Commercial leases for public houses are subject to the general rules governing commercial leases. They benefit from the status of the 1953 decree, provided that they are commercial in nature and constitute a genuine commercial enterprise. The statute applies to all public houses, although there are some specific rules relating to the form and content of the lease and the special conversion option.
Duration of the commercial lease
Commercial leases are subject to the general rules governing commercial leases set out in the 1953 decree.
As the rules governing commercial leases are a matter of public policy, they are binding on the parties to the lease of the commercial premises of the public house, particularly as regards the term, which is intended to guarantee stability for the trader.
As no derogation is possible (apart from a derogatory lease), the lease of the premises is therefore for a term of nine years. However, in accordance with the provisions of articles L 145-4 and L 145-9 of the French Commercial Code, the lessee will have the option of giving notice of termination at the end of each three-year period, by bailiff's writ sent to the lessor at least six months before the end of the three-year period.
The lessee also has the right to renew the lease.
Form of commercial lease
Article 504 of the General Tax Code requires pubs to have a written lease, and more specifically, a notarial deed. This article states that "it is forbidden for publicans to conceal drinks in their homes or elsewhere, and for all owners or principal tenants to allow drinks belonging to publicans to enter their homes, unless there is a lease by deed for the cellars, storerooms, shops and other places where the said drinks are kept".
It is therefore important for the tenant and the owner not to be satisfied with a simple private lease, but to have the lease drawn up by notarial act. Admittedly, this is a purely fiscal obligation, which enables the indirect taxation authorities to know with certainty the premises of the lessees and to avoid fraud. However, according to established case law, the owner of the premises is presumed to be the owner of the drinks stored there, and only an authenticated lease will destroy this presumption, thereby protecting the owner from any prosecution for fraudulent handling of drinks or undeclared or prohibited drinks.
It is also important to bear in mind the qualities of an authentic deed compared with a private deed.
Firstly, an authentic instrument has probative value. Article 1319 of the Civil Code defines the value of an authentic instrument as a form of evidence in the following terms: "an authentic instrument is full proof of the agreement it contains". The deed can only be challenged by a very cumbersome procedure: registration of forgery.
The authentic instrument is authentic both with regard to the contracting parties and their heirs or assigns, and with regard to third parties.
In addition, the authentic instrument is enforceable.
This means that, on production of a copy bearing the executory clause, the police can be called in and the measures provided for by law can be carried out directly.
Creditors are therefore advised to have a notarial deed drawn up rather than a private document if they wish to protect themselves against any default by their debtor.
Conversion option
With a view to combating alcoholism by reducing the number of public houses, the legislature has introduced a highly original provision designed to encourage the conversion of public houses into other businesses, without the need for the owner's consent. Article L. 3331-6 of the French Public Health Code states that "The owner of premises given over to the public for use as a public house may convert the premises into another business without the owner's consent.The owner of a leased premises may not, notwithstanding any agreement to the contrary, even if entered into previously, oppose the conversion, by the lessee or the transferee of the right to the lease, of a 3rd or 4th category public house, either into a 1st or 2nd category public house, or into another business, provided, however, that this does not result in inconveniences for the building, its inhabitants or the neighbourhood that are greater than those resulting from the operation of the business that has been closed."
If a third or fourth category premises(licence 3 or licence 4) can be converted into any other business, this can only be done insofar as this new activity does not present "greater inconvenience for the building, its inhabitants or the neighbourhood than that resulting from the business that is being closed down".
Where a public house meets the conditions set out in article L. 3336-1 of the Public Health Code, and the operator wishes to change his business, he must first notify his landlord of his intention by registered letter with acknowledgement of receipt (failure to do so could result in the termination of his lease). If the landlord agrees, all they have to do is amend the lease. If the landlord considers that the conditions of article L. 3336-1 have not been met, and in particular that the disadvantages of the conversion outweigh those presented by the debit, he will refer the matter to the tribunal de grande instance, which will rule on his objection.
The existence of article L. 3336-1 of the French Public Health Code constitutes an advantage that goes beyond ordinary law for any lessee operating a public house. This legal option to despecialise, which goes so far as to constitute a genuine "free right to transfer the lease" in favour of the lessee, gives the public housekeeper a very privileged position compared with other commercial lessees.
In each case, the judge will have to analyse and compare the disadvantages presented by the existing public house with those that may be presented by the proposed new business, i.e. the disadvantages "likely to damage the buildings or harm the health or peace of their inhabitants or neighbours".