Bare Land Leased: No Commercial Lease, Even for Ancillary Use

Imagine: you own a small grassy plot in Lesneven, which you lease to a trader to store a few pallets. One day, you want to recover the land to sell it. You give notice. But the tenant invokes the commercial lease regime, claiming an eviction indemnity. You think bare land is not commercial premises, right? Yet the tenant argues that the lease is ancillary to his business. Who is right? The French Supreme Court ruled in 1971: a bare plot of land can never be considered as premises or an ancillary building within the meaning of Article 1-1 of the decree of 30 September 1953. Explanations follow.

This decision, rendered over fifty years ago, remains relevant. It protects landlords against attempts to extend the scope of commercial leases. But it also sets a clear limit: to benefit from the regime, the leased property must be premises or a building, not mere land.

The facts: a common story

In Plougastel-Daoulas, Mr X, owner of a bare plot, leases it to Mr Y, a trader, who uses it to store goods related to his business. The lease is verbal, with no fixed term. A few years later, Mr X sells his land to a developer and gives notice to Mr Y to vacate. Mr Y disputes: according to him, the lease of the land is ancillary to his business, and he benefits from the commercial lease regime. He claims an eviction indemnity. The district court rules in favour of Mr Y, upholding the notice but recognising the right to indemnity. Mr X appeals. The Court of Appeal affirms. Mr X appeals to the Supreme Court.

The Court of Appeal's reasoning? It considered that the lease, although for bare land, was concluded for ancillary commercial use. Therefore, in its view, the notice could not defeat the protective regime. But the Supreme Court disagreed.

The court's reasoning — dissected

The Supreme Court quashes the appeal judgment. Its reasoning has three points. First, it recalls that Article 1 of the decree of 30 September 1953 (which defines the scope of commercial leases) requires the lease to relate to premises or a building. A bare plot is by nature neither. Second, it dismisses the argument of ancillary character: even if the lease is ancillary to a business, bare land remains bare land. The classification as premises does not depend on use, but on the nature of the property. Finally, it declares that any clause or interpretation that would equate bare land with premises would be contrary to the public policy of the decree, which is mandatory (i.e., cannot be contracted out of).

In other words: the law is clear, land is not a building. It does not matter if you conduct business there. If you want the protection of the regime, you need a roof and walls. This decision confirms consistent case law: the legal nature of the property prevails over the activity carried out.

What this means for you — practically

If you are a landlord: you can lease bare land without fearing that your tenant acquires a right to renewal or an eviction indemnity. Example: in Plougastel-Daoulas, a landlord leases land to a landscaper to store equipment. If the landlord wants to sell, he gives ordinary notice (6 months' notice, no indemnity). Caution: if the land has even a modest structure (a shed, a technical room), the situation changes. A client recently consulted me for land with a concrete block hut: the court reclassified it as a commercial lease. So be vigilant.

If you are a tenant: you cannot claim the commercial lease regime for bare land. If you want protection, you must negotiate a written lease with specific clauses (term, notice, etc.). Otherwise, you are precarious. A tenant in Lesneven lost his land overnight because the lease was verbal and the landlord sold. Without a written agreement, no recourse.

If you are a buyer: check the nature of the leased property. If it is bare land, you can give notice without indemnity. If it is premises, you must respect the regime. A property developer bought land in Brest without checking for a structure: the tenant obtained €50,000 in eviction indemnity.

Four tips to avoid this type of dispute

• Draft a written contract: even for bare land, a written lease protects you. Specify that it is not a commercial lease. Mention the term, rent, and purpose.
• Describe the leased property precisely: state "bare land, without structures". If you lease land with premises, distinguish the two in the contract.
• Do not allow the tenant to erect structures without authorisation: otherwise, the land could be reclassified as premises. Include a clause prohibiting any construction without prior written consent.
• Provide for a reasonable notice period: even if the regime does not apply, a 3 to 6 month notice is good practice. This avoids conflicts.

Further reading: related case law and developments

This 1971 decision is part of a consistent line. Already in 1968, the Supreme Court held that bare land could not be commercial premises (Civ. 3e, 19 June 1968). More recently, in 2015, it recalled that even if the land is used for commercial activity, it remains land (Civ. 3e, 10 September 2015, No. 14-17.684). The trend is stable: judges are strict on classification. No reversal is expected. For practitioners, this means vigilance is needed regarding the existence of structures, even modest ones, which could tip the lease into the commercial regime. A simple low wall or concrete slab is not enough, but a solid shelter is.

In practice: what to do

Checklist for the owner of bare land:

1. Check that there are no structures on the land (even a small hut).
2. Draft a written lease expressly stating "bare land" and excluding the commercial lease regime.
3. Carry out an inventory of fixtures at entry and exit with photos.
4. If the tenant wants to install premises, require an addendum converting the lease into a commercial lease.
5. On sale, inform the buyer of the nature of the lease.

In a similar situation? A 30-minute initial consultation with Maître Zakine (€45) can save you months of proceedings — and often much more. Book an appointment →