The essentials of a commercial lease

When entering into a commercial lease, there are certain essential rules of public order that cannot be departed from. The first, the commercial lease, must be concluded for a minimum term of nine years. It may be concluded for a term of more than nine years, but never less than nine years. The lessee always has the option of terminating the commercial lease every three years, without having to justify his decision to the lessor.

The second rule is that the parties have the option of revising the rent every three years. In this case, the rent will be set at the rental value. But there are capping mechanisms. On this point, I refer you to the video on commercial lease renewal. The third essential rule is that the parties must draw up an inventory of fixtures at the start of the lease, and must also draw up a list of charges, taxes and fees that each party must then divide between them.

Fourth essential rule of public policy if you decide to insert a so-called resolutory clause in the commercial lease, i.e. a clause providing for the commercial lease to be terminated in the event of such a breach of contract. In this case, it should also be stipulated that the clause will only take effect one month later. Order to pay. Remain unsuccessful. A final rule of public policy applies if, in your capacity as lessor, you wish to sell the leased premises.

In this case, you must first submit the offer to the tenant, who has what is known as a right of preference. In this case, the tenant has one month to accept or refuse the offer. And if he accepts, the sale must take place within two months. Once a commercial lease has been signed, there are a number of documents that must be appended to the lease.

Firstly, the so-called RP Pollution Risk Statement, which must be appended to all leases entered into or renewed from 1ᵉʳ June 2006. Failing this, the tenant can either ask for the contract to be rescinded, or ask the judge to reduce the rent. Then there’s the PV energy performance diagnosis, which must also be appended to the commercial lease and must be appended to all leases for premises with a heating system.

However, there are no penalties for failing to provide an energy performance diagnosis. The parties therefore have the option of contractually waiving this deposit. In addition, TVA’s asbestos diagnostics must be made available to the tenant for the duration of the commercial lease. Finally, there are two other essential documents that must be appended to the commercial lease: an inventory of fixtures and fittings at the start of the lease, and an inventory of charges, taxes and fees, as well as their distribution between the lessee and the lessor.

During the period of administrative closure due to the parcel business pandemic, a number of tenants suspended payment of their rent. The landlords then sued their tenants for payment of the rent. The judges ruled in favor of the lessors. They ruled that neither force majeure, nor the performance of contracts in good faith, nor the exception of non-performance could legitimize the suspension of rent payments during the period of administrative closure.

The solution should be the same for imprecision. The Civil Code provides for unforeseen circumstances. This is the case when performance of the contract is rendered excessively onerous due to unforeseeable exceptional circumstances. At the time of contract conclusion. However, when it comes to foresight, judges have very recently handed down a decision concerning a commercial lease that contained a foresight clause.

This clause, known as “imprévision”, stipulated that if subletting the premises was no longer possible due to exceptional and serious circumstances, the tenant could suspend payment of rent until the month following the end of the disturbance. The judges ruled that the Covid 19 pandemic constituted a serious and exceptional circumstance. They agreed that the tenant would not pay rent during this period.

The difference is that, in this case, the contingency clause did not concern the performance of a monetary obligation, but the tenant’s ability to sublet the premises. It should be remembered that the revision clause is an essential clause in contracts, particularly commercial leases, and that it needs to be regulated.