The quarterly publication of the tertiary activities rent index (indice des loyers des activités tertiaires, ILAT) sets off a constrained sequence for an institutional landlord holding a portfolio of offices, logistics warehouses or premises occupied by liberal professions: check the validity of the clause, calculate the change over the correct reference quarter, serve notice, collect, then hold the position against a challenge from the tenant. The most costly error does not concern the rate: it concerns the clause itself, which a well-advised tenant will have deemed unwritten (réputée non écrite) for the whole lease. This guide sets out the complete chain from the landlord's side: scope of the ILAT, validity of the indexation clause, interaction with the three-yearly rent review and the review for a change of more than a quarter, capping on renewal, and the timetable of challenges open to the tenant.
Reading the index before serving notice: source, reference quarter, scope of the change
The ILAT is published by INSEE (the French national statistics institute). For an institutional landlord, two reflexes determine how robust the indexation notice is.
First reflex: use only the value published by INSEE for the quarter concerned, as it appears in the notice published in the Journal officiel, and not a value taken from a secondary source or an online comparison tool. The series are subject to successive publications and the reference to the quarter must be exact to the letter in the letter sent to the tenant. An indexation calculated on an erroneous index exposes the landlord to a refund claim and, above all, to a debate on the landlord's good faith in applying the clause.
Second reflex: the reference quarter is the one the lease designates, not the one that property management finds convenient. The standard clause in a tertiary lease fixes a base index (the reference quarter at signature) and a comparison index (the same quarter, one year later). Management teams are repeatedly tempted to substitute for the contractual quarter the latest index published at the due date, in order to capture a more favourable change. This substitution is not a calculation shortcut: it alters the period of change taken into account and brings the clause within the scope of Article L. 112-1, paragraph 2, of the French Monetary and Financial Code.
A methodological point, too often overlooked in portfolios with older leases: the temporary measure limiting index changes adopted in 2022 targeted a specific scope of tenants and index. It must not be transposed by analogy to an ILAT indexation without checking its exact scope and period of application. Before any mention in a notice, this check must be made with the text to hand.
The ILAT is not the office index: the real scope of the tertiary index
The most widespread confusion consists in presenting the ILAT as the index for office leases. The legal scope is both wider and more precise.
Article L. 112-2 of the French Monetary and Financial Code deems to be directly related to the purpose of an agreement concerning a building any clause providing, for activities other than those referred to in the first paragraph and for activities carried on by liberal professions, for indexation on the change in the ILAT. The first paragraph, for its part, covers commercial or craft activities defined by decree, to which the commercial rent index corresponds.
Article D. 112-2 of the same Code, in the wording resulting from Decree No. 2011-2028 of 29 December 2011, settles the allocation:
The activities referred to in the second paragraph of Article L. 112-2 are tertiary activities other than the commercial and craft activities referred to in the first paragraph of this Article. They include in particular the activities of liberal professions and those carried on in logistics warehouses.
Three operational consequences for a landlord.
First, the criterion is the tenant's activity, not the physical nature of the premises. Office premises occupied by a company carrying on a commercial activity do not automatically fall within the scope of the ILAT merely because of their layout. The analysis is based on the contractual use and the activity actually carried on.
Second, logistics warehouses fall expressly within the scope of the tertiary index, which is of direct interest to funds holding courier or distribution assets. The classification as a “logistics warehouse” is assessed by reference to the actual operation, and not the land registry nomenclature alone.
Finally, the text of D. 112-2 currently in force no longer contains the exclusion, found in the earlier wording, of premises used exclusively as offices from the scope of the commercial index. A lease drafted on an old model that relied on this exclusion to justify the clause rests on an obsolete textual basis. This point warrants a document audit of leases signed before 2012 and continued since.
The indexation clause in the tertiary lease: three points of failure
Annual indexation is contractual. It does not derive from the commercial lease statute but from the sliding-scale clause (clause d'échelle mobile) stipulated in the lease. Its fragility is concentrated in three points.
Distortion between the index period and the review period
Article L. 112-1, paragraph 2, of the French Monetary and Financial Code lays down the rule:
Any clause in a contract performed over time, and in particular in leases and lettings of any kind, providing for the taking into account of a period of index change longer than the time elapsing between each review, is deemed unwritten.
For an annual indexation, the period of index change must therefore be twelve months. Two configurations create the distortion. The first, the more classic: the first indexation is calculated over a period longer than one year, because the base index used precedes the comparison index by more than four quarters, often because of a gap between the date of signature and the date of entry into occupation. The second, more insidious: the clause provides that indexation operates only upwards, or that it is neutralised in years when the index falls, while the base index remains frozen. When the index rises again, the lease then mechanically produces an index change covering several years for a single review.
The sanction is that the clause is deemed unwritten, which operates automatically. The exact extent of this sanction, whether the whole clause or only the distorted year, and the regime for refunding sums collected are matters for case law and are not settled by the texts. For an institutional landlord, the reasoning must therefore be based on maximum exposure: a distorted clause is treated as a refund risk covering the whole chain of subsequent indexations, and not as a simple adjustment of a single due date. The regime of this sanction and the refund of indexations paid are analysed in our article on the sliding-scale clause deemed unwritten.
The clause stipulated solely for the landlord's benefit
A clause that operates only upwards raises a second problem, distinct from distortion: it breaks the reciprocity inherent in a sliding scale. Prudence requires, in new leases as in amendments, stipulating an indexation operating in both directions, with a rolling base index and comparison index, so that each annual review covers exactly four quarters of change.
Clauses that defeat the statutory rent review regime
Article L. 145-15 of the French Commercial Code, in the wording in force since 28 May 2026 resulting from Law No. 2026-403 of 26 May 2026, deems unwritten clauses, stipulations and arrangements that have the effect of defeating the right to renewal established by this chapter or the provisions of Articles L. 145-4, L. 145-32-1, L. 145-37 to L. 145-41, the first paragraph of Article L. 145-42 and Articles L. 145-47 to L. 145-54.
The block L. 145-37 to L. 145-41 covers the whole of the review regime. A clause that would prevent the tenant from requesting the three-yearly review, or that would exclude in advance the review for a change of more than a quarter, is therefore without effect. Portfolio tertiary leases still contain such stipulations, sometimes inherited from models predating 2014. They do not protect the landlord: they give a false sense of security about the rental trajectory.
Annual indexation and three-yearly review: two timetables not to be confused
Contractual indexation operates on the anniversary date provided for in the lease, without any court formality. The statutory review follows a different regime, laid down by Article L. 145-37 of the French Commercial Code, which opens the review at the request of either party subject to Articles L. 145-38 and L. 145-39.
The time limit and the effective date (L. 145-38)
Article L. 145-38 governs the timetable:
The request for review may be made only at least three years after the date on which the tenant entered into occupation or after the start of the renewed lease. The rent review takes effect from the date of the request for review. New requests may be made every three years from the day on which the new price becomes applicable.
Since Law No. 2014-626 of 18 June 2014, applicable to contracts entered into or renewed from 1 September 2014, the effective date is therefore the date of the request. The rule is symmetrical and fatal for a landlord who is late: each month of delay in serving notice is a month of rental differential lost for good. There is no retroactivity to the end of the three-year term.
The form of the request (R. 145-20)
Article R. 145-20 requires that the request for review be made by extrajudicial act or by registered letter with acknowledgement of receipt and that it state, on pain of nullity, the amount of the rent requested or offered. The new price is due from the day of the request. The steps and formalities of the request are covered separately in our guide to the three-yearly review of commercial rent.
Two points of vigilance. Omission of the amount is sanctioned by nullity: a request drafted in general terms, or referring to a calculation in an annex without a figure, is ineffective and does not stop the time limit running. In addition, Decree No. 2014-1317 of 3 November 2014 removed from this Article the parties' ability to agree an earlier or later effective date. Template letters that still propose a negotiated effective date rely on a repealed text.
The cap on the three-yearly review and its only exception
Article L. 145-38 provides, notwithstanding the provisions of Article L. 145-33, that the increase or decrease in rent following a three-yearly review may not exceed the change in the quarterly commercial rent index or the quarterly tertiary activities rent index that has occurred since the last agreed or judicial fixing of the rent.
The index-based cap is therefore the principle, and the same text strictly limits the exception: there must be proof of a material change in the local factors of commerciality having in itself caused a change of more than 10% in the rental value. The wording is demanding on three cumulative points: a material change, relating to the local factors of commerciality, having in itself produced the quantified effect. A frequent error is to transpose here the formula for renewal, which refers to a significant change in the elements mentioned in 1° to 4° of Article L. 145-33. This is not the same standard, and a pleading built on the wrong formula is bound to fail.
Where the proof is provided, the same Article adds smoothing: the resulting change in rent may not lead to increases of more than 10% of the rent paid in the previous year, for any one year. A successful three-yearly lifting of the cap therefore does not produce an immediate catch-up but a staggered one.
Finally, an uncertainty must be acknowledged. The interaction between annual contractual indexation and the three-yearly review, in particular the question whether an intermediate indexation constitutes an “agreed fixing of the rent” starting a new time limit, is not settled by the texts. It is a matter for case law and, within a portfolio, should be treated as a point of arbitration to be secured file by file rather than as an established rule.
The review for a change of more than a quarter (L. 145-39): a double-edged weapon
Article L. 145-39 opens a derogatory route:
In addition, and notwithstanding Article L. 145-38, if the lease includes a sliding-scale clause, a review may be requested whenever, through the operation of that clause, the rent is increased or decreased by more than a quarter compared with the price previously fixed by contract or by court decision.
Two lessons for a landlord of offices or warehouses whose rents have been taken far above the original price by years of cumulative indexation.
First lesson: the text works both ways. A tenant whose rent has risen by more than a quarter under the effect of the ILAT may request a review, and Article R. 145-22 provides that the court adapts the operation of the sliding scale to the rental value on the day of the request. In an office market where the rental value of the asset has deteriorated, for example in a non-renovated peripheral building, the review under Article L. 145-39 is a tool for reducing rent, used against the landlord. Cumulative indexation itself creates the condition for bringing the action.
Second lesson: since the Law of 18 June 2014, this review is also smoothed. The second paragraph of L. 145-39 provides that the change in rent resulting from this review may not lead to increases of more than 10% of the rent paid in the previous year, for any one year. The still widespread reading, according to which the review for a change of a quarter would be free of any annual cap, reflects the law as it stood before 2014.
Article R. 145-22 adds a rule that is useful in portfolio management: if one of the elements used to calculate the sliding-scale clause ceases to exist, the review may be requested and pursued only under the conditions of Article L. 145-38. Every ILAT clause must therefore anticipate the disappearance or rebasing of the index, failing which the landlord is brought back to the ordinary three-yearly regime.
Renewal: index-based cap, reference quarter and the twelve-year threshold
On renewal, Article L. 145-34 provides that, unless there is a significant change in the elements mentioned in 1° to 4° of Article L. 145-33, the rate of change in the rent applicable when the lease to be renewed takes effect, if its term is not more than nine years, may not exceed the change in the ILC or the ILAT that has occurred since the initial fixing of the rent under the expired lease.
Three rules must be taken up as they stand when preparing the renewal of an office lease.
The first concerns the reference quarter. Where there is no contractual clause fixing the reference quarter of the index, the change in the quarterly commercial rent index or the quarterly tertiary activities rent index must be taken into account, calculated over the nine-year period preceding the latest published index. And where renewal takes place after the date originally scheduled for expiry of the lease, the change is calculated from the latest published index, for a period equal to the time that has elapsed between the initial date of the lease and the date of its actual renewal.
The second is a timing lever often under-used on the landlord's side: the cap ceases to apply where, by the effect of tacit extension, the term of the lease exceeds twelve years. Letting the tacit extension run is therefore a strategy, to be weighed against the change in the rental value of the asset and the risk of the tenant leaving. On the calculation of the effective term and the determination of the rental value, see our article on lifting the cap on commercial rent after twelve years.
The third is smoothing. In the event of a significant change in the elements in 1° to 4° of L. 145-33, or where an exception is made to the capping rules as a result of a contractual clause relating to the term of the lease, the resulting change in rent may not lead to increases of more than 10% of the rent paid in the previous year, for any one year.
One point must be treated with caution. Article L. 145-36 refers to a decree for the elements used to determine the price of leases of premises used exclusively as offices, and Article R. 145-11 provides that this price is fixed by reference to the prices charged for equivalent premises, subject to correction for the differences found between the leased premises and the reference premises, the second and third para
Quatre questions suffisent à situer votre position, le délai qui vous reste et ce qu'il faut vérifier en priorité. Vous décidez ensuite si vous en parlez au cabinet.
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