What is a commercial lease?
The commercial lease contract allows the tenant to exercise a commercial, industrial or craft activity within the premises. Of a minimum duration of 9 years, the commercial lease can be concluded for a longer period, as soon as this is determined. The commercial lease contract is void if it stipulates a shorter duration. On the other hand, the tenant can give leave at the end of a period of 3 years (except contrary clause, in the case of leases of a duration superior to 9 years).
The initial amount of the commercial lease rent is freely set by the owner-lessor and his tenant. It depends on several elements, such as the location, the surface, the standing of the premises or the building, the nature and the number of authorized businesses or the existence or not of a door-step. The rental amount of the commercial lease can be revised by the owner-lessor every 3 years, without being able to exceed the change in quarterly difference index : for commercial or craft activities, this is theILC (quarterly index of commercial rents) while for tertiary activities, we speak of thePOPULATION (rent index for tertiary activities). The rent increase for the commercial lease is also limited, for one year, to 10% of the rent paid by the tenant during the previous year (only for commercial lease contracts concluded or renewed since September 2014).
The contract of commercial lease is opposed to the derogatory lease(also called a short-term lease). The total duration of a non-conforming lease cannot exceed 3 years, including renewal (2 for contracts renewed or signed before September 1, 2014). Unlike the commercial lease contract, no minimum duration is imposed for a non-conforming lease. The short-term lease is necessarily concluded when entering the premises of the tenant and the contract must clearly specify that the parties (owner-lessor and tenant) do not wish to be subject to the status of commercial leases. Finally, unlike the commercial lease, the derogatory lease contract does not give rise to the right to automatic renewal at the end of the lease, or to eviction compensation.
What type of premises is likely to be the subject of a commercial lease?
The commercial lease must relate to a building or premises. Concretely, this means that it must concern a stable and permanent real estate construction, so that the tenant can remain in possession of the premises during the entire commercial lease contract. Thus, an advertising space, an exhibition window or a parking area are not considered as premises and cannot be the subject of a commercial lease. Offices, shops, hangars, warehouses or even factories constitute premises which can be rented under a commercial lease.
In addition, the landlord and tenant must ensure that the premises are administratively assigned to the exercise of a commercial, industrial or craft activity. If this is not already the case, commercial leasing is prohibited. In order to comply with the legislation, when the premises have residential use, in particular, the lessor must change the use of the premises before entering into a commercial lease.
The authorization ofchange of use of the premises, issued by the mayor of the municipality in which it is located, is only required when it comes to transforming a residential area or in certain departments and large towns (more than 200,000 inhabitants). Formerly called authorization for change of use, it is not necessary to transform commercial premises into residential premises. The change of use of the premises is temporary and linked to the person requesting it.
What activity can be carried out in a commercial premises?
One of the main concerns of the tenant entering into a commercial lease must be the activity he wishes to carry on. Indeed, the commercial lease does not necessarily allow the exercise of any commercial activity in the premises.
As a general rule, the rent will be higher for a commercial lease that includes a“all shops” clauseonly for a commercial lease authorizing only a defined activity. In the case of a commercial lease “all businesses”, the tenant does not need to obtain the authorization of his lessor to change activity, as long as he respects the assignment (use) of the premises.
When the commercial lease contains aclause fixing the activity carried out within the premises, the change of activity is much more complex, since it requires the authorization of the owner-lessor. This is issued via a despecialization procedure for the commercial lease (partial if it involves an addition of complementary activities or full, in the case of a total change of activity). Thus, for the tenant uncertain of the continuity of his original activity, it is preferable to sign a “all businesses” lease, in order to be able to freely change professional activity during the commercial lease.
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