The Caen Court of Appeal has handed down two rulings on this issue.
Legal analysis: Classification of a hotel establishment and setting the rent in a commercial lease
In its ruling of October 9, 2025 (No. 20/01869), the Caen Court of Appeal handed down an important decision concerning the classification of a hotel establishment and the setting of rent under a commercial lease. This ruling highlights several key points of commercial law and commercial lease law. Here is a detailed analysis of this decision.
Background to the case
The case concerns a commercial lease for two lots located in a hotel residence. The lessors and the lessee disagreed on the classification of the establishment: hotel or tourist residence. This distinction is crucial, as it influences the terms and conditions for setting the rent.
Classification of the establishment: hotel or tourist residence?
The Court of Appeals ruled in favor of classifying it as a hotel. Several factors were taken into account to justify this decision:
- Declared activity: The Kbis extract for the tenant company mentions hotel activity, which confirms the operator’s intention.
- Characteristics of the rooms: The rooms have neither a kitchen nor a kitchenette, which makes them unsuitable for the independent stays typical of tourist residences.
- Absence of specific tax advantages: The lessors did not demonstrate that they benefited from tax advantages specific to investments in a tourist residence.
The establishment is therefore classified as a hotel, not a tourist residence, which has direct implications for the calculation of rent.
Rent setting: traditional hotel method
The Court confirmed that the rent should be set at the rental value, due to the single-purpose nature of the premises. These are therefore exempt from the cap rule. The hotel, rated 4 stars, is located in a seaside resort, close to the beach, which also influences the rental value.
Method of calculating rent
The appointed expert applied the classic hotel method to determine the rent. This method is based on several criteria:
- Rates charged by the operator: Prices vary according to the season and the view offered (view of the port, view of the sea, or no specific view).
- Occupancy rate: Set at 61%, this rate reflects the actual use of the rooms.
- Percentage of revenue: Estimated at 17%, this percentage is applied to the theoretical annual revenue.
- Discount deduction: A discount rate of 15% was taken into account.
Exclusion of breakfast revenue
The Court ruled that breakfast revenue should not be added to the theoretical annual revenue for the calculation of rent. This decision is in line with the traditional hotel method.
Deduction for hotel renovations: denied
The lessee requested a deduction for hotel renovations, but this request was denied. The Court emphasized that the lessee had not complied with the notification requirement set forth in Article L. 311-2 of the Tourism Code. In the absence of this prior notification to the lessors, the allowance could not be granted.
Amount of rent set by the Court
At the end of its analysis, the Court set the annual rent at €5,247 for the two lots. This amount includes the maintenance of the rent supplement provided for in the lease, which grants the lessors the right to two short stays during the high season.
Conclusion
This ruling by the Caen Court of Appeal illustrates the importance of the legal classification of premises in the context of commercial leases. The distinction between a hotel and a tourist residence can have significant consequences on tax advantages and the terms and conditions for setting rent. In addition, it reminds lessees of the importance of complying with legal obligations, particularly with regard to notification of works, in order to benefit from any tax allowances.
Professionals in the hotel sector and investors must therefore be mindful of these legal aspects in order to avoid disputes and optimize their investments.
The document presents a decision by the Caen Court of Appeal, 2nd Civil Chamber, handed down on October 9, 2025 (No. 20/01872). It concerns a dispute relating to a commercial lease for two lots located in a hotel residence. The classification of the establishment is at the heart of the debate: it is determined that the building must be considered a hotel and not a tourist residence. This conclusion is based on several factors: the Kbis extract of the tenant company mentions a hotel activity, the rooms have neither a kitchen nor a kitchenette, and they do not allow for independent stays as in a tourist residence.
In addition, the lessors did not prove that they benefited from tax advantages specific to investments in tourist residences. The rent is set at the rental value, as the premises are single-purpose and are not subject to the cap rule. The hotel, rated 4 stars, is located in a seaside resort, close to the beach.
The expert used the classic hotel method to determine the rent, based on the rates applied by the operator, which vary according to the season and the view offered (view of the port, view of the sea, or no specific view). Breakfast revenue was not included in the calculation of the theoretical annual revenue. The parameters taken into account include an occupancy rate of 61%, a percentage of revenue of 17%, and a discount rate of 15%.
The lessee is not eligible for a tax deduction for hotel renovations, as he did not inform the lessors of his renovation plans, as required by Article L. 311-2 of the Tourism Code.
Consequently, the annual rent for a room is set at €2,202, with the rent supplement provided for in the lease being maintained, which grants the lessors the right to two short stays during the high season. In summary, the Caen Court of Appeal confirmed that the establishment in question is a hotel and not a tourist residence, which has implications for the setting of the rent.
The amount of rent was determined using the traditional hotel method, without including certain elements such as breakfast revenue or a deduction for unreported work. The annual rent for a room is set at €2,202, with a rent supplement for landlords.
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