FRANCE Law and Practice Contributed by: Antoine Mercier, Myriam Mejdoubi and Gabriel Dalarun, DLA Piper France LLP
Professional Leases Professional leases have a minimum duration of six years and are for professional activities only (to the exclusion of commercial, craft, industrial and agricultural activities). The lease can be ter - minated by the tenant at any time, by giving six months’ notice. 6.2 Types of Commercial Leases Regular commercial leases are historically tai - lored for the purpose of merchant activity, but are also regularly used for office or warehouse premises, for instance. In any event, the applicable rules of the French Commercial Code are mainly designed to pro - tect the tenant vis-à-vis the landlord. Short-term leases can be seen as a first step on the path to the granting of a commercial lease. Under such an agreement, the tenant is able to start its business operation for a limited period of time (less than three years), while the landlord is not bound for more than such duration. 6.3 Regulation of Rents or Lease Terms The statute governing commercial leases is mostly designed to protect the tenant’s interests. Even though many items are freely negotiable, important terms and conditions are subject to regulation, and any derogation from said regula - tion is forbidden, or at least limited. The most common relevant items are as follows: • the duration of a regular commercial lease will be at least nine years; • allocation of charges – the landlord will pro - vide the tenant with a limited list of repayable service charges;
• allocation of works – certain types of work, such as structural work, may not be charged to tenants; • the assignment of the lease by the ten - ant may be prohibited unless the lease is assigned to the purchaser of the tenant’s business; • subletting is prohibited, unless otherwise provided; • the tenant is entitled to renew its lease, which the landlord cannot deny unless the landlord pays an eviction indemnity (most of the time assessed by an expert before the court); and • termination clause – its triggering is subject to a specific process. 6.4 Typical Terms of a Lease The minimum term for a commercial lease is nine years (leases are rarely granted for more than 12 years due to tax implications – see 6.20 Registration Requirements ). Unless stipulated otherwise, the tenant has the right to terminate the lease at the end of each three-year period. Under the French Civil Code, expenses relating to the maintenance of the premises and major repairs are payable by the landlord if they relate to structural works listed under Article 606 of the French Civil Code (ie, those pertaining to load- bearing walls, vaults, entire roofs and beams). An extensive and precise list of works complet - ed during the last three years and those to be completed during the next three years must be drawn up and communicated to the tenant by the landlord upon signing the lease and thereaf - ter updated every three years. 6.5 Rent Variation Rent can be revised every three years at the request of either party, even if a formal rent review is not provided for in the lease.
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