Assigning a French Commercial Lease: What You Are Actually Transferring

What a Lease Assignment Actually Is

The cession du droit au bail is a contract by which the tenant — the cédant — transfers to a third party — the cessionnaire — the benefit of the lease. It combines two distinct legal effects: the assignment of the right of enjoyment as a credit in favour of the assignee, and the transfer of the obligation to pay rent and perform all other lease conditions. After a valid cession, the assignee steps into the original tenant's position as the new occupying party under the lease. The assignment may be made for value or gratuitously. It may occur as part of a sale of the business as a going concern, as part of the universal transfer of the professional patrimony of a sole trader (since May 2022), or as a standalone disposal of the lease right. Critically, the assignment transfers only what the cédant has to give: the assignee takes the lease as it stands, with all its rights and obligations, including any restrictions on sub-letting, change of use, or further assignment.

Lease Assignment Versus Business Sale: The Fundamental Distinction

The key criterion is the clientèle. A fonds de commerce requires, at minimum, a clientele — the ensemble of customers attached to the business. Without a clientele, there is no fonds. The Cour de cassation has consistently held that a clientele is attached to the tenant's activity, not to the premises: customers follow the business, not the location. Courts apply a substance-over-form analysis and disregard whatever label the parties have chosen. If the tenant has already ceased trading and deregistered before the transfer takes place, there is no longer a living clientele to transfer — the transaction will be characterised as a standalone lease assignment regardless of how it is documented. Conversely, if the tenant is actively trading and the acquirer continues the same or related activity, the transaction is likely to be characterised as a business sale even if the parties called it a lease assignment.

Which Operations Constitute a Lease Assignment

The analysis centres on one question: has there been a genuine substitution of a new person as tenant, whether a natural person or a legal entity, in place of the original?

The Share Sale Question: The Most Important Grey Area

The principle is clear: a sale of shares in a company that holds a commercial lease does not change the legal identity of the tenant. The same legal entity remains the lessee before and after the share transfer — there has been no substitution of person, and the rules on cession do not apply. This holds even where 100 per cent of the shares are transferred. This is why the share sale route is frequently preferred over an asset deal in French commercial property transactions: it allows a change of beneficial control without triggering the lease's cession provisions, structurally avoiding landlord consent requirements and pre-emption rights.

The Cour de cassation has however created a limited exception. The third civil chamber accepts that a share sale can be requalified as a disguised lease cession where the transaction was structured to defraud the landlord's rights. The commercial chamber goes further only where the corporate tenant is a fictitious company — a shell with no real substance whose shares are being used as a proxy for the lease itself. Outside these two narrow scenarios, a genuine share sale in a genuine company is not a lease assignment.

The Universal Transfer of Professional Patrimony: A 2022 Development

Since 15 May 2022, French law has recognised the transfert universel du patrimoine professionnel (TUP), allowing an entrepreneur individuel to transfer their entire professional patrimony — including all assets and liabilities, and the commercial lease — to a third party in a single transaction. The legislative reform explicitly brought the TUP within the same public-order protection as the cession de fonds de commerce: any lease clause that would prohibit the transfer of the lease as part of a TUP is deemed unwritten, just as a prohibition on assigning within a business sale is unenforceable (Art. L 145-16, al. 1 C. com. as amended). For older leases concluded before May 2022 that authorise cession only within the framework of a business sale, the prevailing view in the literature is that such clauses should be interpreted to cover a TUP as well, by analogy with the legislative intent of the 2022 reform.

The Effect of Assignment Restrictions on Lease Value

Restrictions on the assignability of a lease have a direct and quantifiable impact on its market value. A lease that can only be assigned to the acquirer of the operating business — and therefore cannot be sold on a standalone basis — is worth less as an asset than one that can be freely assigned. The Cour de cassation has confirmed that the absence of a free right of assignment reduces the value of the lease right (Cass. 3e Civ. 27-4-1979). This has two practical consequences: in any valuation exercise — whether for financial reporting, dispute resolution, eviction indemnity calculation, or acquisition due diligence — the assignability profile of the lease is a material input. And in negotiating the terms of a new lease, the scope of the assignment rights is a key commercial point: a tenant who accepts narrow assignment restrictions is accepting a reduced-value asset for the duration of the lease.

This article is for general information and educational purposes only. It does not constitute legal advice. The legal framework described reflects French law and jurisprudence as at 2025. Commercial lease assignments involve complex legal analysis specific to each transaction. Always seek qualified legal advice before any assignment, acquisition, or restructuring involving a French commercial lease.