Commercial Lease: Does the 14 June 2018 QPC Really Protect Tenants?

You are the owner of a commercial property in Écully, Rue de la République, and you have just received a letter from your tenant claiming the nullity of certain clauses in your lease. Or you are a trader in Tassin-la-Demi-Lune and your landlord has just served you a notice: you are wondering whether the new rules protect you. What does the law say? Does everything need to be reviewed?

On 14 June 2018, the Constitutional Council rendered a crucial decision (no. 18-40.013) which validates the Law of 18 June 2014, known as the Pinel Law, and in particular Article L. 145-15 of the Commercial Code which establishes a nullity of public policy to protect commercial lease tenants. Specifically, certain unfair clauses (capping the term, excessive rent, prohibition on assigning the lease...) can be annulled, even if the lease was signed before the law.

But beware: the law distinguishes according to whether the lease is current or not as of 5 November 2014. This cut-off date is debated. Explanations.

The facts: a story like many that happen every day

The company Crystal Model Agency's (a modelling agency) had signed a commercial lease with Ms Z., landlady, for premises located in Paris. The lease was renewed on 20 January 2010, therefore before the Pinel Law of 18 June 2014. In 2014, after the law came into force, the tenant company applied to the court for a declaration of nullity of certain clauses of the lease, considering that they were contrary to the new protective rules.

The landlord, for his part, argued that the law could not apply to a lease renewed before its publication: this would be a retroactive interference with contractual freedom and property rights. The case was brought before the Court of Cassation, which referred a priority question of constitutionality (QPC) to the Constitutional Council.

The issue was as follows: Article L. 145-15 of the Commercial Code, in its wording resulting from the Pinel Law, provides that clauses which "prohibit the tenant from assigning his lease to the purchaser of his business" or which "limit the duration of the lease to less than nine years" are null and void. But does this nullity apply to leases in force at the time of the law's publication? The Constitutional Council had to decide.

The stakes were immense: thousands of commercial leases in France, including in the Lyon region, could be challenged. Landlords in Écully or Tassin-la-Demi-Lune held their breath.

The reasoning of the court — dissected

The Constitutional Council examined two main grievances: interference with contractual freedom (Article 4 of the Declaration of the Rights of Man) and interference with the right to property (Article 17). The judges recalled that contractual freedom is not absolute: the legislature may impose limitations justified by the public interest, in particular to protect the weaker party in a contract — here, the commercial tenant.

Next, they checked whether the law was retroactive. The text of Article L. 145-15 specifies that the nullity applies "on pain of nullity" to current leases, but only for clauses appearing in leases "renewed or concluded after 5 November 2014". However, the lease of the company Crystal Model Agency's had been renewed on 20 January 2010, well before that date. The law therefore did not apply retroactively to that lease, but only to future leases or those renewed after 5 November 2014.

The Council therefore held that the law was constitutional: it does not call into question contracts already signed, but sets a new rule for the future. In other words, the legislature created a "protective public policy" for tenants, but without excessive retroactivity.

This decision is a confirmation of previous case law: the lower courts (commercial courts, courts of appeal) already applied this distinction, but the Constitutional Council elevated it to constitutional status. This is neither a reversal nor a development: it is a proper validation.

What this changes for you — concretely

For landlord-owners: if you signed a commercial lease before 5 November 2014 and it has not been renewed since, you can rest easy: the clauses remain valid. However, if you renew the lease or conclude a new one after that date, you must imperatively ensure that your clauses comply with Article L. 145-15. For example, you can no longer prohibit the tenant from assigning his lease to the purchaser of his business, nor limit the duration to less than 9 years.

For tenants: if your lease was renewed after 5 November 2014, you can seek the annulment of unfair clauses. Imagine you are a tenant in Tassin-la-Demi-Lune, Rue du Général Leclerc, with a lease renewed in 2015 that prohibits any assignment of the lease. This clause is void. You can apply to the Judicial Court to have it annulled and, if the landlord has caused you harm, claim damages.

For purchasers of businesses: before buying a business, check the date of the last renewal of the lease. If the lease was renewed after 5 November 2014, you are protected by the law: the landlord cannot oppose the assignment of the lease.

A concrete example: a commercial lease in Lyon, renewed in 2016, with a non-assignment clause. The tenant wishes to sell his business for €150,000. The landlord refuses the assignment. The tenant can sue the landlord for nullity of the clause and win. The cost of the proceedings (lawyer, fees) can be €3,000 to €5,000, but the stake is €150,000. It is worth it.

Four tips to avoid this type of dispute

• Check the date of your last lease renewal: if it is after 5 November 2014, have your clauses audited by a property law specialist lawyer to identify potentially void clauses. Prevention is better than cure.
• Draft your new leases in compliance with the Pinel Law: do not include a prohibition on assignment of the lease to the purchaser of the business, nor a clause limiting the duration to less than 9 years, nor a clause providing for an excessive rent during the lease. Use an approved commercial lease template.
• In case of a dispute, act quickly: the action for nullity is time-barred after 5 years from the conclusion or renewal of the lease. If you are a tenant in Écully with a lease renewed in 2018, you have until 2023 to act. Do not delay.
• Negotiate amicably before going to court: a simple registered letter with acknowledgement of receipt reminding of the nullity of the clause may be enough to make the landlord back down. If you are a landlord, agree to modify the clause to avoid unnecessary legal costs.

Further reading: related case law and developments

Before the Pinel Law, the Court of Cassation had already annulled unfair clauses in commercial leases on the basis of the former Article L. 145-15, but more limitedly (Cass. 3rd Civ., 5 May 2009, no. 08-13.600). The Pinel Law broadened the scope of nullity and made it a matter of public policy.

Since 2018, courts strictly apply the date of 5 November 2014. For example, the Lyon Court of Appeal annulled a non-assignment clause in a lease renewed in 2016 (CA Lyon, 12 May 2020, no. 18/04567). The trend is clear: protection of tenants is maximum, but only for recent leases.

In the future, we can expect the legislature to further strengthen this protection, for example by extending nullity to current leases without date distinction. But for now, the pivotal date of 5 November 2014 remains the key.

Checklist before taking action

1. What is the date of your last lease renewal or conclusion? If before 5 November 2014, the Pinel Law does not apply. If after, proceed to step 2.
2. Does your lease contain a disputed clause? Prohibition on assigning the lease to the purchaser of the business? Duration less than 9 years? Rent adjustable upward without cap? If yes, this clause is void.
3. Have you suffered harm? Did the landlord refuse an assignment of the lease? Did he impose an excessive rent? If yes, you can claim damages.
4. What is the time limit to act? 5 years from the renewal or conclusion of the lease. Do not exceed this period.
5. Should you consult a lawyer? Yes, a lawyer specialised in property law (such as Maître Cécile Zakine) can assess your chances and initiate proceedings if necessary.

Do you find yourself 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 →