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Renting premises

Business premises can either be owned or leased. Companies usually start their activities in France, by renting business premises.

Articles L.145-1 and seq of the French Commercial Code regulate the main features of the French commercial leases as follows:

  • the duration of the lease cannot be less than 9 years with a break option for the tenant (that can be waived in the lease) every 3 years with a 6 month prior termination notice (to be served by bailiff or notified by registered letter with acknowledgment of receipt). It is possible to conclude a short-term lease at the term of its maximum duration set to 36 months.

  • upon the expiry date of the lease, the tenant has the right to renew the lease on the same terms and conditions, subject to the tenant having satisfied its obligations under the lease or to obtaining the payment of an eviction indemnity covering the tenant’s loss of business.

  • the tenant can freely assign the lease along with a transfer of its "fonds de commerce" (ongoing business). The assignment of the lease without the business transfer is subject to the landlord‘s prior consent unless otherwise stated in the lease.

  • the landlord can review the amount of the rent every 3 years and vary the rent on an annual basis in line with the variations of the commercial rents index ( ILC or ILAT).

The cost of most charges and building works (excluding structural work of article 606 of the French civil code) are usually borne by the tenant. Commercial leases must provide an inventory of the charges, taxes and other costs.

On the expiry of the lease, the tenant returns the premises to the landlord in its original state. It usually transfers the benefit of any improvements (if any) to the landlord with no compensation.

The tenant usually pay a deposit to the landlord and/or provide the landlord with a guarantee (either from a bank or an affiliated company). It is forbidden to rent the business premises unless expressly stated in the lease. However, corporate tenants can usually sublet the premises to other companies of their group.

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