Commercial Lease: What Matters is the Intended Use, Not the Actual Use (Cass. 1971)

Imagine: you are the owner of commercial premises on Rue des Gras in Clermont-Ferrand. You lease them to a craftsman for storing equipment, without a written lease. A few years later, he installs a counter and starts selling to the public. Today, he claims the status of commercial leases (special protection for traders) and a right to renewal. Did you really agree to a commercial lease?

This question was decided by the French Supreme Court on 19 February 1971: the nature of a lease depends not on the tenant's use of the premises, but on the intended use agreed by the parties. In other words, just because the tenant carries on a business does not automatically make the lease commercial. It is the common intention at the time of signing that counts.

This principle, established over fifty years ago, remains highly relevant today. It protects landlords against surprise reclassifications, but also requires tenants to prove the commercial nature of their lease. Full analysis below.

The facts: a story that happens every day

In 1969, the Paris Court of Appeal heard a dispute between a landlord and a tenant. The tenant occupied premises without a written lease. He carried on a commercial activity, but the landlord disputed that the lease was commercial. To benefit from the status of commercial leases (Law of 30 June 1926, which grants a trader a right to renewal of the lease and an eviction indemnity), the tenant had to prove that the lease was concluded for commercial use.

The tenant relied on his actual use of the premises: he sold goods, received the public. But the landlord argued that he never agreed to commercial use. The Court of Appeal ruled in favour of the landlord, holding that the proof of a commercial lease was not established. The tenant appealed to the Supreme Court.

Before the Supreme Court, the tenant argued that the judges should have examined the actual use of the premises to determine the nature of the lease. But the Court dismissed his appeal: the nature of a lease depends on the intended use agreed by the parties, not on the tenant's actual use. In the absence of proof of a common intention to give a commercial use, the tenant cannot claim the protective status.

The reasoning of the court — analysed

The Supreme Court relied on Article 1709 of the Civil Code (definition of a lease) and the Law of 30 June 1926 on commercial leases. It recalled that the status of commercial leases is exceptional: it derogates from the common law of leases (civil lease, governed by Articles 1713 et seq. of the Civil Code). To benefit from this protection, the tenant must show that the parties agreed on a commercial use.

In short, it is not the activity carried out that qualifies the lease, but the intention of the contracting parties. If the landlord leased for residential or storage purposes, even if the tenant sets up a business, the lease remains civil. However, note: if the landlord knew of the commercial activity and did not protest, this could be evidence of tacit acceptance. But in this case, the tenant did not prove that the landlord consented to a commercial use.

What few people know: this decision is a confirmation of constant case law. It does not innovate, but clarifies a point often misunderstood. undefined, I have seen cases where tenants believed that by opening a business, they automatically acquired a commercial lease. That is false. Without proof of the landlord's intention, the lease remains civil.

The lower court judges (here, the Paris Court of Appeal) therefore correctly applied the law by requiring the tenant to provide this proof, which he failed to do.

What this means for you — practically

For the landlord: you are protected. If you lease premises without specifying the intended use, you can refuse commercial status. Example: you lease an old garage in Riom for storage. The tenant sets up a repair workshop and claims the right to renewal. You can object, unless you allowed it without reacting for years. Caution: an oral lease may be reclassified if the landlord tacitly accepted the commercial activity (by receiving rent without reservation, for example).

For the tenant: you must be vigilant. If you want to benefit from the status of commercial leases, insist on a written lease mentioning the commercial use. Otherwise, you risk being left without protection. For example, if you lease premises in Clermont-Ferrand without a written lease and open a shop, the landlord can give you notice without compensation. To avoid this, have a commercial lease signed from the start.

For the purchaser of a rented building: check the nature of existing leases. If a tenant carries on a business without a written lease, you could inherit a dispute. Ask the seller for a certificate or require the regularisation of a written lease.

Four tips to avoid this type of dispute

• Draft a written lease: Whether you are a landlord or tenant, a written contract is the best protection. Specify the intended use of the premises (commercial, craft, residential, etc.). This avoids any later challenge.
• For the landlord: insert a precise use clause: For example: "The premises are leased for storage of equipment not open to the public. Any change of use is subject to the landlord's written consent."
• For the tenant: obtain a written commercial lease before starting your activity: If you invest in premises to carry on a business, do not rely on a verbal agreement. Insist on a commercial lease with right to renewal.
• When in doubt, consult a lawyer before signing: A professional can advise you on the qualification of the lease and the clauses to include. In Clermont-Ferrand as elsewhere, a lawyer specialised in property law is your best ally.

Further reading: related case law and developments

This 1971 decision is part of a consistent line. The Supreme Court had already held in 1963 (Civ. 3e, 14 November 1963) that the qualification of a lease depends on the parties' intention. More recently, it clarified that the landlord can rely on the agreed use even if the tenant carries on a commercial activity (Civ. 3e, 8 June 2017, No. 16-17.657).

The trend is therefore towards respect for contractual intention. The courts are strict on proof: a tenant claiming an oral commercial lease must show that the landlord accepted this use. Mere use is not enough. This case law protects landlords against abusive reclassifications, but it requires tenants to formalise their situation.

In the future, with the proliferation of short-term rentals and hybrid activities (co-working, pop-up sales spaces), this issue remains crucial. Prudence dictates always clarifying the intended use in writing.

What you absolutely must remember

FAQ:

• Can an oral lease be commercial? Yes, if the tenant proves that the parties agreed on a commercial use. But this is difficult without a written document.
• What if my tenant carries on a business without my consent? You can give him notice (terminate the lease) if it is a civil lease. Consult a lawyer to check the time limits.
• Can I claim the status of commercial leases if I have no written lease? Yes, if you provide proof that the landlord accepted a commercial use (for example, if he received rent without protesting for several years).
• What are the risks for a landlord who allows it? The lease may be reclassified as a commercial lease, with right to renewal and eviction indemnity. Better to react at the first signs.
• How to prove the agreed use? By any means: correspondence, witness statements, conduct of the parties, terms of the lease even if oral (for example, an exchange of text messages where the landlord agrees that you sell products).

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