Commercial lease: when a space in a hypermarket is not a premises

Imagine the scene: you are the owner of a hypermarket in Mimizan, and you rent a small space to an independent trader. Lightweight partitions, no closed door, and the customer circulates freely. Everything goes well until the day you want to recover the space to enlarge it. The tenant objects and claims the status of commercial leases (special protection for traders), which would give them a right to renewal of the lease.

This question, crucial for owners and tenants in shopping centres, was decided by the Court of Cassation in 1995. The decision is clear: to benefit from the status, there must be a premises, i.e., an enclosed and covered space, with independent management and its own clientele. A simple space delineated by waist-high partitions is not enough.

But what does this actually change for you? Whether you are the owner of a hypermarket in Capbreton or a tenant of a stand in a shopping arcade, this decision sets the boundaries of the playing field. Let's dive into the details.

The facts: a story like many that happen every day

Mrs X, owner of a hypermarket in Mimizan, granted Mrs Y a lease on a sales space located inside the store. The space was delineated by lightweight, waist-high partitions, without complete separation. Mrs Y operated a clothing boutique there. In 1989, Mrs X gave notice to Mrs Y for 4 December 1989, asking her to vacate the premises.

Mrs Y refused, arguing that she benefited from the status of commercial leases (protection allowing the tenant to remain in the premises and obtain renewal of the lease). She considered that the rented space constituted commercial premises, even if it was not completely enclosed. Mrs X took legal action to evict Mrs Y.

The Court of Appeal ruled in favour of Mrs X, finding that the space was not premises within the meaning of Article 1 of the Decree of 30 September 1953 (the text defining the scope of application of the status of commercial leases). Mrs Y then appealed to the Court of Cassation.

The Court of Cassation dismissed the appeal, upholding the Court of Appeal's judgment. It held that the Court of Appeal had legally justified its decision by noting the absence of independent management and own clientele of Mrs Y, and that the space delineated by lightweight partitions did not constitute premises. The case ends there: Mrs Y must leave the premises.

The reasoning of the court — dissected

The central question was whether the space rented in the hypermarket could be classified as 'premises' within the meaning of the 1953 Decree. This Decree, which governs commercial leases, requires that the lessee (tenant) carries on its activity in a distinct premises, with its own clientele and independent management.

The judges of the Court of Appeal examined the facts: the space was not enclosed, customers of the hypermarket could access it without going through a door, and Mrs Y did not manage her supply or clientele autonomously. In reality, her clientele was that of the hypermarket, attracted by the main brand. Mrs Y did not have her own clientele (customers who come specifically for her).

In short, for there to be a commercial lease, there must be a physically delineated premises (walls, door) and independent operation. Here, the space was too integrated into the hypermarket. The Court of Cassation approved this reasoning, confirming that simple delineation on the ground by lightweight partitions is not sufficient.

What is interesting is that the decision emphasises the absence of 'independent management'. For example, if Mrs Y had managed her own stock, her own hours, and attracted her own clientele, the result might have been different. But in fact, she depended entirely on the hypermarket.

However, note: this decision does not mean that a space in a shopping centre can never be premises. If the space is enclosed, with a separate entrance and autonomous management, the status may apply. But the stronger the integration, the greater the risk of not being protected.

What this changes for you — concretely

For landlords: If you rent a space in your hypermarket or shopping centre, you can avoid the application of the status of commercial leases by ensuring that the space is not an autonomous premises. For example, in Capbreton, an owner of a shopping arcade can set up open stands without doors, and the rental contract will not be subject to the status. This allows you to recover the premises more easily at the end of the lease.

For tenants: If you rent a space in a shopping centre, check the conditions. If the space is open to the arcade, without a door, and you depend on the flow of customers from the centre, you risk not benefiting from the status. In the event of a dispute, you could be evicted without a right of renewal. If you want to be protected, negotiate an enclosed and independent space, with your own access.

For purchasers of business assets: When purchasing a business asset located in a shopping centre, check the nature of the lease. If the lease does not mention a distinct premises, you could lose the protection of the status. A concrete example: in Mimizan, a trader bought a business in an arcade, without realising that the lease was precarious (not subject to the status). He had to leave after six months' notice, losing his investment.

undefined, I have come across cases where tenants had invested significant sums in fitting out an open space, thinking they were protected by the status. At the first difficulty with the landlord, they found themselves without recourse. Do not make the same mistake!

Four tips to avoid this type of dispute

• Draft a precise rental contract: Clearly state whether the lease is subject to the status of commercial leases. If you want to exclude the status, use a short-term lease (bail dérogatoire) or a seasonal rental contract. Have it drafted by a solicitor.
• Physically delineate the space: If you want the tenant to benefit from the status, ensure the space is enclosed and covered, with a door and lock. Conversely, if you want to avoid it, leave the space open.
• Check independent management: As a landlord, avoid imposing conditions that tie the tenant to your brand (hours, supply). This could be interpreted as a lack of independence. As a tenant, maintain management autonomy.
• Consult a solicitor before any dispute: If a conflict arises, a quick consultation can save you months of proceedings. For example, in Capbreton, a landlord saved €10,000 in legal fees by settling a dispute amicably after being advised.

Further reading: related case law and developments

This 1995 decision is part of a consistent line of the Court of Cassation. As early as 1991, the Court had held that a location in a covered market without partitioning was not premises (Cass. 3e civ., 13 March 1991, No. 89-18.412). More recently, in 2018, the Court confirmed this principle for a letting in a shopping centre, emphasising the notion of 'distinct premises' (Cass. 3e civ., 22 November 2018, No. 17-26.307).

The trend is therefore stable: judges are strict on the notion of premises. However, the rise of pop-up stores and lettings in shared spaces (coworking) could lead to developments in case law. Courts may need to clarify what constitutes premises in these new contexts. In the meantime, the 1995 rule remains the benchmark.

Checklist before acting

• Before signing a lease: Check whether the space is a distinct premises (walls, door, lock). Request a plan of the premises. Have it stated in writing whether the lease is subject to the status of commercial leases.
• In case of a dispute: Gather all documents (lease, plans, correspondence). Consult a solicitor to assess your chances. Do not leave the premises without a written agreement.
• If you are a landlord: Before giving notice, check whether the tenant can claim the status. If so, respect the legal time limits (minimum 6 months' notice). If not, simple contractual notice is sufficient.
• If you are a tenant: If you believe you are entitled to the status, bring proceedings before the judicial court within two years of the notice of termination. After this period, you lose your rights.

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