJ, which quashes the appellate decision on the grounds that the trial court judges cannot declare such an offer “satisfactory in principle.”

CA Paris, 4 July 2012, No 10/16247 – [LawLex…JBJ], who adds that this request can be regularly made as long as a final decision has not been rendered on the right to eviction compensation and does not conflict with the limitation period of Article L. 145-60 of the Commercial Code.

Cass. 3e civ., 17 October 2012, LawLex202300011380JBJ, according to which delays in the payment of some occupancy installments are not of such gravity that they should be sanctioned by the forfeiture of the right to eviction compensation.

Cass. 3e civ., 13 July 1994, LawLex202300009507JBJ.

Cass. 3e civ., 1 October 1997, LawLex202100006506JBJ.

Commercial Leases/Business Goodwill

227. Principle of the freedom not to renew

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227. Principle of the freedom not to renew

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise