Terminate a commercial lease

Verified 23 September 2022 - Directorate of Legal and Administrative Information (Prime Minister), Ministry of Justice

The tenant (called lessee) may terminate the commercial lease at the end of each three-year period (i.e. after 3, 6 or 9 years). It may also request termination at any time in certain cases. The owner (called lessor) may terminate the lease in the event of fault on the part of the tenant or at the end of each three-year period in very specific situations (reconstruction of a building, taking over of a residential premises). Amicable termination is also possible.

Tenant

The lessee may terminate the lease without special reason at the end of each three-year period (i.e. after 3, 6 or 9 years). We're talking about three-year termination.

It may also terminate the lease, outside these three-year periods in certain situations: when he has applied for his pension rights, or when he is in receipt of an invalidity pension. In the event of the death of the tenant, its assigns may also terminate the lease.

Termination of the lease may also come from a rescission clause introduced into the commercial lease.

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For each 3 year period

The tenant can terminate the commercial lease at the end of each 3-year period, without any particular reason.

The employee shall grant leave by one of the following means:

  • Either by act of commissioner of justice (formerly act of bailiff)
  • Or by registered letter with notice of receipt.

Leave must be given at least 6 months before the expiry of the current three-year period.

Failure to comply with this 6-month deadline postpones the effects of the leave to the next three-year period.

Example :

A three-year commercial lease expires on September 30. The leave must therefore be sent by the tenant to the landlord by March 31.

The lessor and the lessee may decide to exclude the possibility of a three-year termination in the following lease agreements:

  • Leases older than 9 years (e.g. leases between owners and operators of vacation homes)
  • Leases of premises intended for the exercise of a single activity
  • Leases of premises for the exclusive use of offices
  • Leases of storage premises (i.e. warehouses).

At any time

Termination in special situations

The commercial lease may be terminated without waiting for the end of the three-year period in some cases.

The tenant who is either a trader or a majority manager for at least 2 years of the SARL: titleContent the holder of the lease, or a sole partner of a EURL: titleContent may terminate the lease at any time if it is in any of the following situations:

  • He asked for his pension rights.
  • He has a disability pension.

If the tenant meets these conditions, he can then give owner's leave.

Leave shall be granted at least 6 months in advance, by registered letter with request for notification of receipt or by document of Commissioner of Justice (formerly a bailiff).

In case of death of the tenant, the lease shall not be automatically terminated unless a clause of the contract so provides. The lease is passed on to the heirs who have the option of terminating the lease without waiting for the three-year term.

Warning  

the directors of SA and SAS may not terminate the lease before the three-year deadline since they are neither a trader, nor a majority manager of SARL, nor a sole partner of EURL.

Termination sought in court

If the lessor does not meet certain obligations related to the commercial lease (e.g., the taking over of major repairs such as major construction work), the tenant may request the judicial resolution the lease (i.e. the end of the lease).

This must be requested from the court of law location of the building.

Who shall I contact

The judge has discretion and pronounces the resolution where the breach is of some gravity.

Resolution by mutual agreement between the tenant and the owner

The tenant can agree with the landlord to terminate the lease at any time. This is called amicable resolution the lease agreement.

Amicable termination does not require any particular form. The landlord simply has to accept the tenant's offer of amicable termination.

Written proof is required in case of disagreement (e.g. a letter signed by the tenant and the lessor).

Lessor

The lessor may terminate the commercial lease either after each 3-year period under certain conditions or at any time in the event of the lessee's fault.

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Every period 3 years

At the end of a 3-year period (called three-year period), the owner has the right to take over the leased premises in any of the following cases:

  • Reconstruction of a building or elevation 
  • Resumption of a dwelling-room rented as an ancillary part of the commercial premises and not used for dwelling purposes 
  • Recapture of a portion of land when the lessor has obtained a permit to construct a dwelling 
  • Residential conversion of an existing building 
  • Performance of prescribed or authorized works in a real estate restoration operation

He must then give the tenant leave 6 months in advance by act of commissioner of justice (formerly act of bailiff).

At any time

The landlord may request the termination of the lease when the lessee fails to perform the obligations set out in the contract (e.g. subleasing premises without the owner's permission).

In this case, the lessor has two possibilities:

He can go to the court to ask for the lease to be resolved (this is called a judicial resolution).

He may use the termination clause of the commercial lease which provides for termination in the event of non-compliance by the tenant with one or more obligations.

Termination sought in court

The lessor has the possibility to apply to the court of law of the location of the building for the resolution of the commercial lease following a tenant's fault. This is called judicial resolution.

These include, for example:

  • Lack of insurance
  • Sub-leasing of premises without owner's authorization
  • Non-exploitation of trade
  • Non-payment of rent

The court accepts or refuses the request for resolution made by the landlord based on the extent of the tenant's fault.

Who shall I contact
Termination under the lease (termination clause)

The rescission clause is a clause in the contract that provides that failure to perform a specified obligation results in termination of the lease.

To implement this clause, the owner must send, by deed of Commissioner of Justice (formerly a bailiff), a command which informs the tenant that he will use the cancelation clause.

The command must mention the following:

  • Acts of which the tenant is accused (e.g. carrying out an activity without the owner's permission)
  • Command to cease non-compliance with the lease
  • Mention of a 1-month period to ensure that the tenant fulfills the landlord's request and meets his obligations.

If the lessee performs what is requested in the order, the lease is not terminated.

However, if the tenant does not comply with the request, the lease is automatically terminated. It is effective 1 month after the sending of the command to pay or the summons to execute.

FYI  

In the case of an order to pay late rents, the tenant can apply to the court payment periods within 2 years.

Resolution by mutual agreement between the tenant and the owner

The landlord may decide by mutual agreement with the tenant to terminate the lease at any time. This is called amicable resolution the lease agreement.

Amicable termination does not require no particular shape. The tenant simply has to accept the landlord's offer of amicable termination.

Written proof is required in case of disagreement (e.g. a letter signed by the tenant and the lessor).

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