New law on commercial leases

On 17  January, the Parliament adopted the Law on commercial leases (the “Law”) which modifies significantly the regime applicable to commercial leases. The Law does not apply to office leases or to leases with a duration of 1 year or less.

The Law aims at reinforcing the protection of the tenants by introducing a number of important changes:

• Prohibition of the payment of a “pas-de-porte”: any additional amount to the rent paid to the landlord or to an intermediary as a result of the conclusion of the lease is automatically void;
• Limitation of the rental guarantee: the rental guarantee shall not exceed 6 months' rent and the tenant may provide a bank guarantee or an insurance;
• Prohibition for the main tenant to charge the sub-tenant a rent higher than the rent the main tenant pays to the landlord, except in the case of specific investments;
• Replacement of the commercial reprieve“sursis commercial” by a reprieve of moving out “sursis à déguerpissement”;
• Reform of the right of renewal and introduction of an eviction allowance: during the first 9 years of occupancy, the landlord may not terminate or refuse to renew the lease, except for the reasons listed exhaustively in the Law. After 9 years of occupancy, the landlord may terminate or refuse the renewal of the lease without having to provide any justification but the landlord or a third party has to pay eviction compensation to the tenant;
• Introduction of a pre-emptive right “droit de préemption" for tenants with leases running for at least 18 years.

The Law enters into force on the first day of the month following its publication in the Mémorial, and is applicable not only to lease contracts concluded after this date but also to current lease contracts. Hence, it is important to verify whether the current contracts comply with the provisions of the Law.

One of the exceptions is the nullity of the payment of an additional amount to the rent “pas de porte”:  the lessee cannot claim reimbursement of the “pas de porte” paid under lease contracts being in force prior to the applicability of the Law.