The drafting of a commercial lease agreement must meet certain formal and substantive requirements.
Formal requirements for commercial leases
In terms of form, the lease may be entered into in the form of a notarised document, a private document or even orally.
Oral commercial lease
Oral commercial leases are rarely used and are not recommended, particularly because of the difficulties of proving the terms of performance and the determination of the parties. Between traders, proof of the commercial lease and its content can be provided by any means.
On the other hand, if the lessor is not a trader, proof of the existence of the commercial lease will require commencement of performance, i.e. occupation of the premises by the lessee, regular payment of rent and absence of opposition by the lessor. The terms and conditions of the lease, other than the minimum terms and conditions, will be proven in the same way.
Private-sealed commercial leases
A private lease is a legal document signed by the parties without any formalities. This type of contract does not have a date that can be invoked against third parties to the agreement, unless it is registered with the tax office.
Authentic commercial lease
As well as providing a date certain, a notarised commercial lease will enable each party to protect its interests under the best possible conditions.
A notarised commercial lease has evidential value. In fact, article 1319 of the Civil Code defines the value of a notarised deed as a form of evidence in the following terms: "a notarised deed is full proof of the agreement it contains". This means that, within the limits where full faith is attached to the deed, it can only be challenged by a specific and very cumbersome procedure, i.e. registration of forgery.
The evidentiary value of the instrumental deed is binding on the contracting parties and their heirs or assigns, as well as on third parties.
Also unlike a private document, an authentic instrument is enforceable.
This means that, on production of an enforceable copy, it is possible to call in the police and take direct action to recover debts.
Creditors are therefore advised to draw up a notarial deed rather than a private deed if they wish to protect themselves against any default by their debtor.
It should be noted that a commercial lease must be drawn up in notarial form in certain cases:
- Leases of more than twelve years;
- leases relating to buildings used for entertainment requiring authorisation from the Minister of Culture;
- leases relating to a public house.
On this last point, article 504 of the General Tax Code stipulates that "it is forbidden for tobacconists to conceal drinks in their homes or elsewhere and for all owners or principal tenants to allow drinks belonging to tobacconists to enter their homes, without there being a lease by deed for the cellars, storerooms, shops and other places where the said drinks are placed".
Admittedly, this is a purely fiscal obligation, which enables the indirect taxation authorities to know with certainty where the tobacconists' shops are located and to prevent 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.
The substantive obligations of a commercial lease
As regards the substance of the commercial lease, certain clauses must be included. These obligations are either inherent in all leases, or are specific to commercial leases.
Obligations inherent in all leases
These are the lessor's obligations:
- The obligation to deliver the property, which will result in particular from the handing over of the keys;
- And the obligation to guarantee the tenant peaceful enjoyment of the property.
And on the other hand, the lessee's obligations, such as paying the rent or maintaining the premises.
Obligations specific to commercial leases
Commercial leases must comply with certain public policy rules specific to their system. A commercial lease must include a right to renewal for the tenant, a minimum term of nine years, and comply with the rules governing despecialisation, termination and rent review procedures. Lastly, the contract may not prohibit the transfer of the leasehold rights to the purchaser of the business.
Apart from these rules, the commercial lease may be freely drafted.
Finally, it should be noted that certain diagnostic reports, such as the energy performance report, the natural and technological risk report and the asbestos report (for premises built under a building permit issued before 1 July 1997), must be attached to the commercial lease.