Derogatory lease (or short-term lease)

Verified 22 August 2022 - Directorate of Legal and Administrative Information (Prime Minister), Ministry of Justice

The derogatory lease (or short-lived) is a lease of up to 3 years for premises used for the operation of a business. Commercial lease status rules (such as the right to lease renewal or the payment of eviction compensation for non-renewal) do not apply to the overriding lease.

The conclusion of a short-term lease is possible provided that all of the following conditions are met:

  • Lease agreement must be a written contract.
  • The parties must clearly express their will to exclude the status of commercial leases
  • The total duration of the successive lease or leases shall not exceed Three years.

If these conditions are not met, it is the rules governing the status of commercial leases that apply.

FYI  

A lessor may sign 1 or more short-term leases on the same premises and with the same tenant provided that the total duration does not exceed 3 years.

The landlord and the tenant are given a great deal of freedom to insert all the clauses corresponding to their needs (for example, the type of business or activities to be carried on in the premises or the amount of rent and its charges).

The notwithstanding lease therefore allows traders to test their business without the constraints of commercial lease rules.

A state of play must be attached to the short-term lease agreement.

It must be established when the tenant takes possession of the premises in one of the following ways:

  • Be amicable
  • Either by a third party mandated by the parties (e.g. a real estate agent)

Please note

When the parties disagree, they must ask a Commissioner of Justice (formerly bailiff and judicial auctioneer) to establish the state of play. In this case, the costs are shared between the lessor and the tenant.

The rent is set freely by the parties and is not capped.

One indexing clause is possible: the rent can then vary automatically, up or down, depending on the commercial rent index (ILC) or the index of rents for tertiary activities (ILAT).

In principle, the derogating lease is concluded for a fixed period and automatically stops on the date stipulated in the contract.

Neither the landlord nor the tenant can give a early leave, before the end of the rental period provided for in the contract.

At the end of the term set in the lease, the tenant must vacate the premises and return the keys on the last day of the contract. The tenant does not therefore have the right to lease renewal or the payment of a eviction allowance in the event of non-renewal.

However, if the tenant is always on site 1 month after the end of the lease, without opposition from the owner, he then benefits from a new lease. This lease will be automatically a commercial lease.

If the landlord wishes the tenant to leave the premises, he must, within a period of1 month after the end date set in the lease, send it one of the following documents:

  • Either a leave by act of commissioner of justice (formerly act of bailiff)
  • Either a registered letter with AR

One exit inventory is established when the premises are returned either amicably or by a third party authorized by the parties (for example, a real estate agent). In the event of a disagreement, the owner or tenant can call on a commissioner of justice (formerly bailiff and judicial auctioneer): in this case, the costs are shared between the parties.

Warning  

the tenant must pay his rent until the end of the derogatory lease, even in the case where he decides to leave the premises before the end date of the contract.

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