Compensation at the end of the lease: Accession and restitution of the premises

When drafting the lease and returning the premises, how to anticipate the difficulties relating to the condition of the leased premises, in particular with regard to the accession and restoration clauses stipulated in the commercial lease?

Many questions arise during the return of the premises at the end of the commercial lease (fate of the work carried out by the tenant, state of return of the commercial premises, compensation to the lessor, etc.).

In the first place, reference should be made to the stipulations of the commercial lease.

This lease generally organizes the procedures for returning the premises.

This means that particular attention should be paid during the negotiation of the commercial lease and to check the clauses proposed by the lessors.

The formulas used can be different: restitution in the state of use, restitution in good condition, or restitution in perfect condition.

Recall that the Civil Code provides in its article 1731, that “If no inventory has been made, the lessee is presumed to have received them in good condition from rental repairs, and must make them so, unless proven otherwise“.

Fortunately, the Pinel law, in particular its provisions codified in Article L. 145-40-1 of the Commercial Code, came to impose the obligation to establish an inventory when concluding a commercial lease:

« When the tenant takes possession of the premises in the event of the conclusion of a lease, the transfer of the right to the lease, the transfer or transfer of the land free of charge and during the Restitution of Premises, an inventory is drawn up jointly and amicably by the lessor and the lessee or by a third party mandated by them. The inventory is attached to the rental contract or, failing that, kept by each of the parties.

If the inventory cannot be established under the conditions provided for in the paragraph above, it will be established by court bailiff, on the initiative of the most diligent party, with the costs shared equally between the Parties.

The lessor who has not done all due diligence to carry out the inventory cannot invoke the presumption of Article 1731 of the Civil Code “.

It should also be remembered that if the tenant is liable for damage to the premises during the term of the lease, case law recalls that it is necessary to take into consideration the age of the facilities and installations but also the lack of maintenance that would be the responsibility of the lessor under certain clauses of the lease.

Thus the different jurisdictions apply rebates on the necessary cost of restoration work.

For example, a tenant was able to benefit from a 20% allowance for obsolescence due to a nine-year occupation (CA Bordeaux, 19 Oct. 1995, Juris-Data No. 047836)
The Court of Appeal of Agen was able to make a deduction of 30% with regard to eight years of rental (CA Agen, 1st ch., September 6, 1995, Juris-Data No. 045153).

This is a sovereign assessment of the trial judges, on a case-by-case basis.

On the other hand, it should be noted that a body of case law considers that the compensation of the lessor, due to the damage affecting the leased building which is the consequence of the non-performance by the lessee of his obligations, is not subject to the execution of repairs by the lessor nor to the actual commitment of expenses (Cass. 3ème civ., 15 Nov. 2018, No. 17-22.130; Cass. 3ème civ., 3 Apr. 2001, No. 99-13.668).

Finally, the clauses of the lease relating to the accession of improvements, embellishments, works, carried out by the lessee, are also important, sincethey can sometimes provide that the lessor reserves the possibility of an initial restoration upon the departure of the lessee.

Therefore, such a clause is applicable and the lessee must proceed with the restoration of the premises.

However, these clauses will allow the lessee to apply an allowance on the rental value, which may be proportional to the amount of work carried out by the lessee, or even lump sum (Cass. 3rd civ., June 18, 2013, No. 12-22226).

They may also prevent a de-capping of the rent in view of the significant modification of the characteristics of the premises in question (Cass. 3ème civ., 14 June 2018, No. 17-14599; Cass. 3ème civ., 17 November 2021, No. 20-16802).

Indeed, the High Court considers that the renewal of the lease is incompatible with the return of the premises to their original state and that the premises should be assessed at the time of renewal, without taking into account the work carried out by the commercial tenant.

Ultimately, the negotiation of these clauses of accession and restoration of the premises are of particular importance that should be controlled in order to prevent a rental dispute.