Already the second publication from the real-estate team of SQUADRA AVOCATS. Its purpose, during this holiday period, is to enlighten the players of the real-estate world on the latest case-law in this field to be taken into account in order to limit the risks of litigation.
Legislative developments
Law no. 2025-541 of 16 June 2025
The law of 16 June 2025 aims to facilitate the conversion of tertiary premises (offices, shops, public buildings…) into housing.
It introduces derogations into the Town Planning Code, simplifies authorisation procedures and encourages mixed-use projects in order to respond to the housing crisis and combat real-estate vacancy in high-demand areas.
One of the main measures is the creation of a building permit for multiple uses.
The authority competent for the local urban plan (PLU) may now delimit sectors where a building permit may authorise several successive uses of a building, subject to the favourable opinion of the municipal council of the municipalities concerned.
Thus:
- The building permit is granted under the conditions of ordinary law;
- In order for the building permit to anticipate future changes of use without requiring new town-planning authorisations, the documents provided when filing this building permit (which enjoys a validity period of 20 years) must make it possible to verify the compliance of these future changes;
- In all cases, changes of use must be declared to the mayor.
Case-law developments
The lessor’s delivery obligation
The commercial lease stipulated that the tenant had to carry out all upgrading works necessary for the operation of its activity.
However, the lease contained no express stipulation that the tenant would bear the works to remedy the non-compliances with the fire-safety rules existing at the time of the initial delivery of the leased premises.
In this case, the premises were not compliant with fire standards from the very delivery of the premises to the tenant.
The Court of Appeal had found gross misconduct on the part of the tenant for having operated the premises without bringing them up to standard for several years.
In the absence of an express clause to the contrary, it is for the lessor to carry out the works to bring the leased premises into compliance with the fire-safety standards required by the exercise of the tenant’s activity provided for in the lease.
Cour de cassation, 3e chambre civile, 10 Avril 2025 – n° 23-14.105, n° 23-15.124, n°23-14.099
Beyond the Pinel law, which requires the lessor to include in the lease an inventory of charges, the case-law is very strict on the re-invoicing of charges to the tenant. Any ambiguity or lack of precision in a clause will always be interpreted in favour of the tenant, in particular on the basis of article 1190 of the Civil Code.
Indexation clause deemed partially unwritten
Under article L. 145-15 of the Commercial Code, clauses, stipulations and arrangements that have the effect of defeating the provisions of articles L. 145-37 to L. 145-41 of the same code are deemed unwritten, whatever their form.
According to article L. 145-39, if the lease is accompanied by a sliding-scale clause, the review may be requested each time that, by the operation of this clause, the rent is increased or decreased by more than a quarter compared with the price previously fixed contractually or by judicial decision.
In this case, the indexation clause stipulated in the commercial lease provided that it applied only in the event of an increase in the reference index.
It is settled case-law that such a clause is illegal.
The Court of Appeal declared the entire indexation clause unwritten, finding that the lease stipulated that the said clause, excluding any reciprocity in the variation of the index, constituted in particular for the lessor a decisive reason for the conclusion of the commercial lease without which it would not have contracted.
The Cour de cassation quashed the judgment, holding that the Court of Appeal should have examined whether only the prohibited stipulation could be deemed unwritten, and not the indexation clause as a whole, provided that this does not undermine the coherence of the clause.
Cour de cassation, 3ème Chambre Civile, 22 mai 2025 n° 23-23.336
Once again we can only draw the attention of the parties to a commercial lease to being very attentive to the drafting of an indexation clause which, for many years, has given rise to numerous disputes on various grounds, including the one set out above.
Covid rent and loss of the leased property
Under article 1722 of the Civil Code, "if, during the term of the lease, the leased property is destroyed in its entirety by fortuitous event, the lease is terminated as of right. If it is only destroyed in part, the Lessee may, depending on the circumstances, request either a reduction of the price or the termination of the lease itself. In either case, there is no ground for any compensation".
In this case, the tenant disputed the payment of rent during the period of administrative closure of the premises linked to Covid on the basis of this article.
The Court of Appeal of Aix-en-Provence had upheld this argument, treating these administrative restrictions as a loss of the leased property.
The Cour de cassation recalls that the effect of the governmental measure prohibiting the reception of the public, which is general and temporary and without direct connection with the contractual use of the leased premises, cannot be treated as the loss of the property, within the meaning of article 1722 of the Civil Code (3e Civ., 23 novembre 2022, pourvoi n° 21-21.867, publié).
Cour de cassation, 3e chambre civile, 7 Mai 2025 n° 24-10.097
Covid was an opportunity for tenants to invoke various grounds to justify the non-payment of rent during the period of imposed closure of commercial premises. One of the most "original" was the legal destruction of the premises. The position of the Cour de cassation is very clear: the closure linked to Covid is not a case of legal destruction.
Reduction of the rental value in the context of fixing the renewal rent
In the context of fixing the renewal rent, pursuant to articles L145-33 3° and R.145-8 of the Commercial Code, the rental value must be corrected to take account of the possible existence of clauses derogating from ordinary law.
In this case, the tenant sought a reduction of the rental value on the ground that it had paid, in addition to the rent payable quarterly and in advance, a security deposit equivalent to two quarters of rent.
Since, pursuant to article L. 145-40 of the Commercial Code, it has as its counterpart the lessor’s legal obligation to pay the tenant interest at a rate fixed by law, the stipulation of a commercial lease imposing on the tenant an obligation to pay in advance more than two instalments of rent (in this case three instalments) does not constitute a factor reducing the rental value.
Cour de cassation, 3e chambre civile, 10 Avril 2025 – n° 23-14.105, n° 23-15.124, n°23-14.099
This case-law is an opportunity to recall that when the lessor requests the tenant to pay more than two instalments of rent in advance in respect of the rent and the security deposit, it owes the latter statutory interest on the share paid beyond the two instalments. As the provisions of article L. 145-40 of the Commercial Code are of public order, it is not possible for the parties to a commercial lease to validly waive them.
Pinel right of preference and overall sale of a building
Under article L.145-46-1 of the Commercial Code, the tenant has a right of preference "when the owner of premises for commercial or craft use plans to sell them".
The last paragraph of this article provides for exceptions to this right of preference, in particular in the event of an overall sale of a building comprising commercial premises.
From this text it could be inferred that the right of preference applied in the event of the sale of a building comprising only one set of commercial premises.
The Cour de cassation puts an end to this uncertainty, holding that the tenant does not benefit from a right of preference when the leased premises constitute only a part of the building sold, even if the latter comprises only a single set of commercial premises.
Cour de cassation, 3e chambre civile, 19 juin 2025 – n° 19.292, n°23-17.604
The "improvable" drafting of article L.145-46-1 of the Commercial Code is a source of legal uncertainty, which is problematic in the context of an operation such as the sale of a building. We can therefore only thank the Cour de cassation for these clarifications.