Owner's refusal to renew commercial lease

Verified 01 January 2023 - Directorate for Legal and Administrative Information (Prime Minister)

The owner (called lessor) who refuses to renew the commercial lease at the end of the term (i.e. after a period of 9 years) must in principle pay financial compensation to the lessee. This amount of money is called eviction allowance. In some cases, the payment of this allowance is waived.

With eviction pay

The owner of the commercial lease who refuses to renew the commercial lease must in principle pay a eviction allowance to the tenant.

This is a financial compensation to compensate the lessee for the damage caused by not renewing his lease.

In order to receive this allowance, the tenant must meet certain conditions:

  • It must be registered to SCR: titleContent and the RNE: titleContent
  • He must exploit the goodwill.

This allowance is calculated on the basis of various criteriaevaluation.

Please note

The tenant may waive the payment of the eviction allowance. Its renunciation must be clear and unambiguous.

The tenant can stay in the premises according to the terms of the expired lease until the owner pays the eviction allowance.

As the lease has expired, the tenant who stays in the premises no longer pays rent but a occupancy allowance.

From the payment of the eviction allowance, the tenant has 3 months to free the premises.

Once the amount of the eviction allowance is fixed, the lessor has 15 days to implement its right to repent.

This right allows the lessor to reconsider his decision and to propose the renewal of the lease to his tenant. He thus escapes the payment of the eviction allowance.

Without Eviction Pay

The landlord may refuse the renewal of the commercial lease without being required to pay the lessee an eviction fee if:

When the lessor criticizes the tenant for his behavior, he can refuse the renewal of the lease without having to pay him an eviction allowance.

To do so, he must justify against it serious and legitimate grounds. Examples include:

  • Non-payment of rent and charges
  • Failure to comply with any condition of the commercial lease, such as changing the location of the premises without the permission of the lessor
  • Violent attitude of the tenant towards the landlord, insults or words defamatory
  • Termination of the operation of the land by the lessee without reason.

To refuse renewal, the lessor must send a leave of absence by an act of Commissioner of Justice (formerly act of bailiff) 6 months before the commercial lease expires.

This leave shall indicate the reason for the refusal to renew the commercial lease. The lessor must also give formal notice the lessee to make good the breach. If the lessee has not put an end to the alleged infringement within 1 month, the lessor may refuse the renewal without paying compensation.

The leave must also indicate that the lessee has a period of 2 years to challenge the refusal of the renewal of the lease before the court of law.

Who shall I contact

When the owner wishes to build or rebuild the existing building, he can refuse the renewal of the commercial lease without paying d'eviction allowance . To do so, it must offer the tenant a replacement space corresponding to his needs and possibilities, located in an equivalent location (i.e. a new space located in the immediate vicinity of the current store).

The lessor does not have to pay the lessee an eviction allowance. However, they must pay a small amount of compensation (called limited allowance(b) in compensation for temporary withdrawal of the fund and removal and resettlement costs.

In order to refuse the renewal of the lease, the lessor must grant leave by act of commissioner of justice (formerly act of bailiff) 6 months before the commercial lease expires.

The leave must also indicate that the lessee has a period of 2 years to challenge the refusal of the renewal of the lease before the court of law.

Who shall I contact

Warning  

Where the lessor does not provide a replacement space, the lessor must pay a eviction allowance to the tenant.

The lessor may refuse the renewal of the commercial lease without having to pay eviction compensation to the lessee in the following cases:

  • When the building must be totally or partially demolished because it is in unsanitary condition (an order for the treatment of unsanitary conditions must be issued by the prefect).
  • When the building can no longer be safely occupied due to its condition (the dangerous character is proven by an expert report or a security order of the mayor or police prefect for Paris).

The lessor may refuse to renew the lease by sending a leave of absence to the lessee by act of commissioner of justice (formerly act of bailiff) 6 months before the commercial lease expires.

This leave shall indicate the reason for the refusal to renew the commercial lease. The lessor must also give formal notice the tenant to repair the violation. If the lessee has not put an end to the alleged infringement within 1 month, the lessor may refuse the renewal without paying compensation.

The leave must also indicate that the lessee has a period of 2 years to challenge the refusal of the renewal of the lease before the court of law.

Who shall I contact

FYI  

If the lessor rebuilds a new building with commercial premises, the lessee has a priority right (i.e., must be selected) to lease in that new rebuilt building. To do this, the tenant must inform the landlord, by act of commissioner of justice or by registered letter with AR, of his intention to use this priority.

Where the lessor wishes to take over the ancillary dwelling-room from the rented commercial premises, he may refuse to renew the lease, only on the part concerning the dwelling-rooms. In this case, he does not have to pay an eviction allowance to the tenant since he retains the commercial part of the premises.

The lessor may therefore refuse renewal if the following two conditions are met:

  • He must live in the dwelling-place himself or have it occupied by a member of his family (his spouse, his ascendants or descendants or those of his spouse).
  • The beneficiary of the take-back must not have a dwelling corresponding to his normal needs (e.g. cold and humid room)

However, this resumption of accommodation is not possible in the following cases:

  • The premises are used for hotel, teaching, hospital or furnished rentals.
  • Deprivation of use of the dwelling-houses prevents the tenant from using the land.
  • The commercial and residential premises form an indivisible whole.

Warning  

The beneficiary of the recovery must occupy personally the premises within 6 months from the departure of the tenant and for a minimum period of 6 years. If this is not the case, the evicted tenant may apply for eviction compensation.

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