Eviction Indemnity in French Commercial Leases: The Accessory Indemnities

Overview: An Open List Payable Before Departure

Article L. 145-14 of the Code de commerce provides that the eviction indemnity "includes in particular" the market value of the fonds de commerce, together with normal removal and relocation costs and transfer duties. The words "includes in particular" make the list non-exhaustive: any specific loss directly caused by the eviction that the tenant can evidence is compensable (CA Paris, 19 May 2021). The accessory indemnities must be paid before the tenant leaves — the landlord cannot make payment conditional on the tenant first proving that they have actually relocated. The landlord can, however, seek repayment of accessory indemnities after the fact if the tenant does not relocate (Cass. 3e civ., 28 March 2019).

The Accessory Indemnities in Detail

Transfer Duty Indemnity (Indemnité de Remploi)

This indemnity covers the transfer taxes and transaction costs the tenant will incur when acquiring an equivalent business or lease right. Transfer taxes under Article 719 of the Code général des impôts are applied on a sliding scale: 2% on the price tranche between €23,000 and €107,000; 0.60% on the tranche from €107,000 to €200,000; and 2.60% on the amount above €200,000. Transaction and advisory costs are assessed as a percentage of the principal indemnity, generally capped at around 10%. Where the tenant has already acquired a replacement business, the actual transfer costs paid are reimbursed provided the replacement is broadly equivalent. The indemnity is not automatic: it does not arise where the tenant does not relocate, or relocates into their own premises. The burden of proving non-relocation lies with the landlord.

Commercial Disruption (Trouble Commercial)

This indemnity compensates the management time and operational cost of handling the eviction proceedings and searching for a replacement location. By established practice, it corresponds to three months of the average adjusted EBITDA over the last three years. Where EBITDA is zero or negative, courts look to other parameters such as revenue or payroll. Where there is no relocation, this indemnity is generally not awarded.

Removal Costs (Frais de Déménagement)

Normal removal costs are recoverable where the tenant is relocating. Costs are assessed on the basis of estimates obtained by the tenant — invoices are not required where the transfer has taken place (Cass. 3e civ., 17 September 2013). Landlords should obtain independent estimates to be in a position to challenge inflated figures.

Fit-Out Costs (Frais de Réinstallation)

These are the costs the tenant must incur to fit out a new location with installations equivalent to those being left behind. The Court of Cassation confirmed that fit-out costs are owed both in the case of a business transfer and in the case of a business replacement — and that an accession clause (under which tenant improvements vest in the landlord at lease end without compensation) does not reduce this entitlement (Cass. 3e civ., 13 September 2018, n° 16-26.049). Courts require specific evidence of costs the tenant will actually incur for their particular type of operation, apply a depreciation discount for partly-amortised fixtures, and will not cumulate this indemnity with unamortised fixtures from the same premises.

Unamortised Fixtures (Agencements Non Amortis)

The residual book value of fixtures attached to the vacated premises not yet fully amortised at the time of eviction. In a replacement scenario (business lost), unamortised fixtures are generally incorporated into the principal indemnity and not awarded separately. In a transfer scenario, they are routinely awarded in addition to the principal indemnity. Cannot be cumulated with the fit-out indemnity (which covers the new premises).

Double Rent (Double Loyer)

Where the tenant must pay rent on new premises while still paying the occupation indemnity on the old premises (during the overlap period for fitting out or moving), the cost of this double rental obligation is recoverable as an accessory. The period covered is typically the duration needed for removal or construction works, defaulting to one month where no other basis can be established. Not available in a replacement scenario (business lost) — only in the transfer scenario (CA Paris, 19 November 2020). Cannot be cumulated with the fit-out indemnity.

Stock Losses (Pertes sur Stock)

Where the tenant holds perishable or unsellable stock that cannot be cleared in the ordinary course before they must vacate, the loss is compensable. The tenant must demonstrate that normal sales or transfer of stock before departure was not feasible. Where the tenant can sell stock in the normal course before the departure date, no loss is made out (CA Paris, 7 June 2023). Stock must be separately evidenced — valuation barèmes used for eviction indemnity calculations exclude stock.

Redundancy Costs (Indemnités de Licenciement)

Statutory redundancy payments for employees made redundant directly as a result of eviction are recoverable from the landlord, supported by documentation. However: the landlord is only liable for eviction-linked redundancies — not for holiday pay or notice pay arising from the employment contract itself; not for redundancies caused by the tenant's own financial difficulties; only the workforce corresponding to the fonds de commerce at the date of the refusal of renewal is relevant (not employees added by merger or restructuring during the holdover period). The full redundancy cost is not knowable until after the right of repentance has expired — a significant source of financial uncertainty for the landlord.

Other Accessory Indemnities

The list is genuinely open. Among specific cases recognised in case law: administrative costs of updating the commercial register; change-of-address communication costs; contract termination penalties (beer supply agreements, franchise agreement fees, maintenance contracts specific to the vacated premises); loss of living accommodation forming part of the leased premises where useful or necessary for the business operation (Cass. 3e civ., 4 July 1972); reprinting and re-labelling costs for products with mandatory labelling requirements. ICPE environmental remediation costs are not an accessory eviction indemnity (Cass. 3e civ., 22 June 2022, n° 20-20.844). The security deposit must be repaid but no separate indemnity arises at that head.

This article is for general information and educational purposes only. It does not constitute legal advice and does not create a lawyer-client relationship. Laws and regulations may have changed since publication. Always seek qualified French legal advice on eviction indemnity matters in a French commercial lease.