Impact of the work for setting the rent of the hotel establishment

The setting of the rent in terms of hotel lease renewal includes specificities specific to the”use” of the premises for a single use as well as the application of the provisions of the Tourism Code specific to the hotel activity and the improvement work carried out on the premises. The question of the impact of these hotel works for the determination of the rent of the renewed lease of the hotel establishment arises.

For the purpose of fixing the rent of the renewed lease, hotel establishments are qualified as monovalent within the meaning of Article R145-10 of the Commercial Code. These are “premises built for a single use” so that the lease price is determined according to the practices observed in the industry concerned. For hotels, experts and jurisdictions generally apply the so-called “hotelier” method. This method, which has undergone some changes due in particular to the extensive use of online booking sites, will not be declined in this short video.

On the other hand, the impact of the equipment work and improvement of hotel establishments will attract our attention. This work because of their own regime set by the Commercial Code has an impact on the setting of the rent of the renewed lease.

It is recalled that the Commercial Code allows the operator of a hotel to carry out equipment and improvement work on its premises, without the agreement of the landlord when the structural work is not affected, subject to compliance with a particular formality.

The same Code also provides for a specific regime for the accession of such equipment and improvements.

In this regard, Article L.311-3 of the Tourism Code provides that “ During the term of the current lease and that of the renewed lease following it and for a period of twelve years from the expiry of the execution period mentioned in article L. 311-2, the owner cannot claim any increase in rent due to the incorporation into the building of the improvements resulting from the execution of the works mentioned in article L. 311-1. »

Any stipulations of the lease relating to the acceptance of improvements at the end of the lease will have no impact as long as the work in question falls under the list of equipment and improvement work of Article L.311-1 of the Tourism Code. This list is broad and the work in question can be important. The pillars are works affecting the distribution of water, gas and electricity from telephone, radio and television receiver installation work; manager relating to sanitary equipment; sewerage; installation of central heating or distribution of hot or air-conditioned air; installation of elevators, freight elevators and flat lifts; kitchen and galley layout work; and swimming pool construction work.

These works listed by Article L.311-1 of the Tourism Code cannot be valued in rent for a period of 12 years. In practice, when setting the rent of the renewed lease, the completion of this hotel work gives rise to a deduction from the renewal rental value.

In practice, the question arises of distinguishing these hotel works from the article of L.311-1 of the Tourism Code from those which would not fall under it and which would remain subject to the specific stipulations of the lease relating to an accession at the end of the lease or at the end of enjoyment.