Commercial Leases/Business Goodwill

While, under Article L. 145-2, I, 2° to 4°, of the Commercial Code, public entities that lease premises or buildings or grant leases for “premises or buildings belonging to the State, local authorities, and public institutions,” provided in the latter case that these are private domain properties of public entities , may benefit from the status of commercial leases, this status does not apply to a …

Occupation of public property

While, under Article L. 145-2, I, 2° to 4°, of the Commercial Code, public entities that lease premises or buildings or grant leases for “premises or buildings belonging to the State, local authorities, and public institutions,” provided in the latter case that these are private domain properties of public entities , may benefit from the status of commercial leases, this status does not apply to agreements concerning properties that are part of the public domain , even if the lessor has the status of long-term leaseholder . Such is the case for the operation of a café-restaurant business in the Bois de Boulogne , a flight school on the airport public domain , or wintering and repair yards on the maritime public domain .

Indeed, the principle of inalienability of the public domain opposes the idea that assets within it can be subject to a lease governed by the status of commercial leases, as assets of the public domain can only be occupied or used under precarious occupation agreements  falling under the category of administrative contracts , for which publication is not necessary to be enforceable against third parties , since such authorizations granted by the public authorities are not subject to the status of commercial leases (Art. L. 145-2, II Commercial Code).

The system for the protection of commercial leases is also not intended to govern contractual relationships between private individuals concerning public property, that is, between a primary occupant holding a title of occupation on public property and a secondary occupant. In such a situation, the primary occupant, who only benefits from a provisional and precarious authorization granted personally by the public authority, cannot transfer more rights than they themselves have . Thus, the agreement by which the operator of a café-brasserie, holding a concession on public property for the installation of a terrace, grants a third party a space on the sidewalk for the purpose of setting up a business selling waffles, crepes, and ice cream, is not subject to the status of commercial leases . The courts do not hesitate to use the notion of “indivisibility” to exclude the application of the status when premises are located partly on private land belonging to a landlord, a private person, and partly on public riverside land, when these premises have been granted to the latter on a precarious basis . Finally, the public authority managing the public domain commits a fault likely to incur its liability when it grants a lease subject to the system for the protection of commercial leases for the operation of a property belonging to the public domain or leads the operator to believe that they benefit from the status .

Since the Pinel Law of 18 June 2014, Article L. 2124-32-1 of the General Code of Public Property  provides that “a business can be operated on public property subject to the existence of its own clientele.” The law notably establishes the possibility of transferring a business operated on public property. These rules, which do not apply to natural public property , however, include limitations related to commercial property since only a temporary occupancy permit is considered by the law . Moreover, while a business can now be operated on public property, a commercial lease still cannot pertain to such a business .

Cass. 3e civ., 28 February 1984, LawLex202100001310JBJ.

Cass. 3e civ., 20 December 2000, LawLex202100001313JBJ; 10 March 2010, LawLex202100001315JBJ, according to which the parties cannot choose to submit their rental relations to the status of commercial leases when they concern property belonging to the public domain.

Cass. 3e civ., 19 November 1985, LawLex202100001311JBJ.

Cass. 3e civ., 18 March 1998, LawLex202100001407JBJ.

Cons. d’Et., 24 November 2014, LawLex202100001411JBJ.

Law No 2014-626 of 18 June 2014, Art. 72. Conseil d'État, 24 November 2014, No 352402, AJCA 2014, 392, which specifies that the 2014 law applies to businesses whose operators occupy the public domain under issued titles only from its entry into force.

Article L. 2124-35 of the General Code of Public Property.

Art. L. 2124-33 and Art. L. 2124-34 General Code of Public Property.

Min. response to written questions No 20418 and 22140: JO Senate 8 Dec. 2016, 5325; JCP N 2016, act. 1338, which specifies that “it is not possible to conclude a commercial lease on public property by applying Articles L. 145-1 et seq. of the Commercial Code, as the aforementioned law has not expressly recognized this possibility.”

Cass. 3e civ., 19 December 2012, LawLex202100001318JBJ.

Council of State, 23 February 1979, LawLex202100001406JBJ, which emphasizes that this park constitutes a public promenade designated for public use and developed for this purpose.

Cass. 3e civ., 17 May 2011, LawLex202100001317JBJ.

Cass. 3e civ., 20 December 2000, LawLex202100001313JBJ.

CA Paris, 16 October 2013, LawLex202100003518JBJ.

Cons. d’Et., 15 February 2012, LawLex202100001409JBJ, for a precarious occupancy agreement concerning a location in a station classified as a public domain occupancy agreement falling under the category of administrative contracts.

Cass. 3e civ., 19 November 2014, LawLex202100001324JBJ.

Cass. 3e civ., 15 September 2009, LawLex202100001314JBJ, regarding a leasehold contract benefiting the primary occupant.

Commercial Leases/Business Goodwill

22. Occupation of public property

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Les notions juridiques connexes

22. Occupation of public property

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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