Commercial property: definition, waiver, etc.
The commercial property allows the holder of a commercial lease to obtain its renewal or, where applicable, the payment of an eviction indemnity in compensation for the damage suffered. Commercial property is, therefore, a device that protects the merchant in order to allow him to stay in the premises at the end of his lease contract. Learn which FACTORS AFFECTING COMMERCIAL PROPERTY VALUE in this article below;
What is commercial property?
Commercial ownership is a mechanism that applies to commercial leases and in the context of a change of ownership during a commercial lease. As a reminder, the commercial lease, also called 3-6-9 lease, is a rental contract binding a lessor and a tenant carrying out a commercial activity in the leased premises. A commercial, industrial or artisanal fund could be exploited there. This provision is enshrined in article L145-1 of the French Commercial Code.
Warning! The commercial lease does not fall within the scope of certain professions such as the liberal professions. In this case, you can choose to opt instead for a professional lease or a mixed lease. In addition, if there is a change of owner, the tenants must be warned by an addendum to the lease contract during this change of ownership.
The commercial lease is essential for the business because it allows obtaining the right of access to stable premises, an important element to build customer loyalty. However, commercial leases are generally subject to a period of nine years, with the option of three-year termination for the lessee, or under certain conditions, by the lessor. However, six months’ notice must be observed.
In order to protect the merchant, the law has provided for the mechanism of commercial property which corresponds to the legal and regulatory provisions making it possible to regulate the conditions for setting the price of premises as well as conferring on the tenant a right to renew the commercial lease by tacit agreement or on a voluntary basis. In the absence of renewal of the lease, that is to say if the lessor refuses, eviction compensation will be paid to the lessee in compensation for the damage suffered.
The conditions for benefiting from commercial property
In order to benefit from the protection offered by commercial property, certain conditions must be met. The tenant must in fact:
- Hold a commercial lease intended for the operation of a business;
- Be registered in the trade and companies register (CRC or, failing that, in the trade’s directory when he requests his lease renewal request;
- Exercise their professional activity in the premises subject to the commercial lease contract;
- Effectively operate the business in the premises subject to the lease at the time of the request for renewal of the commercial lease and in the three preceding years;
Scrupulously respect the terms of the lease (no unpaid rents for example).
If the lessee meets all these conditions, then he can assert his commercial property right and request the renewal of his commercial lease from the lessor.
Good to know: The status of commercial property is of public order. This means that any tenant of a commercial lease is entitled to it.