Commercial Leases/Business Goodwill

Under the terms of Article L. 145-5, para. 3, of the Commercial Code, a new lease subject to the status of commercial leases is formed “at the expiration of this period, in the event of express renewal of the lease or conclusion, between the same parties, of a new lease for the same premises.” Law No 2008-776 of 4 August 2008, known as the “LME,” amended Article L. 145-5 of the Commercial Code, no …

Renewal or conclusion of a new lease

Under the terms of Article L. 145-5, para. 3, of the Commercial Code, a new lease subject to the status of commercial leases is formed “at the expiration of this period, in the event of express renewal of the lease or conclusion, between the same parties, of a new lease for the same premises.” Law No 2008-776 of 4 August 2008, known as the “LME,” amended Article L. 145-5 of the Commercial Code, notably its first paragraph, by allowing the conclusion of several successive short-term leases , within the legally authorized limit. The Pinel Law, which extended this maximum period to three years, supplemented this paragraph by adding that “at the expiration of this period, the parties can no longer conclude a new lease derogating [from the status] to operate the same business in the same premises” .

If it is possible, during this three-year period, to renew derogatory leases or to conclude new ones, this is no longer the case beyond this legal duration , as the protective mechanism of commercial leases then automatically applies to the renewed lease or the new lease concluded between the parties for the same premises . However, there is an exception to this principle concerning the scenario where, after the three-year period, consecutive derogatory leases involve different parties or pertain to different premises. Thus, the lessee does not benefit from the status of commercial leases when the new lease concerns different premises or premises of a different nature from those covered by the derogatory lease , with the second lease replacing the previous one, which is terminated by the will of the parties . The same applies when the lessor concludes a second derogatory lease with a different lessee, provided that no fraud is characterized  intended to thwart the application of statutory rules. In particular, fraud is characterized in the case of a succession of short-term derogatory leases granted alternately to the lessee and to third parties acting as nominees, while the lessee remained in possession of the premises, paid the rent, taxes, electricity, insurance, and was registered in the trade directory and then in the trade and companies register , the fraud preventing the lessor from claiming that the lessee had validly waived an acquired right . Conversely, evidence of fraud is not provided when, upon expiration of the derogatory lease, the lessee returns the keys to the lessor and vacates the rented premises, before concluding, a few days later, a second contract opting for the derogatory regime in accordance with Article L. 145-5 of the Commercial Code .

Finally, before the adoption of Law No 2014-626 of 18 June 2014, the lessee could waive the status of commercial leases at the end of the maximum legal period allowed, if and only if they had acquired this right . The waiver necessarily had to occur after the expiration date of the derogatory lease , effectively excluding any waiver clause inserted in the initial lease, as well as any waiver occurring during the lease . Furthermore, the waiver could only result from a will expressed unequivocally and with full knowledge , the insertion of an express waiver clause in a subsequent derogatory lease being sufficient . Finally, the Court of Cassation, in a decision of 22 October 2020 , put an end to this case law: it now considers that, to derogate from the provisions of the status of commercial leases, the lease concluded after the entry into force of the new Article L. 145-5 of the Commercial Code, resulting from Law No 2014-626 of 18 June 2014, must meet the requirements of this text and, consequently, not have a duration combined with that of the derogatory leases previously concluded to operate the same business in the same premises of more than three years from the effective date of the first derogatory lease.

Law No 2008-776 of 4 August 2008 on the Modernization of the Economy, Art. 44.

Act No 2014-626 of 18 June 2014 on Craftsmanship, Commerce, and Very Small Enterprises, Art. 3-I.

CA Aix-en-Provence, 8 November 2018, LawLex202200002074JBJ, in this case, and under the legislation prior to the Pinel Law, the parties were able to validly decide to derogate from the status of commercial leases and conclude several successive derogatory leases as long as the lessee waived their right to invoke the status when this right arose at the expiration of the two-year period.

Cass. 3e civ., 5 May 1999, LawLex202200002094JBJ, in this case, the lessee had, by letter, and the day after the expiration of the first derogatory lease, knowingly waived the benefit of the status of commercial leases, and had reiterated this waiver in the subsequent agreement.

Cass. 3e civ., 7 February 1996, LawLex202200002095JBJ: The waiver of the status of commercial leases stipulated by a new agreement granted and concluded before the tenant acquires the benefit of the status is without effect; See also Cass. 3e civ., 21 November 2001, LawLex202200002096JBJ.

CA Aix-en-Provence, 8 November 2018, LawLex202200002074JBJ, préc.; Also see Cass. 3e civ., 5 May 1999, LawLex202200002094JBJ, préc.

Cass. 3e civ., 5 April 2011, LawLex202200002097JBJ, in this case, the lessee, once having acquired the right to benefit from the status of commercial leases at the end of each successive derogatory lease, waived this right by signing a new derogatory lease containing an express, precise, and unequivocal clause, the meaning and scope of which he could not misunderstand, such a clause being self-sufficient.

Cass. 3e civ., 22 October 2020, LawLex202200001759JBJ.

Paris, 22 February 2024, LawLex202400001798JBJ, which specifies that the possibility for the parties to derogate from the provisions relating to commercial leases is subject to the condition that the total duration of the lease or successive leases does not exceed three years, and the parties can no longer enter into a new derogatory lease to operate the same business in the same premises upon the expiration of this period.

See, however, an isolated decision of the Third Civil Chamber which considered that a new lease concluded between the same parties, for the same premises, but for a different purpose, granted before the expiration of the previous derogatory lease at the end of which the lessee was left in possession of the premises, is subject to the status of commercial leases: Cass. 3e civ., 31 May 2012, LawLex202100002516JBJ.

Cass. 3e civ., 15 March 1989, LawLex202100002507JBJ.

Cass. 3e civ., 11 October 1977, LawLex202200002062JBJ, concerning a new lease for a location inside the store, for a duration not exceeding two years, following an initial derogatory lease for a commercial location outside the store, at a lower price and for a maximum duration of two years, with the new contract replacing the previous one, which is terminated by the will of the parties, the status of commercial leases not being applicable.

Cass. 3e civ., 5 July 1995, LawLex202100003006JBJ, in this case, the lessor intended to circumvent the mandatory provisions relating to the status of commercial leases by successively and alternately concluding short-term leases with the tenants, who were also cohabitants.

Cass. 3e civ., 9 February 1994, LawLex202200002077JBJ.

Cass. 3e civ., 8 April 2010, LawLex202200002076JBJ, according to which fraud committed during the conclusion of successive derogatory leases prevents the landlord from relying on the tenant's waiver of the right to commercial property.

Cass. 3e civ., 8 March 2005, LawLex202100002511JBJ.

Commercial Leases/Business Goodwill

61. Renewal or conclusion of a new lease

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61. Renewal or conclusion of a new lease

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Les décisions de justice citées dans ce paragraphe :

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