Commercial lease renewal after 9 years: 2026 guide

Nine-year commercial leases come to an end and raise concrete questions for tenants and landlords alike. Can the shopkeeper obtain a new lease automatically? On what conditions may the owner oppose renewal? What time limits must be observed and what remedies are available? This guide details the rules on renewal of commercial leases, the statutory exceptions, the procedure to follow and the pitfalls to avoid in order to secure your position.

The principle of the right to renew a commercial lease

Legal basis of the right to renewal

Article L. 145-8 of the French Commercial Code lays down the fundamental principle: every tenant operating a commercial or craft business has a right to renewal of its commercial lease on expiry of the 9-year period. This protective rule aims to preserve the value of the business (fonds de commerce), an intangible asset attached to the clientele and the location.

The right to renewal applies where three conditions are met: the existence of a commercial lease subject to the commercial lease statute, the actual operation of a commercial or craft business, and completion of the minimum 9-year period of occupation. This statutory protection applies even if the initial lease provided for a fixed term without automatic renewal.

Conditions for application of the protective statute

To benefit from the right to renewal, the tenant must personally operate its commercial or craft business in the leased premises. Operation through an intermediary or complete sub-letting of the commercial premises forfeits the benefit of this protection. The case law of the Cour de cassation requires real and continuous operation, not merely formal operation.

The 9-year minimum is assessed at the date of expiry of the lease, even if it continues by tacit renewal (tacite reconduction). A shopkeeper who has occupied the premises for 8 years and 10 months at the contractual expiry date cannot invoke the right to renewal, unless it waits for the full statutory period to end.

Registration with the Trade and Companies Register or the trades directory is not a condition of the right to renewal, but it makes it easier to prove operation of the business. Regulated liberal professions do not benefit from the commercial lease statute except in specific cases (pharmacies, tobacconists).

Exceptions to the right to renewal

Refusal of renewal on legitimate and serious grounds

Article L. 145-17 of the French Commercial Code allows the landlord to refuse renewal on legitimate and serious grounds. This notion, developed by case law, mainly covers serious breaches by the tenant of its contractual obligations: non-payment of rent, damage to the premises, failure to respect the permitted use, operation contrary to public morality or public policy. The grounds for refusal without indemnity and the way in which the tenant secures its indemnity are examined in our article on non-renewal of a commercial lease.

Legitimate and serious grounds are assessed rigorously by the courts. A mere occasional late payment is not enough: an established and repeated default is required. Unauthorised alteration of the premises may justify refusal if it fundamentally alters the building or harms other occupants.

The landlord must notify its refusal in the form and within the time limits required by law. Failure to notify within the 6 months preceding expiry prevents refusal of renewal, even where there are legitimate grounds. This rule protects the tenant against dilatory manoeuvres.

Recovery for construction, reconstruction or raising the height of the building

The owner may refuse renewal in order to carry out works of construction, reconstruction or raising the height that require the tenant to vacate. This exception requires a serious and achievable project, not merely a vague intention to make improvements.

The works relied on must be of such a scale that they require the premises to be vacated completely for a significant period. Mere refurbishment or fitting-out works, even substantial ones, do not justify refusal of renewal if they can be carried out while the tenant remains in occupation.

The court checks the reality of the construction project in light of the administrative authorisations obtained, the funding available and the technical coherence of the programme. A project abandoned after the tenant's eviction may engage the landlord's liability and give rise to substantial damages.

Recovery for the landlord's personal residence

A landlord who is a natural person may recover the premises for its personal residence or that of its spouse, ascendants or descendants. This strictly framed exception applies only to premises capable of residential use and subject to strict conditions of form.

Recovery for personal residence requires actual and lasting occupation of the dwelling by the designated beneficiary. Occasional use or re-letting within 3 years following recovery amounts to fraud, penalised by an award of damages to the evicted tenant.

This exception does not operate in favour of legal entities, even of a family nature. Only a landlord who is a natural person may invoke it, which considerably limits its practical scope for commercial premises.

The procedure for requesting renewal

Initiative and time limits for the request

The request for renewal may come from the tenant or the landlord within the 6 months preceding expiry of the lease. This period runs until the last day of the initial lease, even if it continues by tacit renewal. Failure to make a request within this period permanently forfeits the right to renewal.

The tenant has an interest in taking the initiative of the request in order to control the timetable and negotiate the terms of the new lease. Failing that, the landlord may make an offer of renewal on the terms it intends to impose, notably a rent revised upwards.

Article L. 145-10 of the French Commercial Code requires notification by bailiff's instrument (acte d'huissier) or by registered letter with acknowledgement of receipt. A mere verbal request or one sent by ordinary post has no legal existence. Strict compliance with the formalities conditions the validity of the procedure.

Mandatory content of the request

The request for renewal must state the full identity of the parties, the exact description of the premises concerned, and the terms desired for the new lease. Omission of essential elements may vitiate the request and require it to be regularised within tight time limits.

As to rent, the applicant states either that the current rent is to be maintained or the amount desired in the event of revision. The request may cover the term of the new lease, service charges and ancillary conditions, and the allocation of maintenance and repair works.

A landlord who takes the initiative of the request must propose a complete draft lease or, at a minimum, all the terms it intends to change. A request that is imprecise on essential elements risks being held inadmissible.

Reply of the recipient and consequences

The recipient of the request has 3 months to reply from notification. Silence during that period amounts to acceptance of the terms proposed and results in formation of the new lease on the terms requested.

The reply may be a straightforward acceptance, an acceptance with counter-proposals on certain points, or a reasoned refusal. A refusal that is not reasoned or is based on insufficient grounds amounts to acceptance and binds the landlord definitively.

In the event of continuing disagreement on the terms of renewal, the more diligent party may apply to the court to have the dispute determined. That application must be made before the expiry of the 2-year period following the initial request, on pain of lapse (caducité).

Setting the rent of the renewed lease

Principle of capped rent variation

Article L. 145-33 of the French Commercial Code limits the variation of rent on renewal. The increase or decrease may not exceed the variation of the national commercial rent index (ILAT for craft activities, ILC for the others) occurring since the last contractual setting of the rent.

This protective rule avoids sudden increases that would compromise the economic viability of the business. It applies even if the initial lease provided for a different indexation clause or excluded rent revision.

The calculation is made by comparing the index of the reference quarter provided for in the contract (or that of signature, failing which) with the index corresponding to the renewal. The mathematical formula is binding on the parties and the court, except where the cap is lifted.

Exceptions to the cap: lifting the cap (déplafonnement)

The rent may be freely set by reference to market rental values if particular circumstances justify it. Article L. 145-34 lists these cases of cap lifting exhaustively: a notable change in the rental value of the premises, a change of activity by the tenant, or a contractual sliding-scale clause. The case of a lease that has lasted more than twelve years is dealt with separately in our article on lifting the cap on commercial rent after twelve years.

A notable change results from transformations affecting the characteristics of the premises (surface area, fittings, access) or their economic environment (commercial development of the area, creation of infrastructure). It must be objective and significant, not cyclical.

A change of activity is assessed against the activity carried on when the reference rent was set. A move from a bakery-patisserie to a clothing shop constitutes a change of activity justifying lifting the cap, unlike the evolution of a bakery into a bakery-sandwich shop.

Assessment of rental value where the cap is lifted

Where the cap is lifted, the new rent corresponds to the real rental value of the premises, determined by comparison with similar premises in the area. This assessment draws on several criteria: geographical situation, surface area and layout, condition of the premises, commercial quality of the location.

The property expert appointed by the court analyses the market references available: recent leases concluded in the same area, transfers of businesses including the lease, rent levels charged for comparable activities. The expert takes account of the specific features of the premises and their suitability for the activity carried on.

Rental value is understood exclusive of tax and service charges, in accordance with commercial practice. It includes the value of the fixtures incorporated in the premises (heating installations, sanitary fittings, permanent decorative elements) but excludes fittings specific to the tenant's business.

The tenant's rights in the event of refusal of renewal

The eviction indemnity: principle and calculation

Where the landlord refuses renewal without invoking legitimate and serious grounds, it must pay the tenant an eviction indemnity compensating for the loss suffered. This indemnity covers the loss of the leasehold right and re-installation costs, which are components of the business.

Article L. 145-14 of the French Commercial Code defines the eviction indemnity as full compensation for the loss caused by the failure to renew. It comprises the market value of the leasehold right, the cost of transferring the business to a new location, and the temporary loss of earnings linked to the move.

The amount of the indemnity is assessed at the date of actual eviction, taking into account the profitability of the business, its geographical situation and the prospects for development of the activity. A thriving business located in a dynamic commercial area generates a higher eviction indemnity than a struggling shop.

Methods of assessing the indemnity

The assessment of the eviction indemnity follows a method established by case law. The expert first calculates the market value of the business by reference to recent transfers of similar businesses, applying a multiple of turnover or profits according to the sector of activity.

The value of the leasehold right corresponds to the capitalisation of the rental advantage, that is, the difference between the rent paid and the market rental value. This method applies where the tenant benefits from a rent lower than market terms.

Re-installation costs include the costs of moving, of fitting out the new premises, of communication to the clientele, and of resuming operation. To this is added an indemnity for temporary loss of clientele during the transfer period, assessed on a flat-rate basis or on supporting documents.

The landlord's right of withdrawal

A landlord who refuses renewal may withdraw by paying the eviction indemnity fixed by agreement or by court decision. This option allows the owner to reassess its position once it knows the amount of the indemnity. The conditions for exercising this option and its effects are analysed in our article on the landlord's right of repentance (droit de repentir).

Withdrawal must take place within 15 days following notification of the agreement or judgment fixing the indemnity. After that period, the refusal of renewal becomes final and the tenant may require the premises to be vacated.

Exercise of the right of withdrawal entails an obligation to renew the lease on the terms fixed by the court or negotiated between the parties. The landlord may not unilaterally impose terms different from those initially proposed by the tenant.

Tacit renewal and its consequences

Principle of automatic extension

In the absence of notice regularly given by either party, the commercial lease is automatically extended by tacit renewal on the same terms as the initial contract. This extension is not a new lease but the continuation of the original contract.

Tacit renewal preserves all the rights and obligations of the initial lease, including special clauses on permitted use, works, or the terms of rent revision. It also maintains the security created for the landlord's benefit (guarantor, security deposit).

During the period of tacit renewal, the tenant continues to benefit from the protection of the commercial lease statute. It may in particular oppose any unjustified rent increase and maintain its right to assign or sub-let on the contractual conditions.

Duration and end of tacit renewal

Tacit renewal continues indefinitely as long as neither party gives notice or requests renewal. This situation may last several years without any change to the legal regime applicable to the lease.

The owner and the tenant alike may end tacit renewal by observing a 6-month notice period. This period runs from notification of the notice by bailiff's instrument or registered letter. Failure to observe the notice period postpones the date on which the notice takes effect.

Tacit renewal also ends through the exercise of the right to change the permitted use (déspécialisation), the transfer of the business, or termination for serious breaches by the tenant. In the latter case, the procedure follows the ordinary law rules on termination of contracts.

Impact on financial terms

The rent remains in principle identical to that of the initial lease throughout the period of tacit renewal. However, automatic indexation clauses continue to take effect in the manner provided for in the contract.

The landlord may request revision of the rent if a clause of the lease permits it and if the statutory conditions are met (variation of the reference index, change in service charges). This revision follows the rules of the current lease, not those of renewal.

Where the tenant carries out improvement works during tacit renewal, it cannot demand a reduction of rent on account of the expenditure (impense), save with the owner's express agreement before the works.

Frequently asked questions

Can a tenant who has been in occupation for 8 years request renewal of its commercial lease?

No, the right to renewal is acquired only after 9 complete years of operation of a commercial or craft business in the leased premises. This period is assessed at the expiry date of the initial lease, even if it continues by tacit renewal. The tenant must wait for the end of the ninth year to make its request for renewal under Article L. 145-8 of the French Commercial Code.

Can the landlord refuse renewal in order to sell the building to an investor?

A plan to sell is not a statutory ground for refusing renewal. The landlord may oppose renewal only on legitimate and serious grounds (breaches by the tenant), in order to carry out construction works requiring vacation of the premises, or to recover the premises for personal residential use. In all other cases, refusal gives rise to an eviction indemnity under Article L. 145-14 of the French Commercial Code.

What is the maximum time limit for applying to the court in the event of disagreement on the terms of renewal?

The parties have 2 years from the initial request for renewal to apply to the competent court. This limitation period (forclusion) applies even if negotiations between landlord and tenant continue. After that period, the request for renewal lapses and the parties lose the possibility of judicial recourse on the terms of the new lease.

How is the index variation applicable to the renewed rent calculated?

The variation is calculated by comparing the quarterly reference index set in the initial contract with that of the quarter preceding renewal. For a lease signed in 2015 with the ILC for the 2nd quarter of 2015 as reference (index 105.34), if the ILC for the 4th quarter of 2024 stands at 115.89, the variation is (115.89/105.34) - 1 = 10.01%. This variation caps the change in rent except where the cap is lifted as provided for in Article L. 145-34 of the French Commercial Code.

Does a seasonal business benefit from the right to renewal after 9 years?

Yes, if the tenant actually operates a seasonal business repeatedly over 9 consecutive years in the same premises. Intermittent but regular operation (seaside resort, ski resort) characterises a real commercial activity giving entitlement to the protective statute. Case law distinguishes organised seasonal operation from precarious or occasional occupation, which does not generate a right to renewal.

Is the amount of the eviction indemnity capped by law?

No statutory cap limits the amount of the eviction indemnity. It corresponds to full compensation for the loss suffered by the evicted tenant: value of the business, value of the leasehold right, re-installation costs, and temporary loss of clientele. For a thriving business in a prime location, the indemnity may represent several years of turnover. That prospect generally encourages the landlord to accept renewal rather than pay compensation.

Does transfer of the business during the renewal procedure forfeit the acquired right?

No, the transferee of the business automatically acquires the benefit of the pending request for renewal, subject to notifying the transfer to the landlord. This transmission takes place by operation of law with the business under Article L. 145-16 of the French Commercial Code. The new tenant may continue the procedure begun and benefit from the same rights as its predecessor, including in the event of an unjustified refusal of renewal giving rise to an eviction indemnity.