The revision of the rent during the commercial lease

Your commercial rent is too high, several years remain to run before the term or renewal of your commercial lease.

So how do you get a reduction in your rent during a commercial lease?
 

We will see together the mechanism of Article L. 145-38 of the Commercial Code. This article makes it possible to fix the rent at the rental value, determined according to the provisions of the Commercial Code, without waiting for the renewal of your commercial lease.The
conditions to be respected are the following: 

• The request for revision of the commercial rent must be made at least 3 years after the date of entry into possession of the lessee or after the starting point of the renewed lease.
• Evidence must be provided of a material change in local commercial factors that in itself led to a variation of more than 10% in the rental value

• The material modification invoked must have occurred or produced its effects between the last fixing of the rent and the request for revision. 

What is a material change in local factors of commerciality?

It is a concrete and certain modification of elements related to (i) the importance of the city, the neighborhood or the street where the business is located, (ii) the location of the commercial premises, (iii) the distribution of the various activities in the neighborhood, (iv) the means of transport, etc. 

Examples of material changes in local factors of commerciality recognized by case law: 
• Pedestrianization of a street
• Construction of a subdivision
• A significant change in access to public transport

Is it possible to invoke the benefit of Article L. 145-38 of the Commercial Code to obtain a modification of the amount of the rent during the commercial lease because of the health crisis?

In general, this crisis has impacted rental values, which are bearish.

However, this downward trend is not uniform. It is appropriate to reason by nature of activity and/or by geographical sectors:

• Thus, while the hotel business has been very affected by the health crisis linked to the COVID 19 epidemic, some catering activities have managed to resist, in particular by developing the sale of takeaways.
• In terms of geographical areas, shopping centres were generally more impacted than shops located in the city centre. 

In addition, in times of crisis, the criterion of the material modification of local commercial factors is met by the vacancy of commercial premises located in a nearby environment or cells of the same shopping mall.

Although the courts have not yet ruled, the conditions could therefore be met.

In any event, and provided that the lessees could achieve substantial savings by requesting a reduction in their commercial rent as part of a review request, we believe that traders and buyers of commercial premises would be well advised to benefit from a study on the rental value of their commercial premises.

Our firm works with a law firm, Colomer expertises, to assess this rental value.

An online tool on our website allows you to order a brief notice of rental value :

Order a brief review of rental value 

This involves filling out a form and sending us the necessary information: your commercial lease, a notice of expiry and the plan of your commercial premises. The value notice that is issued makes it possible to measure theopportunity to negotiate its commercial rent , to revise its commercial rent, or to dispute the renewal value proposed by its lessor.