Commercial Leases/Business Goodwill

Under the terms of Article L. 145-8 of the Commercial Code, the right to renew the lease can only be invoked by the owner of the business operated on the leased premises. The right to renewal is of public order, and clauses, stipulations, and arrangements that have the effect of defeating it are deemed unwritten by Article L. 145-15 of the Commercial Code. The text, in its version resulting from L …

Right to renewal

Under the terms of Article L. 145-8 of the Commercial Code, the right to renew the lease can only be invoked by the owner of the business operated on the leased premises. The right to renewal is of public order, and clauses, stipulations, and arrangements that have the effect of defeating it are deemed unwritten by Article L. 145-15 of the Commercial Code. The text, in its version resulting from Law No 2014-626 of 18 June 2014 , which replaced the nullity of clauses, stipulations, and arrangements having the effect of defeating the right to renewal established by Chapter IV of the same code with their being deemed unwritten, is applicable to leases in progress at the time of the entry into force of this law .

If the right to renewal is acquired upon the conclusion of the lease by the sole effect of the law, the public policy of protection, which is attached to the status of commercial leases, does not prevent a freely consented waiver, if it occurs after the right to renewal has arisen . When a lessee has validly waived their right to renewal, the lease terminates automatically at the fixed term, without the lessor having to notify any notice . However, the lessee's waiver can only result from acts that unequivocally demonstrate their intention to waive, with full knowledge of the facts , provided that it has been freely consented to .

Article L. 145-15 of the Commercial Code deems unwritten any clauses waiving the right to renewal inserted in the commercial lease at the time of its conclusion. This applies to the clause included in the initial lease stipulating that the lessee cannot assert their right to renewal , or any arrangement intended to defeat it, which appears in a separate document from the lease but is concurrent with its signing , the fact that the lease's effective date was postponed to a date after the waiver being irrelevant . Certain clauses are also deemed unwritten, which, without being true waiver clauses of the right to renew the lease, greatly limit the principle. This is the case for the clause requiring the lessee to restore the premises to their original condition  or the one specifying that at the end of the lease, the land would be returned bare and leveled and that the owner would remain uninvolved with the rentals made by the tenant . However, the lease clause that only authorizes light and removable constructions “to the exclusion of all others,” which must be removed at the end of the lease at the lessee's expense, must be executed, as the constructions thus authorized cannot confer any right of lease renewal to the lessee .

Clauses must also be deemed unwritten, such as the clause that requires personal operation of the business by the lessee during the last three years, which results in the impossibility of transferring the lease during this period , or the clause that confines the lessee's right to request renewal within a fixed period and exempts the lessor from paying eviction compensation if this period is not respected , as it has the effect of hindering or limiting the right to lease renewal. However, the lease clause that determines the lessee's obligations without obstructing the continuation of the business under the same conditions, by the lessee or their successor, beyond the term provided for the lease does not affect this right . Similarly, the clause that establishes a right of first refusal in favor of the lessor, in the event of a transfer of the lease or the business, is valid as long as no text prohibits the inclusion of such a clause and the lease concluded between the parties does not infringe any of the rights that the provisions relating to the status of commercial leases grant to the lessee, who is free to sell their business under the conditions they have accepted , including their right to renewal.

The methods for calculating the eviction indemnity, when they do not deprive the evicted tenant of compensation in the event of non-renewal of the lease or set a fixed amount in advance for compensation and, consequently, do not directly or indirectly limit the right to renewal, are not contrary to public policy . This is the case with a clause that evaluates the eviction indemnity in advance at a fixed amount  or with a commitment made at the same time as the lease, by which the tenant waives all rights to compensation upon the expiration of the rental contract, this commitment having the effect of preventing renewal .

Certain contractual arrangements do not, however, prevent the right to renew the lease agreement. Thus, the parties are free to agree on an extension rather than a renewal, which is the case when they have clearly expressed their intention by inserting a clause in the contract stating that “the lease extension resulting from these presents shall be one and the same with the extended lease” . The right to renewal does not further prohibit the lessor from amicably obtaining the early departure of the lessee .

The implementation of the right to renew the lease is subject to certain conditions listed in Article L. 145-1 of the Commercial Code, which relate to the existence of a lease concerning a premises or building, the operation of a commercial or artisanal business in the leased premises, and the registration of the business owner in the trade and companies register or the national business register. Since the repeal of Article L. 145-13 of the Commercial Code by Law No 2014-626 of 18 June 2014 , French nationality is no longer a condition for the right to renewal. The business, which must necessarily be owned by the lessee, must, “except for legitimate reasons, have been effectively operated during the three years preceding the lease expiration date” (Art. L. 145-8 Commercial Code). It is up to the lessee, who claims to benefit from the status of commercial leases, to prove that they meet these cumulative conditions .

Act No 2014-626 of 18 June 2014 on Craftsmanship, Commerce, and Very Small Enterprises, OJ of 19 June 2014, Art. 6.

Cass. 3e civ., 21 April 2022, LawLex202200005202JBJ.

Cass. com., 29 November 1961, LawLex202300010099JBJ: in this case, the authorization given to the lessee of a bare leased land to carry out constructions and sublet them included an authorization to sublet the land.

Cass. com., 21 June 1966, LawLex202300010112JBJ.

Cass. 3e civ., 23 July 1986, LawLex202200007807JBJ, Bull. civ. III, No 131.

Cass. 3e civ., 23 January 2008, LawLex202300010113JBJ.

Cass. 3e civ., 22 July 1987, LawLex202300010114JBJ.

Cass. 3e civ., 12 July 2000, LawLex202200008143JBJ.

Cass. 3e civ., 18 January 2023, LawLex202300009130JBJ.

CA Chambéry, 22 September 2020, LawLex202300010125JBJ.

Cass. 3e civ., 7 October 1987, LawLex202100001332JBJ.

Cass. 3e civ., 26 October 1977, LawLex202300010182JBJ.

Cass. 3e civ., 4 May 2006, LawLex202300010094JBJ.

Cass. 3e civ., 18 May 1994, LawLex202300010183JBJ.

Act No 2014-626 of 18 June 2014 on Craftsmanship, Commerce, and Very Small Enterprises, OJ of 19 June 2014, Art. 5.

Cass. 3e civ., 18 October 1972, LawLex202300010184JBJ.

Cass. 3e civ., 8 April 2010, LawLex202300010098JBJ.

Cass. 3e civ., 15 April 1992, LawLex202100002990JBJ, Bull. civ. III, No 129; RTD com. 1993, 633, note PEDAMON; RDI 1992, 381, note BRIERE DE L'ISLE and DERRUPPE; JCP E 1993, I, 253, note MONEGER; Administrer Oct. 1992, 77, note BARBIER. – Also see Cass. civ. 3e, 13 June 2007, LawLex202300010083JBJ.

Cass. 3e civ., 17 October 2007, LawLex202300010095JBJ.

Cass. 3e civ., 25 February 1976, LawLex202300010096JBJ.

Cass. 3e civ., 30 November 1988, LawLex202300010097JBJ, which quashes the appeal judgment that holds, to dismiss the tenant's claim for annulment of the notice, that both parties acknowledge that the notice, which was postdated, was actually drafted on the same day or the day after the lease was signed, that the two operations are closely linked, and that the tenant does not prove the defect in consent he implicitly alleges, while noting that the arrangement intended to thwart his right to renew the lease was concurrent with its signing.

Cass. 3e civ., 4 May 2006, LawLex202300010094JBJ, prec.: in this case, the parties concluded the sublease by notarial act on 29 January 1990, which took effect from 1 April 1990, and by act of 31 March 1990, the subtenant expressly waived the commercial property rights both towards the principal tenant and the owner.

CA Bastia, 8 December 2010, LawLex202300010124JBJ.

Commercial Leases/Business Goodwill

208. Right to renewal

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208. Right to renewal

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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