Adding or changing business in a commercial lease

The lessee may add to the activity set out in the commercial lease related activities or complementary. He must obtain the permission of the owner of the premises by following the partial de-specialization procedure.

Related or complementary activity

When the commercial lease is signed, the activity that can be carried out on the commercial premises is specified. It is possible to add an activity by getting the owner's authorization.

The added activity must be related or complementary.

L'related activity is an activity closely related to the activity already carried out. For example, the sale of ready meals is considered to be related to the main activity of selling cold cuts.

L'complementary activity is that which is necessary for a better exercise of the principal activity. For example, selling food at a gas station.

Partial de-specialization procedure

Before any activity is added, the tenant must make known to the owner its intention to add an activity. He does this by an act of a commissioner of justice (formerly an act of a bailiff) or by registered letter with a request for notice of receipt.

The owner has 2 months to challenge the tenant's plan. He can refuse to add activity only in the case where this activity is not related to or complementary to that indicated in the lease.

If the owner does not respond, the project is accepted.

In case of refusal of the landlord, the tenant can bring the matter before the court.

The judge has a wide discretion to authorize the tenant to carry out the activity or to reject his application.

Impact on rent

Adding a related or complementary activity does not result in an immediate rent increase.

This may occur during the triennial rent review that follows the activity extension notification. The landlord can increase the rent if the added activity has itself resulted in a change in the rental value rented places.

The tenant may be authorized to be exercised in rented premises 1 or more different activities those provided for in the commercial lease. To do this, it must meet certain conditions and obtain the authorization of the lessor (or owner).

Procedure for total or full de-specialization

The exercise of an activity different of that provided for in the lease contract may be considered if all of the following conditions the following shall be combined:

• Economic developments (e.g. insufficient profitability)
• Need for rational organization of distribution (e.g. interest in creating another activity in relation to existing shops and customer needs)
• Compatibility of the activity with the destination, the characteristics and the location of the building (for example, do not cause any nuisance to the neighborhood).

The tenant must ask prior authorization the owner by an act of commissioner of justice (formerly an act of bailiff) or by registered letter with AR.

Information of certain creditors by the tenant

If creditors have a privilege registered on the goodwill, the tenant shall also warn them by act of Commissioner of Justice or by registered letter with AR of the change of activity.

The owner has 3 months to respond by Commissioner of Justice act or by registered letter with AR.

Failure to reply shall be deemed acceptance.

Information of other tenants by the owner

The landlord must also inform his other tenants to whom he has undertaken not to rent for an activity identical to that which will be carried out. They have 1 month to let the owner know their opinion on this change.

This information is provided by an act of the Commissioner of Justice or by registered letter with AR.

Failure to reply shall be deemed acceptance.

Owner's opposition to business change

The owner may object to the change of activity in the following cases:

• Grave and legitimate reason (e.g. new activity is incompatible with the nature of the building)
• Non-compete commitment made by the landlord to other tenants
• Exercise of the right taken over (for example, in the case of reconstruction of the existing building or raising of the building or urban renewal works)

Rent impact and de-specialization allowance

The lessor who has accepted the de-specialization may, in return for the advantage conferred, claim an increase in rent without waiting for the triennial review.

The change of activity may also result in the payment of a compensation known as de-specialization. This compensation shall be paid to the lessor to compensate him for any damage which he may justify.

For example, it may be a loss linked to the reduction in rents of other tenants due to the disturbance of enjoyment caused by the new activity, to the increase in charges, etc.