At the end of the lease (i.e. at the end of the 9-year period) 3 situations can be considered:

• The lessor shall take the initiative for renewal : he/she sends a leave with offer of renewal to his/her tenant. This leave allows him to propose a new rent. If he does not send a leave to the tenant and the lease continues (this is referred to as a tacit renewal), the rent can be increased only during the triennial review.
• The tenant may also be the renewal initiator where he has not received leave from the lessor. He can then send a renewal application directly to his lessor. He may mention rent in his application renewed. This rent is then calculated as a function of the variation in the quarterly commercial rent index (ILC) or the quarterly tertiary activity rent index (ILAT). This variation is a ceiling: we are talking about rent ceiling.
• When both sides remain silent, the commercial lease shall continue beyond 9 years for an indefinite period. We're talking about tacit extension. The lessor or lessee may terminate this implied extension at any time by dispatching a leave of absence with 6 months' notice.

On the expiry of the term laid down in the contract, the commercial lease may be renewed by the lessor. He then sends his tenant a leave with a renewal offer from the lease.

This leave makes it possible to propose a new rent its tenant based on the change in the Commercial Rent Index (CII) or, if applicable, the Tertiary Activity Rent Index (CII).

1Sending a leave

The lessor must send a leave of absence by act of commissioner of justice (formerly a bailiff) at least 6 months prior to lease expiration date.

This leave must specify the following:

• Reasons for giving
• Possibility for the tenant to bring the matter before the court before the expiry of a period of 2 years if he wishes to contest the leave or request payment of an eviction allowance

Where the lease has been extended by default, leave must be granted at least 6 months in advance and for the last day of the calendar quarter (i.e. March 31; June 30, September 30 or December 31).

2Tenant Response

When the tenant has received a leave with a renewal offer from his landlord, he has 3 possibilities:

• Decline Renewal Offer : The commercial lease ends. In this case, the lessor does not pay the lessee a eviction allowance.
• Accept the renewal and the proposed new rent : he can give his express agreement either by an act of a commissioner of justice (formerly a bailiff) or by registered letter with acknowledgement of receipt. It may also give its consent tacitly, for example by spontaneously paying the rent increase proposed by the landlord.
• Accept the renewal but refuse the new rent : the landlord and the tenant can then decide amicably on the amount of the rent. However, if the parties do not reach an agreement, either party may refer the matter to the Departmental Commercial Lease Conciliation Commission (CDC) or to the court if the conciliation commission has not been able to reach an agreement.

3Renewal of the commercial lease

When the parties agree to renew the commercial lease, a new contract is signed at the same conditions than those of the expired lease.

However, the parties may agree to amend certain clauses of the initial contract.

The amount of the renewed rent is calculated in one of the following 2 ways:

• Depending on the change in the Commercial Rent Index (CLI) or, if applicable, the Tertiary Activity Rent Index (LTI). It is said that the rent is capped at the variation of the CLI or the LTI.
• Depending on the rental value (and therefore removed from the ceiling).

To learn more about the renewed rent, you can consult the sheet Commercial Lease: Setting and Revising Rent

Where the tenant has not received a leave with an offer to renew at the end of the lease term (minimum 9 years), he can apply to his landlord for a renewal. In fact, the tenant benefits from right to renewal its commercial lease (or commercial property right ").

Right to renewal of commercial lease

Conditions for the right to renew the commercial lease 

In order to benefit from this right to renewal, the tenant must respect the 3 following conditions :

• Owning of the goodwill
• Be registered the Trade and business Register (RCS) for a trader or the National company Register (RNE) for a craftsman. This condition of registration with the RCS must be fulfilled on the date of the grant of the leave or on the date of the request for renewal made by the tenant.
• Effectively exploiting goodwill on the premises during 3 years before the date of expiry of the lease or of its renewal. Actual operation is actual commercial operation, regular and in accordance with the provisions of the lease. In other words, the intermittent operation of the fund, the absence of activity in the premises or an activity that is too recent do not allow the tenant to benefit from the right to renewal.

The absence of any of these conditions means that the tenant loses his right to renewal.

Right to renewal in the event of assignment of the commercial lease

In the event of an assignment of the commercial lease, the assignee (i.e. the person buying back the lease) has a right to renewal of the lease if the assignment takes place during the First 6 years of the lease.

However, where the lease is transferred in the last 3 years of the lease commercial, the following two situations must be distinguished:

• Transfer of goodwill  : to benefit from the right to renew the lease, the tenant must have exploited the goodwill effectively for 3 years. Here, the new purchaser of the goodwill has the possibility of completing its operating period with that of the vendor of the goodwill and can therefore benefit from the renewal of the commercial lease.
• Assignment of the sole right to the lease : the new purchaser cannot benefit from the right to renew the lease. In this case, the new buyer has an interest in obtaining from the lessor a promise of renewal or an early renewal of the lease prior to the signature of the deed of assignment.

Application for renewal of the commercial lease

If the lessee has not received leave from the lessor and wishes to obtain the renewal of the commercial lease, the lessee must apply for renewal of his lease.

This request must comply with the conditions following:

• Be sent by registered letter with AR or by act of commissioner of justice in the 6 months before the lease expires.
• Include mention listed in Article L. 145-10(4) of the Commercial Code:
  “ within 3 months of notification of the application for renewal, the lessor must, by a bailiff's act, inform the applicant if he refuses the renewal, giving the reasons for this refusal. If the lessor has not made known its intentions within that period, it shall be deemed to have accepted the principle of renewing the previous lease ”.

The renewal application may contain a rent proposal but is not required.

The lessor has 2 options:

If the lessor has not sent a leave of absence and the lessee has not applied for the renewal of the lease, the lease continues purely and simply for one indefinite duration. We're talking about tacit extension. It's not a new contract; it's the same commercial lease that's being extended.

Continuation of the lease

The commercial lease continues on the same terms.

As a result, the parties continue to apply the original lease agreement:

• The lessor fulfills all obligations contained in the contract (e.g. to take over major repairs).
• The tenant continues to pay rent and expenses. The rent on the commercial lease remains the same during the tacit extension. However, a triennial rent review may be considered.

Assignment of goodwill and lease

In the event of a tacit extension of the commercial lease, the lessee may transfer his business. However, the new purchaser is exposed to the risk of non-renewal of the commercial lease or an increase in rent.

Indeed, the lessor can decide not to renew the lease by sending a leave 6 months before the desired end date and the last day of the calendar quarter.

Ending tacit extension

The lessor or lessee may terminate the implied extension of the commercial lease. To do so, they must send a leave that meets the following conditions:

• By act of commissioner of justice (formerly act of bailiff)
• At least 6 months before the desired end date and for the last day of the calendar quarter (31 March, 30 June, 30 September or 31 December).