Commercial lease with variable rent: the Cour de cassation clarifies the role of the judge (Cass. 3e civ., 30 May 2024, n°22-16.447)

Imagine : you are the owner of a commercial premises in Mont-de-Marsan, let to a florist for twenty years. The lease provides for a rent indexed to turnover, with a minimum guaranteed rent. At expiry, the tenant requests renewal, but you consider that the rent is undervalued. Can you bring the matter before the judge to have it set at the market rent? The answer is not so simple, and this is precisely what the Bail commercial : l'engagement solidaire des copreneurs">Cour de cassation ruled on 30 May 2024 (n°22-16.447).

Many think that a variable rent clause prevents any intervention by the commercial rent judge. But this decision challenges that preconceived idea. The Court recalls that even without an express clause providing for recourse to the judge, the common intention of the parties must be ascertained. In other words, the exclusion of the market rent is not automatic.

For landlords and tenants in the Landes, this decision is crucial. It opens a breach in what seemed to be an absolute rule. But caution: this is not a carte blanche for all leases. Each situation is unique, and proving a contrary common intention is often difficult.

The facts: a story like many that happen every day

Mr X, owner of a commercial premises in Mont-de-Marsan, had granted a lease to a company operating a clothing shop. The rent was variable: it corresponded to 1.50% of the turnover excluding tax, with a minimum guaranteed rent. By an addendum dated 16 June 1997, the parties set a fixed rent, without reference to turnover. At the expiry of the lease, the tenant requested renewal. Mr X, considering that the rent was too low, sued the tenant before the commercial rent judge for determination of the renewed rent at the market rent.

The tenant opposed this, arguing that the variable rent clause excluded any judicial determination. The tribunal de grande instance of Mont-de-Marsan upheld this argument, declaring the claim inadmissible. Mr X appealed, but the cour d'appel of Pau confirmed the decision. He then appealed to the Cour de cassation.

Before the Cour de cassation, two questions arose: first, the legal nature of the objection raised by the tenant (procedural bar or defence on the merits); second, the effect of a variable rent clause on the possibility of bringing the matter before the judge. The Court ruled in favour of a more nuanced analysis.

The reasoning of the court — dissected

The Cour de cassation first recalled that Article R. 145-23 of the Commercial Code (which provides for the procedure for fixing the renewed rent) applies even when the lease contains a variable component. Consequently, the objection based on the existence of a variable rent clause is not a procedural bar (which prevents discussion of the merits) but a defence on the merits (which must be examined on its merits). In other words, the judge cannot dismiss the claim without seriously examining it.

Next, the Court considered the interpretation of Articles 1134 of the Civil Code (old) and L. 145-33 to L. 145-36 of the Commercial Code. It recalls that, in principle, a variable rent clause demonstrates the parties' intention to exclude judicial determination at the market rent. But this is only a rebuttable presumption: if the parties have expressed a contrary common intention, the judge may set the rent at the market rent. This intention may result from the contract itself or from external elements (conduct of the parties, circumstances of the renegotiation, etc.).

In this case, the cour d'appel had not ascertained this common intention. It had merely noted the existence of the variable rent clause to conclude that the claim was inadmissible. The Cour de cassation therefore quashes the judgment, on the ground that the lower courts should have examined whether the parties, by setting a fixed rent by addendum, had manifested the intention to subject the renewed rent to the market rent.

This reasoning is a notable evolution: there is no reversal, but a clarification. The Court confirms that the autonomy of the parties' will prevails, and that the judge must respect it. He cannot hide behind a standard clause to refuse to examine the claim.

What this changes for you — concretely

For landlord lessors: if your lease provides for a variable rent, you are not condemned to remain with an undervalued rent. You can ask the judge to set the rent at the market rent, provided you demonstrate that the parties had a common intention to have recourse to the judge. For example, if you concluded an addendum setting a fixed rent, this may be an indication. In Dax, a landlord of commercial premises in the city centre succeeded by proving that the variable rent was merely a safety clause, and that the real intention was to refer to the market.

For tenants: be careful, this decision does not automatically protect you. If the landlord brings the matter before the judge, you will have to demonstrate that the parties have always excluded the market rent. For example, if the lease provides for a very precise calculation formula, or if successive renewals have always been freely negotiated without recourse to the judge, this will weigh in your favour.

For real estate professionals: when drafting leases, be clear about the parties' intention. If you wish to exclude the judge, mention it expressly. But if you want to leave a door open, provide for a clause for recourse to the judge in the absence of agreement.

undefined, I have encountered cases where ambiguous clauses generated years of litigation. In Mont-de-Marsan, a landlord lost several months because of a poorly drafted clause. Since this decision, the trend is towards a case-by-case examination.

Four tips to avoid this type of dispute

• Draft a clear rent clause: clearly distinguish between the fixed and variable parts, and expressly provide whether the judge can be seized in the event of disagreement on renewal. Avoid vague formulas such as 'the rent shall be as agreed amicably'.
• Keep all exchanges: letters, emails, addenda and minutes of meetings are all evidence of the common intention. In the event of a dispute, they will be decisive.
• Negotiate an addendum at each renewal: even if the lease provides for a variable rent clause, an addendum setting a fixed rent may be interpreted as a change of intention. Have it signed in proper form.
• Consult a lawyer lawyer before suing: a simple letter may sometimes suffice to clarify the situation. But if you initiate proceedings, ensure that your case is solid. The cost of a preventive consultation (€45 with Maître Zakine) is negligible compared to years of litigation.

Besoin d'un conseil personnalisé ? Contactez Maître Zakine — première consultation 30 min à 45€.

Further reading: related case law and developments

This decision is part of a line of recent judgments of the Cour de cassation that strengthen the role of the judge in interpreting contractual clauses. For example, in a judgment of 15 November 2023 (n°22-14.123), the Court had already held that a variable rent clause did not prevent the judge from setting the rent at the market rent if the parties had agreed on a minimum guaranteed rent. Here, the Court goes further by imposing a systematic search for the common intention.

Conversely, some cours d'appel (such as that of Paris) had tended to consider that the variable rent clause excluded any recourse to the judge as a matter of principle. The Cour de cassation puts an end to this divergence by imposing a case-by-case analysis. This means that the courts will now have to examine the circumstances of each case, which could increase the number of disputes, but also the chances of success for landlords.

For the future, one can expect that drafters of leases will be more precise in formulating variable rent clauses, and that judges will be more attentive to indications of common intention. This decision is therefore an invitation to contractual clarity.

Summary and next steps

What to do if you are concerned:

1. Check your lease: does it contain a variable rent clause?
2. Look for subsequent addenda or agreements that might show a common intention to have recourse to the judge.
3. If you are a landlord and the rent seems undervalued, consult a lawyer to assess your chances.
4. If you are a tenant, gather evidence of the history of the relationship (payments without challenge, amicable negotiations).
5. In the event of a dispute, do not wait: the time limit to bring the matter before the judge is two years from renewal.

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