Rent variations on renewal of commercial leases

Article L145-34 of the French Commercial Code strictly regulates rent variations on renewal of commercial leases.

1. cap on rent variations :

– When renewing a commercial lease with a term not exceeding nine years, the variation in rent may not exceed the variation in the quarterly index of commercial rents (ILC) or the quarterly index of rents for tertiary activities (ILAT), since the initial setting of the rent for the expired lease.

– In the absence of a contractual clause specifying the reference quarter for this index, the variation calculated over the nine-year period preceding publication of the latest index is taken into account.

2 Renewal after the expiry date :

– If the lease is renewed after the initial expiry date, the change in rent is calculated on the basis of the last published index and over a period equivalent to that between the initial lease date and the actual renewal date.

3 Tacit extension and term exceeding twelve years :

– The capping provisions cease to apply when, as a result of a tacit extension, the lease term exceeds twelve years.

4 Significant modification of specific elements or clauses :

– In the event of significant modification of the elements mentioned in article L. 145-33, or if the contract includes a clause relating to the duration of the lease allowing for derogation from the capping rules, the resulting variation in rent may not exceed 10% of the rent paid the previous year, for each year.

These provisions are designed to protect tenants from excessive rent increases, while taking account of economic trends through official indexes. The 10% cap in the case of significant changes is an additional precautionary measure to ensure a certain predictability and stability of rents under commercial leases.

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