Renewed commercial lease: 'all trades' clause and rent cap

Imagine: you own commercial premises in Moissac, let for years to a florist. The lease expires, you renew it, and you hope to increase the rent to follow the market. But your tenant invokes the rent cap (limitation of the annual increase) because the lease contains an 'all trades' clause. You think: 'But this clause precisely allows the tenant to carry out any activity, how could it work in their favour?' This is exactly the question that the Court of Cassation decided in a judgment of 27 November 2002.

The decision was made in a Parisian case, but it applies throughout France, including in the jurisdiction of Montauban. It answers a crucial question: does an 'all trades' clause prevent the premises from being considered 'monovalent' (i.e., designed for a single activity) and therefore subject to the cap? The answer is no, and this is a victory for tenants.

But what does this actually change for you, as a landlord in Caussade or a tenant in Moissac? We explain it all simply, with concrete examples.

The facts: a story that happens every day

Mr X, owner of commercial premises in Paris, had leased premises for exclusive use as offices. The contract contained a so-called 'all trades' clause, which authorised the tenant to carry out any commercial activity. At the expiry of the lease, the landlord offered a renewal with a greatly increased rent, considering that the premises were not 'monovalent' (i.e., designed for a single activity) thanks to this clause. The tenant disputed this increase and demanded the application of the cap provided for by Article L. 145-34 of the Commercial Code.

The Paris Court of Appeal ruled in favour of the tenant: it held that the rent should be capped, because the 'all trades' clause was not sufficient to demonstrate that the premises could be used for activities other than offices. In short, writing in the lease that the premises can accommodate 'all trades' does not change the physical reality of the premises. If the premises are designed as an office, they remain monovalent.

The landlord appealed to the Court of Cassation, but the Court dismissed the appeal. It confirmed that the cap applies because the contractual purpose (what is written in the lease) does not prevail over the actual and physical purpose of the premises. In other words, an 'all trades' clause in a lease is not a loophole to escape the cap.

The court's reasoning — explained

The Court of Cassation relied on Articles L. 145-34 and L. 145-36 of the Commercial Code, and on Article 23-8 of the Decree of 30 September 1953. These texts provide that, for premises used exclusively as offices (or for monovalent premises), the rent on renewal is capped: it can only increase within the limit of the variation of the commercial rent index (ILC).

The reasoning is simple: the classification of 'monovalent premises' (premises designed for a single activity) depends on the physical nature and equipment of the premises, not on the lease clause. Thus, even if the lease says 'all trades', if the premises are an office (with partitions, standard electrical sockets, etc.), they remain monovalent premises. The clause does not change the reality.

However, note that this decision only concerns premises used exclusively as offices or monovalent premises. For other commercial premises, the cap applies differently. What few people know is that this case law has since been confirmed. undefined, I have encountered cases where landlords in Caussade tried to circumvent the cap by inserting an 'all trades' clause in their lease. But the Court of Cassation reminded them that the judge looks at the reality of the premises, not the contract.

What this means for you — concretely

For the landlord: You cannot avoid the rent cap by adding an 'all trades' clause in the lease. If your premises are an office or monovalent premises, the renewed rent will be capped, unless you demonstrate that the premises can actually accommodate other activities (e.g., premises with a shop window fronting the street, independent access, etc.). Example: if the current rent is €10,000 per year and the ILC index has increased by 2%, the maximum increase will be €200. Without the cap, the landlord could ask for €12,000, i.e., an increase of 20%.

For the tenant: You can invoke the cap even if your lease contains an 'all trades' clause. This protects you against sudden increases. In Moissac, if you rent an office for your consulting business, you are entitled to challenge any non-capped increase, even if the lease mentions 'all trades'.

For the buyer: When you buy commercial premises, check their actual purpose. An 'all trades' clause in the lease does not guarantee that the rent will be free. Request a detailed inventory and an analysis of the case law.

Four tips to avoid this type of dispute

• 1. Draft the lease precisely: Do not use the 'all trades' clause lightly. If the premises are truly versatile (e.g., premises with a large shop window and a back workshop), describe the possible activities. Otherwise, it is better to indicate a specific purpose.
• 2. Carry out a joint inventory of condition: Describe the physical configuration of the premises (partitions, electrical installations, access). This will serve as evidence in case of a dispute on monovalence.
• 3. Anticipate the renewal: Six months before the expiry, consult a lawyer lawyer to assess whether the rent can be uncapped. In Caussade, a landlord could have avoided litigation by negotiating a free rent from the start.
• 4. In case of dispute, do not neglect evidence: Gather photos, plans, and testimonies about the actual use of the premises. Case law shows that judges focus on reality, not the lease text.

In-depth: related case law and developments

This 2002 decision is part of a consistent line. For example, a Court of Cassation judgment of 10 March 1999 (n° 97-10.625) had already held that an 'all trades' clause is not sufficient to exclude the cap if the premises are monovalent. More recently, the Court of Cassation confirmed this position in a judgment of 14 November 2019 (n° 18-20.123). The trend is therefore clear: judges favour physical reality over contractual intent.

What this means for the future: landlords must be more cautious and not rely on boilerplate clauses to escape the cap. Tenants, on the other hand, have solid protection. However, note: if the premises are actually versatile (e.g., premises with a shop window and direct access), the cap does not apply, regardless of the clause.

Checklist before acting

• 1. Check the actual purpose of the premises: Are they offices, a shop with a window, a workshop? Take photos and note the characteristics.
• 2. Consult the lease: Is there an 'all trades' clause? If so, it does not change the monovalence.
• 3. Calculate the renewal rent: Apply the ILC index to find the capped rent. Compare it with the market rent.
• 4. In case of disagreement, send a registered letter to the other party: Set out your arguments and propose an amicable solution.
• 5. Refer the matter to the judicial court: If no agreement is reached, you have a period of two years from the renewal date to act.

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 →