How should you read and negotiate a French commercial lease before committing?

Three essential points

• The lease must permit the business you actually intend to carry on. An overly narrow permitted-use clause can prevent diversification or a transfer of the business.
• Calculate the overall cost. Add service charges, recoverable taxes, works and funds tied up as security to the rent.
• Plan your exit from the outset. Any fixed commitment period, notice of termination, assignment and reinstatement obligations determine your future flexibility.

The landlord is the person who lets the premises; the tenant rents them. The permitted use describes the activities authorised by the agreement. A mandatory rule applies despite a clause to the contrary. The French procedure known as déspécialisation allows the activities specified in the lease to be extended or changed, subject to conditions.

A practical example

Fictional example. You are considering a shop where products will also be prepared on site. The rent seems attractive, but the draft lease permits sales only and makes you responsible for “all works”. Before signing, you have the permitted preparation activities, the feasibility of an extraction system and the allocation of responsibility for works clarified. You also calculate property tax and service charges. The negotiation therefore addresses the conditions that will actually allow you to operate.

1. Do the premises and permitted use allow you to carry out your project?

Start by checking that the agreement is indeed subject to the French statutory commercial lease regime. This regime applies, in particular, to premises in which a commercial or craft business is operated, subject to the statutory conditions. The title of the document alone does not settle the question.

Next, examine the description of the premises: floor area, storage space, parking, access, equipment and common areas. A terrace that has been used for a long time is not necessarily included in the lease or authorised by the relevant authorities.

The permitted-use clause requires precise drafting. Does “sale of food products” cover preparation on site, consumption on site or delivery? The tenant seeks flexibility that allows the business to grow. The landlord wants to control nuisance, alterations and the use of the building.

The owner's consent does not replace planning permissions, the rules governing a jointly owned building under the French copropriété regime or requirements specific to the business. Have the feasibility of essential installations checked before committing. The landlord must, in particular, deliver premises suitable for the agreed use; a clause accepting the premises in their existing condition therefore requires careful review.

During the lease, adding a related or complementary activity is subject to a specific procedure. A more substantial change is subject to other conditions: do not confuse a statutory possibility of changing the permitted activities with an immediate freedom to change your business.

2. What does a “3-6-9” lease really mean?

A commercial lease is, in principle, granted for at least nine years. The tenant generally has the right to leave at the end of each three-year period, with at least six months' notice. Notice of termination at a three-year break date may be given by registered letter with acknowledgement of receipt or by a formal document served by a French judicial enforcement officer (commissaire de justice).

However, this right may be excluded by agreement for certain leases: those lasting more than nine years, premises built for a single use, premises used exclusively as offices and certain storage premises. Other special regimes also exist. The landlord, for its part, does not have a general right to recover possession every three years: its rights are subject to specific rules.

Check the commencement date, the first break dates and any fixed commitment period. A rent-free period during works does not necessarily postpone the start of the lease.

The end of the nine-year term does not automatically terminate the agreement. Without notice of termination or a request for renewal, the lease continues by tacit extension. This extension is not a renewal. During this period, notice must, in particular, be given at least six months in advance and take effect on the last day of a calendar quarter; the required form must also be checked.

The right to renewal depends on the relevant conditions being met. A refusal by the landlord generally gives rise to an entitlement to compensation for non-renewal, subject to exceptions. These issues require a separate analysis as the end of the term approaches.

3. How should you assess the rent, changes to it and the guarantees?

The initial rent is, in principle, freely agreed. Compare amounts on the same basis: annual or monthly, exclusive or inclusive of taxes, with or without service charges. Also negotiate any rent-free period, stepped rent and the treatment of periods when works are carried out.

Indexation is a contractual adjustment linked to an index. It differs from the statutory three-year rent review, which requires a request and is subject to its own conditions. Check the index appropriate to the activity, the reference quarter, the frequency and the formula. The ILC is the French commercial rent index; the ILAT applies to tertiary-sector activities within its scope.

Since the May 2026 reform, Article L. 145-38-1 expressly allows, for premises used for commercial purposes, symmetrical limits on upward and downward annual movements in the ILC. A clause limiting only decreases must not be treated as equivalent to such symmetrical limits.

Cash flow also matters. For premises intended for retail or wholesale trade or for the provision of commercial or craft services, monthly payment of rent is now a right on request, provided there are no rent or service-charge arrears that have not previously been disputed. The request takes effect from the next payment due date.

For the same premises, leases entered into or renewed on or after the promulgation of the Law of 26 May 2026 are subject to a cap of one quarter's rent on sums paid as security. The legislation also regulates other guarantees requested. The deposit, suretyship and bank guarantees must therefore be reviewed together, instead of reusing an old template.

At the end of the lease, the new rules provide, in particular, for the return of sums paid as security within three months and the release of other guarantees within six months, subject to the applicable conditions and transitional provisions.

For guarantees that remain negotiable, specify their amount, duration and the conditions for calling on and releasing them. A personal guarantee directly binds the person who gives it.

4. Who bears service charges and the cost of works?

The lease must contain a precise inventory of the categories of service charges, taxes, duties and fees, and how they are allocated. Ask for the latest statements and supporting documents: a monthly advance does not guarantee the final amount.

For leases covered by the regime introduced in 2014, Article R. 145-35 prohibits, in particular, charging the tenant for the major repairs referred to in Article 606 of the French Civil Code and the associated professional fees. This legal category covers structural elements in particular; it does not simply mean any expensive building project. Works addressing deterioration with age or compliance requirements are also excluded where they fall within this category of major repairs.

Responsibility for other works may be allocated by agreement, subject to the landlord's obligations. Distinguish the initial fit-out, routine maintenance, works to meet applicable standards and reinstatement at the end of the lease. Specify who commissions, funds and formally accepts the works, as well as the consequences of delay.

The lease may make the tenant responsible for property tax: reimbursement is not automatic. However, under the applicable regime, the landlord's rent management fees and, in a property complex, expenses attributable to vacant premises or other tenants cannot be passed on to the tenant.

The landlord must also provide the statements of past and planned works required by law. A condition report prepared jointly with both parties must be arranged on entry and when the premises are returned. Dated photographs and equipment records reduce disputes.

5. What should you provide for when assigning the lease or dealing with a breach?

Assignment of the lease together with the business must be distinguished from assignment of the leasehold right alone. A clause cannot prohibit the tenant from assigning the lease to the purchaser of the business. However, contractual formalities may govern the transaction and must be followed. Assignment of the leasehold right on its own may be more restricted.

If the assignor guarantees its successor's obligations, check the scope of that commitment: the landlord may invoke the guarantee provided for in Article L. 145-16-2 only for three years from the assignment.

A termination clause provides for the lease to end in the event of a specified breach. It takes effect only one month after a formal demand that states this time limit has remained unremedied. Suspension by the court is not automatic. Since May 2026, for the applications concerning unpaid amounts to which the new rules apply, suspension requires, in particular, the ability to settle the debt and the resumption of full payment of the ongoing rent before the first hearing.

How should you prepare for the negotiation?

1. Gather the documents: draft lease, annexes, plans, rules governing the jointly owned building, service charges and information about works.
2. Cost three scenarios: setting up, normal operation and early departure at the first available break date.
3. Rank your requests: essential feasibility requirements, significant financial risks and desirable flexibility.
4. Have the agreements incorporated into the contract, with dates, amounts and an explicit allocation of responsibilities.

Frequently asked questions

Is a lease exempt from the statutory regime simply a shorter commercial lease?

A French short-term lease known as a bail dérogatoire falls under a separate regime that allows the parties, subject to conditions, to depart from the statutory commercial lease regime for a maximum total period of three years. Its expiry and continued occupation of the premises must be monitored: they may result in a lease governed by the statutory regime coming into existence.

May I sublet part of the premises?

Subletting is prohibited in principle, unless the lease provides otherwise or the landlord agrees. Where it is authorised, the owner must be invited to participate in the transaction in accordance with the applicable rules.

Scope of this article

This article provides general guidance on French law. The analysis of a lease depends, in particular, on its date, its renewals, the premises and the agreed terms. The example is fictional and does not describe any matter handled by the firm.

Please feel free to contact the firm to discuss your matter further.