Registration with the RCS: the right to renew a commercial lease at stake

Imagine: you are the owner of a commercial premises in Hayange, let for ten years to a craftsman. The lease is about to expire, you want to recover the premises to set up your own business. You refuse renewal, but the tenant claims an eviction indemnity of several tens of thousands of euros. Except that, on checking his papers, you discover that he is not registered with the Register of Commerce and Companies (RCS) for the activity he carries on in your premises. Is he entitled to this indemnity? The question every owner asks: can I dispense with this formality? The answer is clear: no, and the decision of the Court of Cassation of 22 September 2016 (No. 15-18.456) confirms this, with an important clarification: the landlord does not even have to put the tenant on notice to regularise before denying him the right to the status.

The facts: a story that happens every day

In this case, company Y... was the tenant of commercial premises used for the sale of clothing. The owner, Mr. X., notified a refusal to renew the lease on 29 September 2010, with an offer of an eviction indemnity. The tenant contested this refusal, claiming that she was entitled to the status of commercial leases and therefore to an indemnity. But the owner raised a procedural defect: the company was not registered with the RCS for the activity carried on in the leased premises. However, it was registered with the RCS, but for a different activity. The Metz Court of Appeal had ruled in favour of the tenant, considering that the landlord should first have put her on notice to regularise her situation before denying her the right to the status. The Court of Cassation quashed this judgment: the landlord does not have to send a prior notice. The lack of registration for the activity carried on is sufficient to deprive the tenant of the right to renewal and to an eviction indemnity.

The reasoning of the court — dissected

The Court of Cassation relies on Article L. 145-1 of the Commercial Code, which makes the benefit of the status of commercial leases conditional on the tenant's registration with the Register of Commerce and Companies (RCS) or the Trade Register. But beware: this registration must be made 'for the activity carried on in the leased premises'. In other words, it is not a mere administrative formality. A trader registered for the sale of furniture cannot invoke the status if he actually carries on a restaurant business in the premises. In short, the condition is twofold: to be registered, and to be registered for the correct activity. What few people know is that the lack of registration for the actual activity can be raised at any time by the landlord, without being required to give a prior warning. The Court of Cassation held that the denial of the right to the status does not have to be preceded by a notice to comply, contrary to what the Court of Appeal had ruled. The judges considered that the condition of registration is a condition of substance, not a mere formality for regularisation. undefined, I have come across cases where tenants in Saint-Avold lost their right to an indemnity because they had failed to declare a change of activity to the RCS. The rigour of the case law is constant: the Court of Cassation reminds here that there is no 'grace period'.

What this means for you — concretely

For the landlord: you can now refuse renewal of the lease without having to prove a prior notice. If your tenant is not registered for the activity he actually carries on, you will not have to pay him an eviction indemnity. However, be careful to check the Kbis extract (for a company) or the Trade Register (for a craftsman) before initiating proceedings. Concrete example: in Saint-Avold, a landlord saved €45,000 in indemnity by demonstrating that his tenant, registered as a 'hairdresser', was actually carrying on an aesthetician activity without declaration.

For the commercial tenant: you must ensure that your registration exactly matches the activity carried on in the premises. If you change activity, even partially, you must update your registration with the RCS. Otherwise, you risk losing all right to renewal and to an eviction indemnity. This is a classic trap: you think you are in order because you have a SIRET number, but if the declared activity does not correspond, you are vulnerable.

For the purchaser of a business: before buying, check the seller's registration. If it is incorrect, the right to the lease could be challenged, and the value of the business would be reduced.

Four tips to avoid this type of dispute

• Check your tenant's Kbis extract every year: ask him to provide an up-to-date Kbis, and compare the declared activity with the one actually carried on. A simple visit to the premises may be enough to detect a discrepancy.
• If in doubt, send a registered letter requesting proof: even if a notice is not mandatory, it can constitute useful evidence in the event of a dispute. Ask the tenant to regularise within 30 days.
• For tenants, declare any change of activity to the commercial court registry: within 15 days of starting the new activity. The cost is modest (around €20) and saves you from losing your protection.
• Consult a lawyer lawyer at the first signs of difficulty: a preventive consultation can save you much higher litigation costs. Maître Zakine operates throughout France, including in Hayange and Saint-Avold.

Further details: related case law and developments

The decision of 22 September 2016 is part of a consistent line of case law. Already, in a judgment of 8 July 2009 (No. 08-14.133), the Court of Cassation had held that registration must be effective on the date of the renewal request. More recently, a judgment of 13 January 2021 (No. 19-22.422) specified that registration for a different activity does not allow the benefit of the status, even if the tenant has been registered for a long time. The trend is therefore clear: the judges are uncompromising on this formal condition. For the future, it is likely that the Court of Cassation will maintain this rigour, especially since the RCS is a tool of economic transparency. undefined that landlords have an interest in systematically checking registration before initiating renewal or termination proceedings.

What you absolutely must remember

FAQ:

1. My tenant is registered with the RCS, but for a different activity: is he entitled to an eviction indemnity? No, according to the Court of Cassation, the registration must correspond to the activity actually carried on. You can refuse renewal without indemnity.
2. Do I have to put my tenant on notice before denying him the right to the status? No, a notice is not mandatory. But it is prudent to do so to avoid a challenge.
3. What are the risks for a tenant who is not up to date? He loses all right to renewal of the lease and to an eviction indemnity. He may even be evicted without compensation.
4. How can I check my tenant's registration? Ask for a Kbis extract (for a company) or a Trade Register entry (for a craftsman). You can also consult the website infogreffe.fr.
5. What should I do if I discover a discrepancy after signing a lease? You can bring an action for termination of the lease for lack of registration, or refuse renewal at expiry. Consult a lawyer quickly.

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 →