Renewal of a commercial lease

Renewal of a commercial lease

Our lawyers specialized in network present you with the key points to know when drafting your commercial leases.

Principle of renewal

The French commercial leases regulation provides for a specific protection of the lessee upon the term of the commercial lease contract: the lessee benefits from a right to renew the commercial lease, provided that the general conditions for the application of the status are met.

This principle is of mandatory, which means that all clauses that have the effect of defeating this right are deemed unwritten.


Implementation of the renewal

Le renouvellement du bail peut être réalisé à l’initiative du bailleur ou du locataire.

By the lessor

If the lessor takes the step of requesting the renewal of the commercial lease, he will have to give the lessee a notice of termination with an offer to renew given at least six months in advance. In this case, the notice must be given by “extrajudicial act” in accordance with the provisions of the Commercial Code.

It is then usual for the lessee either to notify his agreement to the renewal on the proposed terms, or to accept the principle of the renewal but contest the terms and conditions.


By the lessee

In the absence of a six-months notice in advance by the lessor, the lessee may also apply for renewal of the commercial lease if he so wishes. In this case, the notice must be given by extrajudicial act or by registered letter with acknowledgement of receipt in accordance with the stipulations provided for in this respect by the Commercial Code.

The lessor then has a three-months period to inform the lessee by extra-judicial act of his decision to refuse the renewal, stating the reasons for the refusal. In the absence of a response within this three-month period, the lessor is deemed to have accepted the principle of renewal.


Refusal of renewal by the lessor

Note that it is always possible for the lessor to refuse the renewal, in which case he will have to issue the lessee with a “termination notice without renewal offer”.

It will then be necessary for the lessor either to pay an “eviction indemnity” or to justify a legitimate reason for non-renewal.

If the lessor has refused to renew the commercial lease, it will also be possible for him to exercise a right of “repentance”. This right ultimately allows him to accept the renewal and avoid paying “eviction compensation”.


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