In order to run their business, retailers need a place where they can reach potential customers. Unless he buys premises, the merchant will usually have to rent them. Signing a commercial lease will enable you to operate your business within “walls” made available to you by a lessor.
Commercial lease law governs the relationship between the owner of a commercial property (the lessor) and the lessee operating a commercial activity on that property (the lessee).
As a reminder, the lessor can be any natural or legal person who owns buildings, premises or sites.
This article focuses on the rules governing commercial leases for business owners. To this end, we’ve decided to reveal to you, the owner, the key points to be aware of when it comes to commercial leases.
1) What you need to know before signing a commercial lease
To validly enter into a commercial lease, you must ensure that you have the power and capacity to do so.
- You must be 18 years of age or over. If you are under guardianship, your guardian can sign a commercial lease on your behalf. However, to renew the lease, you will need the agreement of the family council or, failing that, the guardianship judge.
- When it comes to power, two situations stand out:
- If you are married under the legal regime of community of property or universal community, and the property is shared, you must seek your spouse’s written agreement, failing which the commercial lease will be null and void.
- If you are a usufructuary, you cannot enter into a commercial lease without the written agreement of the bare owner, on pain of nullity.
2) What you need to know when signing a commercial lease
- You are obliged to draw up an inventory of fixtures both when you take possession of the premises and when you return them.
- You’ll also need to draw up an inventory of rental charges and taxes, so that you and the lessee can agree on a breakdown.
- Lastly, you are obliged to inform the lessee of: the categories of charges, taxes and fees each year and whenever they are new, as well as any work carried out or to be carried out. In the interests of transparency.
3) What you need to know during your lease
- Early termination of the lease: the minimum term of a commercial lease is 9 years. However, you can give the lessee notice to quit after 3 years in the event of work or demolition, or if the commercial lease contains a resolutory clause, or if the two parties agree otherwise.
- On the lessee’s total change of activity: possibility of objecting on serious and legitimate grounds, particularly if this is likely to compromise your interests.
- On subletting: you are advised to oppose subletting directly by means of a specific clause included in the commercial lease contract. If necessary, you can refuse the sublease at a later date. If the sublease is irregular (against your agreement, but nevertheless carried out), you can terminate the main lease and obtain payment of the rent received by your tenant.
- Refusal to renew the lease: if you decide to refuse to renew the tenant’s lease, you will have to pay him eviction compensation (a sum of money), unless you can prove a serious and legitimate reason.
- On the possibility of revising rents: you will be able to modify the amount of rent every 3 years or through specific clauses.
All these factors lead us to believe that, as an owner, you need to take the time to think about the commercial lease agreement you wish to enter into. We can help you define your needs, provide you with legal protection when drafting the commercial lease, and assist you during the term of the lease.
