Commercial Leases/Business Goodwill

When a public domain asset is declassified pursuant to Articles L. 2141-1 et seq. of the General Code of the Property of Public Persons , it is necessary, for premises to be considered as having ceased to constitute a dependency of the public domain of a public establishment entrusted with a public service mission, that an express act pronounces their declassification, even if they have been subject to a commercial lease at the end of this mission .

When a public domain asset has been subject to a precarious occupancy agreement, the declassification of this asset does not, by itself, terminate the initial relationship between the parties: the submission to the status of commercial leases of the declassified asset requires the conclusion of a new agreement between the parties. Indeed, the declassification does not alter the precarious nature . Even when followed by a transfer of the asset, it does not transform the precarious occupancy agreement into a private law contract . In other words, the provisions relating to the status of commercial leases do not apply automatically in the event of declassification .

According to Article L. 2141-1, “a property of a public person that is no longer allocated to a public service or for direct public use is no longer part of the public domain as of the issuance of the administrative act noting its declassification.”

Cons. d’Et., 13 December 2006, LawLex202100001423JBJ, regarding premises used between 1920 and 1980 as the auction room for pledged items by a municipal public establishment and specially equipped for this purpose to enable it to fulfill the public service missions with which it is entrusted, a period after which the premises in question were leased under the regime of commercial leases until 2002.

CA Paris, 16 October 2013, LawLex202100003518JBJ; Cass. civ. 3e, 13 May 1997, LawLex202100001466JBJ. Also see: Cass. 3e civ., 17 May 2011, LawLex202100001317JBJ, on the transformation of a public institution into a public limited company and the declassification of its domain subsequent to the occupation agreement.

In this case, public law contractual relationships continue on private property, and the regime of commercial leases remains inapplicable: Cass. 3e civ., 27 April 2017, LawLex202100001325JBJ; 6 February 2013, LawLex202100001323JBJ; Cass. civ. 3e, 19 November 2014, LawLex202100001324JBJ.

Cass. 3e civ., 5 March 1997, LawLex202100001321JBJ; Cass. 1re civ., 17 October 2012, LawLex202100001322JBJ

23. Declassification