The so-called Pinel Act of 18 June 2014 introduces a host of provisions affecting the transfer of commercial leases and encourages public intervention in economic life.
First of all, when a retailer transfers his lease, particularly when selling his business, there is often a clause in the contract requiring the transferor to be jointly and severally liable with the new lessee to guarantee the proper payment of charges and rent.
The Pinel Act now provides a framework for these clauses, limiting their effect to three years from the transfer of the lease, and requiring the lessor to inform the transferor within one month of any default in payment.
Secondly, the reform offers the beneficiary of a universal transfer, of which the lease would form part, the possibility of substituting itself for the initial lessee in his rights and obligations, notwithstanding any clause to the contrary, in the case of demergers, universal transfers of assets carried out under the conditions set out in article 1844-5 of the Civil Code and partial contributions of assets. Until now, this transfer was only provided for in the case of mergers.
A preferential right has also been created in favour of the retailer in the event of the lessor selling the commercial premises during the term of the lease.
This limitation may apply in three cases:
As with any right of pre-emption, the benefits are extremely limited, particularly in view of the formalities involved and the potential for abuse. A lessor will offer the premises to his lessee himself in order to save time. If the tenant is unwilling or unable to buy, a preferential right will change nothing. What's more, the commercial lease already offers retailers a highly protective status. The fact that the premises are sold to a third party could not jeopardise the continued existence of the business.
On the other hand, the creation of this right will lengthen the time taken to sell and opens up opportunities for the retailer to abuse his position of strength to discourage the owner from selling at a better price to another potential buyer. In effect, the lessor will notify the retailer of his intention to sell at the price and conditions envisaged. The tenant then has 2 months in which to accept or refuse. If they agree, a second period of 4 months begins to finalise the sale if the retailer wishes to take out a loan. In the frequent event that the price and terms of the sale become more advantageous, following negotiation with the prospective buyer, the retailer's preferential right must again be exercised within the same timeframe. An ill-intentioned tenant could therefore use this threat to make the vendor lose 6 months in order to negotiate a lower price.
The creation of this preferential right is clearly a bad provision that complicates the legislation and formalities, under the guise of good intentions that are disconnected from reality.
Fortunately, our legislator still has a little pity and empathy for the family of the 'bad' lessor, by excluding from the scope of this preferential right transfers to the lessor's spouse, or to an ascendant or descendant of the lessor or his spouse. The same applies in the event of the sale of the commercial premises to the co-owner of a commercial complex or the sale of a building containing commercial premises.
It should be noted here that the trader's preferential right can apply to contracts in force from the sixth month following the enactment of the so-called Pinel law, i.e. from 18 December 2014.
Lastly, the new law strengthens the ways in which the public sector can intervene in economic life to maintain the supply of shops and craft businesses in town centres by once again amending town planning law.
As a result, the craft and commercial development document for territorial coherence schemes, which was abolished by the Alur Act of 24 March 2014, has once again been put back on the agenda by the so-called Pinel Act, just 3 months after it was abolished!
The reform also gives the Commission nationale d'aménagement commercial (National Commission for Commercial Development) the power to examine any development project with a sales area of at least 20,000 m².
Another new feature, which is just as pointless but far more disturbing, is the extension of the scope of the right of pre-emption.
Local authorities can now delegate their right of pre-emption to the concession holder of a development operation, a public establishment for inter-communal cooperation or a holder of a contract for the revitalisation of craft and commercial activities. In addition, in order to exercise this right of pre-emption, the beneficiary must be informed of new information in addition to the price, i.e. the number of employees, the nature of their employment contract, turnover and the terms and conditions of the sale.
This commercial right of pre-emption, which was useless in the past, will be just as useless today, but will now require more cumbersome formalities. Completely out of step with the financial resources of local authorities, priorities and the liberalism that pervades the business world, this right of pre-emption is much ado about nothing!
It should be noted that the two-year period between the acquisition and the handover of the business or lease may be extended to three years if the municipality leases out the business.