Commercial Lease: Definition, Rules, and Key Clauses for Renting a Space Safely
What is a commercial lease?
A commercial lease is a rental agreement for premises used for non-commercial business purposes. It primarily applies to regulated or independent professionals.
It is governed by Article 57A of the Act of December 23, 1986, which is available on the public service website and at Légifrance. Unlike the commercial lease, it is not governed by the provisions on commercial leases or by Article L145 et seq. of the Commercial Code.
A commercial lease is a flexible contract, governed largely by the Civil Code. This contractual freedom is both an advantage and a point of caution.
Who can sign a commercial lease, and for what types of businesses?
A commercial lease applies only to self-employed professionals.
In Paris's 16th arrondissement, for example, these might include:
- Doctors;
- Attorneys admitted to the bar;
- Architects;
- Independent consultants;
- Psychologists;
- Certified Public Accountants.
Good to Know : If the business conducted on the premises is commercial in nature and meets the conditions set forth in Article L145-1 et seq., the provisions governing commercial leases apply.
What is the difference between a professional lease, a commercial lease, and a special-case lease?
The main difference lies in the legal framework.
- A commercial lease grants the tenant the right to renewal and compensation for eviction in the event that the landlord refuses to renew the lease. It is entered into for a minimum term of 9 years.
- A commercial lease, on the other hand, is entered into for a minimum term of 6 years. It does not provide for automatic renewal or compensation for eviction.
- A short-term lease applies to a tenancy of less than 3 years.
Unlike a commercial lease, a professional lease offers more flexibility but less protection for the tenant.
How long does a commercial lease last, and how does the renewal process work?
The term of the commercial lease is set at a minimum of 6 years.
Upon expiration, the lease is tacitly renewed for the same term unless one of the parties gives notice of termination. The tenant may terminate the lease at any time with 6 months’ notice, by certified mail. Lease renewal is not legally automatic but often results from a tacit renewal.
What clauses must be included in a commercial lease?
A commercial lease agreement must specify:
- The identities of the parties;
- The intended use of the leased premises;
- Duration;
- The amount of rent;
- The terms for rent adjustments;
- Allocation of expenses;
- Obligations regarding maintenance and repairs;
- Terms of Cancellation.
Each clause must be drafted with precision. A clause that conflicts with legal provisions could be challenged in court.
How is the rent for a commercial lease set, and how is it adjusted?
The rent is determined by mutual agreement between the parties.
In Paris's 16th arrondissement, rental value depends in particular on:
- From the address;
- About the building;
- Surface area;
- An Overview of the Current Situation.
Rent adjustments may be indexed to the ILAT or the construction cost index.
A poorly drafted rent indexation clause creates a legal risk. The rent must remain consistent with the local real estate market.
Security Deposit: Is It Required, and How Should It Be Handled?
A security deposit is not required by law but is still common. The amount is often equivalent to one to two months’ rent. It serves as a guarantee for rent payments and any necessary repairs to the rental property. The lease agreement must specify the conditions for its return.
