Legislation on Leases

Practical application:

Under this case law, eviction compensation must include the market value of the business, with specific weight given to favourable location and the increased value of the leasehold right arising from the extended permitted activities. The tenant should instruct a property valuer to assess the business as a going concern, gathering evidence of turnover, location advantages, and the 1965 law authorisation. The tenant must act within the statutory two-year limitation period after refusal to renew and keep all correspondence and lease documents. A formal claim for eviction compensation should then be filed, quantifying these elements separately.

Practical application:

This decision confirms that if the landlord evicts the tenant, the eviction compensation must reflect the market value of the business, including goodwill, the prime retail location, and the uplift in leasehold value from the broadened permitted activities under the 1965 law. The landlord should commission an expert valuation before serving notice, calculating the likely indemnité d'éviction including these factors. To reduce liability, the landlord could offer a renewal with amended terms or negotiate a voluntary buyout. The landlord must serve notice of non-renewal at least six months before lease expiry and retain all lease documents and communications.

Practical application:

The case law establishes that eviction compensation includes the market value of the business, with adjustments for the favourable location and any increase in leasehold value due to authorisations under the 1965 law for activities not originally in the lease. Before purchase, the investor should obtain a full valuation of the restaurant as a going concern, including goodwill and location premium, and verify whether the tenant has obtained any extension of permitted activities. This amount must be factored into the purchase price or used to negotiate a renewal or buyout with the tenant. The investor should also preserve all pre-contract documents and seek legal advice on eviction compensation exposure to avoid unexpected liabilities.