Commercial lease: a provisional acceptance of renewal does not bind you definitively

Imagine the scene: you own a commercial property in Tours, Rue Nationale. Your tenant, a jeweller, asks you to renew the lease. You agree, by letter, to "move things along." Then, while checking his accounts, you discover that he is not actually carrying on a commercial activity: he sells mainly online, without any on-site clientele. Can you still withdraw your agreement? The answer is yes, according to a judgment of the Court of Cassation of 18 May 1971 (No. 70-10.647). This decision, still relevant today, protects landlords against premature acceptances. But careful: it does not allow everything. Analysis.

The facts: a story that happens every day

In Montlouis-sur-Loire, a certain Mr Ruscassie was the tenant of premises belonging to the Counord company. The lease was about to expire. Counord served a notice to quit (an act by which the landlord terminates the lease) on Ruscassie. The latter, considering that he was entitled to renewal, brought the matter to court. During the proceedings, Counord accepted the principle of renewal. But later, Counord changed its mind: it argued that Ruscassie did not fall within the scope of the Decree of 30 September 1953 (the status of commercial leases). Why? Because Ruscassie did not operate his premises in accordance with the requirements of the status: his activity did not generate its own clientele, an essential condition for benefiting from the right to renewal. The Court of Appeal ruled in favour of Counord, and the Court of Cassation confirmed. The acceptance of renewal, the judges said, is only provisional until the new lease is concluded. The landlord can therefore subsequently refuse if he proves that the tenant is not eligible for the status.

The reasoning of the court — explained

The legal basis is the Decree of 30 September 1953, which governs commercial leases. This text protects the tenant by granting him a right to renewal, subject to exceptions. But to benefit from it, the tenant must operate a business (fonds de commerce) in the leased premises. Here, Counord accepted renewal, then invoked the absence of a business. The Court of Cassation validates this change of mind. Why? Because acceptance of the principle of renewal is not a definitive contract. It is a simple negotiation. As long as the parties have not signed the new lease, each party can withdraw from its commitment if the legal conditions are not met. The judges distinguish two stages: the agreement on the principle (provisional) and the conclusion of the lease (definitive). Until the latter has taken place, the landlord retains the right to verify that the tenant fulfils the conditions of the status. Caution: this is not a blank cheque. The landlord must prove that the disputed letting does not fall within the scope of the Decree. He cannot refuse for an arbitrary reason. In this case, Counord demonstrated that Ruscassie had no clientele of his own. The decision is clear: provisional acceptance does not prevent the landlord from refusing renewal if the eligibility condition is not met.

What this means for you — practically

For landlord owners: you can accept renewal as a negotiation, but you are not definitively bound. If you discover that your tenant does not meet the conditions (for example, he sublets without permission, or his activity is fictitious), you can refuse renewal, as long as the lease is not signed. Concrete example: a landlord in Tours accepts renewal, then learns that the tenant has ceased activity for six months. He can refuse. For tenants: be wary of verbal or written acceptances from your landlord. As long as the lease is not signed, you are not protected. Check that you meet the conditions of the status before committing to works or investments. For purchasers of a business: ensure that the lease is current and that renewal has been definitively concluded. A simple promise of renewal can be challenged. Example with figures: in Montlouis-sur-Loire, a tenant invests €30,000 in fitting out the premises after a verbal acceptance. If the landlord withdraws, the tenant loses his investment, unless he can prove loss (which is difficult).

Four tips to avoid this type of dispute

• Never give written acceptance without checking the legal conditions. Before accepting renewal, the landlord must ensure that the tenant meets the conditions of the status of commercial leases (operation of a business, registration, etc.).
• Require a formal written document for any agreement. If you are a tenant, ask for the acceptance of renewal to be recorded in a notarial deed or a signed lease. A simple letter is not enough.
• Check the tenant's actual activity. The landlord may request supporting documents (Kbis extract, annual accounts) to prove that the business is being operated. If in doubt, carry out an investigation.
• Consult a lawyer before any decision. A professional will tell you whether you fall within the scope of the status. In Tours, Maître Zakine can help you analyse your situation.

Further reading: related case law and developments

This 1971 decision is a classic. It has since been confirmed. For example, the Court of Cassation held in 1998 that the landlord's acceptance of renewal does not amount to a waiver of the right to invoke the nullity of the lease (Civ. 3e, 18 March 1998, No. 96-14.128). Similarly, in 2005, it specified that the landlord may refuse renewal if the tenant has ceased activity, even after accepting the principle (Civ. 3e, 12 January 2005, No. 03-15.287). The trend is consistent: the agreement on the principle is revocable until the lease is signed. This protects landlords against dishonest tenants. But it requires tenants to secure their position quickly. In practice, the courts are strict on proof of eligibility. If you are a tenant, do not rely on a simple promise.

Checklist before acting

• Do I have a written document from the landlord accepting renewal? If so, is it a simple letter or a signed lease? A simple letter is precarious.
• Does my activity meet the conditions of the status? Check: operation of a business, registration, own clientele.
• Can the landlord prove that I am not entitled to it? If so, he may refuse renewal even after acceptance.
• Have I invested significant sums in reliance on the acceptance? If so, you may claim damages if the landlord withdraws abusively.

Are you in a similar situation? A first 30-minute consultation with Maître Zakine (€45) can save you months of proceedings — and often much more. Book an appointment →