Commercial Lease Renewal Rent Adjustment

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Commercial Lease Renewal Rent Adjustment

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Commercial lease renewal, rental value, rent review, commercial rent judge, variable rent clause, guaranteed minimum rent, locative value, commercial code Article L14533, commercial code Article L14534, rent alignment, commercial lease status, client base, commercial exploitation, rent freeze, commercial rents index, Cass Commercial, 3-6-9 lease, vintage audio equipment, commercial tourist area, turnover decline, contractual clause, rental value assessment, commercial neighborhood, Chamber of Commerce, rent reduction, lease renewal, rent fixation, commercial lease law

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Abstract

Understanding the rules governing commercial lease renewal rent adjustments under French law, specifically Article L.145-33 of the Commercial Code.

Is the lack of commercial exploitation to the public for a year likely to deprive it of the status of commercial leases? Is the notion of proper clientele called into question in its case?
Can the commercial lease continue to produce effect even without the obligation of exploitation of the property by the lessee?
Is the rent clause compatible with a request for rent revision? Can it rely on the decrease in rental value to demand a reduction in the minimum rent?
Can Mrs. Gloanec request a rent decontrol at the time of renewal of the lease on the grounds of a notable modification of the local characteristics or activity?
In the event that the shop is indeed reopened, would it be opportune to request a renewal with rent alignment on the actual rental value, including if it is lower than the base rent set by the rent clause?
Can the existence of a similar case in the adjacent gallery play in her favor, or is it a precedent without any binding legal value?

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[...] local commercial factors. Or, when the lease was concluded for a term exceeding 9 years or has been in effect for 12 years. Local commercial factors, are defined by article R.145-6 and concern the commercial interest of the neighborhood: importance of the city, attractiveness of the street, nature of the neighborhood, client flowelle, accessibilité, transports, as well as durable or temporary modifications to these elements. Finally, even when the de-indexing is admitted, the renewed rent increase cannot exceed 10% per year (Cass. [...]

[...] Can the tenant rely on the decrease in rental value to demand a reduction in the minimum rent? In law, the risThe rules applicable to rent clauses are specific. In fact, according to case law, the presence of such a clause in principle fails the legal mechanism of the rvision triennale and the power of review by the judge in the context of the renewal rent (Cass, Civ September 1999 - 97-22199). However, in the presence of a rent clause called 'binary', that is to say, with a fixed part and a variable part, the Court has ruled that it was possible to resort to the commercial rent judge to set, at the time of renewal, the minimum guaranteed taking into account the rental value (Cass. [...]

[...] His clientisThe lease is composed of enlightened amateurs and tourists. The lease contains a clause-recipe, providing a rent indexed on the turnover with a fixed minimum guaranteed rent, as well as a specific clause allowing, in the event of a decline in turnover of more than 25% over two consecutive years, to request an alignment of the rent on the rental value. Since 2021, the tenant has been experiencing a significant and lasting decline in their turnover 40% in 2021; - 36% in 2022) particularly due to the pandemic. [...]

[...] The lessor can request a rent decontrol at the time of lease renewal on the grounds of a notable modification of the local characteristics or activity ? According to Article L.145-33 of the Commercial Code, at the time of commercial lease renewal, the rent of the renewed leases must correspond to the rental value and is capped, meaning limited to the variation of theindex quarterly commercial rents (Article L.145-34 of the Commercial Code), in fact. To exclude this capping, it is up to the lessor to demonstrate the existence, during the expired lease, of a notable modification of one of the elements provided for in 1° to 4°° of Article L.145-33 of the Commercial Code (Cass. [...]

[...] The renewed rent must be set at the rental value, unless no notable modification of the legally targeted elements justifies a deplafonnement. According to the jurisprudence, if the real rental value is lower than the capped rent, it applies automatically to the benefit of the tenant, without the need to provide additional evidence (Cass. 3rd civ Dec n°02-11.374). The rental value then becomes a protective floor, to the benefit of the tenant. Furthermore, in the case of a lease with a binary revenue clause, the jurisprudence opis a distinction. [...]

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