Optimize rent management in commercial real estate

At the conclusion of the commercial lease, the rent is set freely by the parties. However, it may change during the lease or when it is renewed.

The drafting of contractual clauses is therefore essential to anticipate and optimize the management of rents.

The legal review of the rent

The principle laid down by the Commercial Code is that the revised rent must correspond to the rental value. However, this revision is framed in order to avoid too large variations, both upwards and downwards.

The legal revision of the rent is provided for in Article L.145-37, which provides that:

“Rents for leases of buildings or premises governed by the provisions of this chapter, whether renewed or not, may be revised at the request of either party subject to the reservations provided for in Articles L. 145-38 and L. 145-39 and under conditions set by decree in the Council of State. ”

As for him, Article L.145-38 of the Commercial Code provides that:

“The request for revision can only be made at least three years after the date of entry into possession of the tenant or after the point of departure of the renewed lease. The rent revision takes effect from the date of the request for revision.

New requests may be made every three years from the day the new price will be applicable.

By way of derogation from the provisions of Article L. 145-33, and unless evidence is provided of a material change in local commercial factors that has itself caused a variation of more than 10% in the rental value, the increase or decrease in rent following a triennial revision may not exceed the variation in the quarterly index of commercial rents or the quarterly index of rents of tertiary activities mentioned in the first and second paragraphs of Article L. 112-2 of the Monetary and Financial Code, which has occurred since the last amicable or judicial fixing of the rent. In the event that this evidence is provided, the resulting change in rent cannot lead to increases greater, for a year, than 10% of the rent paid in the previous year.

In no case shall account be taken, for the calculation of the rental value, of the investments of the lessee or of the gains or losses resulting from its management during the term of the current lease. 

When the rent has been applicable for at least three years, the parties may request a revision. This is a public policy provision that applies outside any contractual clause. Consequently, any clause to the contrary is deemed unwritten (CA Paris, 1st ch., B, 8 June 2001, AJDI 2001, p. 795). This is the case in particular of clauses imposing an invariable rent throughout the term of the lease, or which do not comply with the provisions of Article L.145-38 of the Commercial Code (recently: TJ Valence, April 15, 2025, No. 23-01656).

The legal review is not automatic, however, it must be requested by one of the parties. It “may not be formed until at least three years after the date of entry into use of the tenant or the point of departure of the renewed lease“. It is therefore appropriate to refer not to the effective date of the rent, but to that of the initial or renewed lease.

However, case law admits the validity of “level” leases. This mechanism allows a gradual evolution of the rent, according to predefined amounts and dates, regardless of the revision or indexation mechanisms. It thus offers a certain flexibility to the lessee, in particular when launching its activity, by lightening its initial charges which will then gradually increase, in accordance with the contractual stipulations.

A distinction should be made between tiered leases and rent-free leases. The latter consist of a temporary reduction in rent, or even a total exemption, for a specified period, due to circumstances specific to the lease.

The legal revision of the rent will take place with regard to a reference index, determined according to the activity carried out (ILC; ILAT since the Pinel Law of 18 June 2014).

In addition, the legal revision makes it possible in particular to fix the rent at the rental value if a material modification of the local commerciality factors is demonstrated and a variation of more than 10% of the rental value at the rate of said material modification.

Beyond the legal revision, nothing prevents the parties from providing for an automatic revision of the rent. In this case, we will talk about a sliding scale clause, which is contractually defined in the lease.

The sliding scale clause (indexation clause)

The indexation clause, or sliding scale clause, falls under Article L.145-39 of the French Commercial Code, which provides that:

“In addition, and by way of derogation from Article L. 145-38, if the lease is accompanied by a sliding scale clause, the revision may be requested whenever, through the operation of this clause, the rent is increased or decreased by more than one quarter compared to the price previously fixed contractually or by judicial decision. The change in rent resulting from this revision cannot lead to increases greater, for one year, than 10% of the rent paid in the previous year. The purpose of

these clauses is to change the amount of rent according to a benchmark index (often the ILC or the ILAT, see the CCI) automatically, without it being necessary to request its application. They thus make it possible to ensure a certain economic stability for both the lessor and the lessee, by keeping the rent in line with the evolution of the economic situation.

In the same way, the flat-rate increase clauses, that is to say setting a predetermined and regular increase in the rent without reference to an economic index, are valid (Cass. 3rd civ., 22 June 2022, No. 21-16.042).

The indexation clause has several advantages:

• it guarantees a regular and predictable evolution of the rent;
• it makes it possible to avoid an excessive discrepancy between the contractual rent and the economic reality;
• it can go up or down, depending on the evolution of the chosen index.

However, this mechanism has certain limitations:

• the chosen index must be related to the activity carried out on the premises;
• the clause cannot have the effect of playing only upwards, if necessary it could be deemed unwritten;

In addition, the conventional revision makes it possible to fix the rent at the rental value if it is demonstrated, through indexation, a variation in the rent of more than 25%, compared to the price previously fixed.

In practice, the indexation clause therefore constitutes a tool for contractual optimization of the rent, insofar as it secures the lessor’s profitability while providing for an objective and supervised evolution for the lessee.

Today, more than in the past, these modes of rent evolution constitute a tool for negotiating the commercial lease, particularly with regard to the draft Law for the Simplification of Economic

Life.

Adopted by the Senate on 22 October 2024, the Simplification Bill was approved by the Assembly on 17 June 2025.

The said project intends to create Article L.145-38 of the Commercial Code, which would provide:

“By way of derogation from Article L. 112-1 of the Monetary and Financial Code, the clause whose purpose or effect is to regulate, in the same proportions, upwards and downwards, the annual variation in the commercial rent index taken into account for the revision of the rent in application of Articles L. 145-38 and L. 145-39 of this Code is authorised in the lease of premises for commercial use.

 Thus, the tunnel clause would make it possible to regulate, in the same proportions, upwards and downwards, the annual variation in the commercial rent index, thus making it possible to avoid excessive variations in the rent during the lease.