In an article published in JurisHebdo (No1053, May 2026), Géraldine Machinet, a partner in Franklin’s Real Estate Department, analyses the impact of the Simplification Act on commercial leases and retail planning. She examines the new developments affecting the status of commercial leases under Articles L. 145-1 et seq. of the French Commercial Code, the streamlining of the commercial operating authorisation regime, and the new planning rules applicable to commercial and industrial projects
Monthly Rent Payments as a New Mandatory Right
New Article L. 145-32-1 of the French Commercial Code makes monthly rent payments a legal right where the tenant requests them. It applies to retail or wholesale activities and to commercial or craft-related services, provided that there are no undisputed rent arrears. Industrial activities are excluded. As a mandatory provision, the rule applies to existing leases. A tenant disputing service charges must therefore formalise its dispute before making such a request.
The “Tunnel” Clause on the Commercial Rent Index Finally Secured
Article L. 145-38-1 permits clauses limiting the annual variation of the Commercial Rent Index, by way of derogation from Article L. 112-1 of the French Monetary and Financial Code, provided that they operate in the same proportions both upwards and downwards. Symmetry between the cap and the floor is an essential condition for their validity.
Guarantees Capped at One Quarter’s Rent
Article L. 145-40 caps the sums paid by way of security at one quarter’s rent for tenants benefiting from monthly rent payments. The cap also applies to independent guarantees and parent-company guarantees. The Act also governs their repayment, providing for repayment within three months after the keys have been handed over, with a six-month period applying to other guarantees. It also provides for their transfer to the new landlord in the event of a transfer of ownership. These rules apply to leases entered into or renewed after the Act was enacted.
Termination Clauses: Payment Extensions More Difficult to Obtain
The tenant must now demonstrate its ability to pay the rent arrears and must have resumed full payment of the current rent before the first hearing in order to obtain a payment extension or the suspension of the termination clause under Article L. 145-41. This rule applies to applications filed after the Act entered into force.
Pre-emption Right: A Statutory Definition of Commercial and Craft Premises
Article L. 145-46-1 defines premises used for commercial purposes and premises used for craft activities. It excludes premises used exclusively as offices and warehouses, while including storage areas and adjoining locations. This clarification could broaden the scope of the pre-emption right for mixed-use premises.
Commercial Operating Authorisations: A Streamlined Regime
The Act introduces new exemptions from the authorisation requirement, including the temporary transfer of retail space in an activity zone undergoing redevelopment, the relocation of retail space within the same shopping complex, and transfers within ORT areas. It also requires the CDACs to provide full reasons for their refusals, thereby making it easier to challenge them.
Géraldine Machinet’s Analysis: Significant Litigation to Come
According to the lawyer, like the 2014 Pinel Act, this Act is likely to generate significant litigation. Landlords may therefore be even more vigilant regarding the tenant’s solvency when the lease is signed.
Read the article in JurisHebdo
Are you a landlord, tenant or retail operator seeking to anticipate the effects of the Simplification Act on your leases? Contact Franklin’s Real Estate team.
