Why the Premises Condition Is More Demanding Than It Looks
Article L 145-1, I of the Code de commerce applies the commercial lease statute to "leases of buildings or premises in which a commercial, industrial or artisanal business is operated." The premises condition generates some of the most contested litigation in French commercial lease law. The difficulty arises at the margins: the market trader who rents a defined pitch in a covered hall, the retailer who occupies a stand inside a department store, the operator who leases wall space for advertising, the logistics company that rents an open parking area — each may have a genuine commercial activity and a genuine contract, and yet still fail the premises condition.
The definition of immeuble for commercial lease purposes is more restrictive than the general civil law definition. Under Article 518 of the Code civil, immovables by nature include both land and buildings. For commercial lease purposes, the category is confined to buildings — structures not merely resting on the ground but incorporated into it. A structure anchored to the ground that cannot be maintained there by its own weight satisfies this definition, even if temporary or light (Cass. com. 10-6-1974 n° 73-10.696). A structure that can be lifted off the ground without breaking any connection to it does not.
Defining the "Local": Two Cumulative Conditions
Neither the Code civil nor the Code de commerce defines the concept of local. The courts have filled this gap by establishing two cumulative conditions, though their application has not always been consistent.
First Condition: An Enclosed and Covered Space?
The traditional first condition was that a local must be enclosed and covered (clos et couvert) and capable of receiving customers. This condition has been significantly softened. The Cour de cassation has now ruled that the statute can apply to an emplacement — a term broader than local that does not imply the existence of a structure at all — provided it is stable and permanent and forms part of a larger commercial ensemble (Cass. 3e Civ. 20-3-2014 n° 13-24.439). In other words, a space need not be enclosed and covered to qualify, as long as it satisfies the stability and permanence requirement. What cannot be avoided in any case is that the quality of construction is irrelevant — all that is required is that the activity be carried on in a permanent space (CA Basse-Terre 12-12-2022 n° 21/01142).
Second Condition: Stable and Permanent Occupation
The second, and now primary, condition is that the occupation must be sufficiently stable — meaning the landlord must not be free to impose mobility on the tenant at will. An emplacement that the landlord can modify, reduce, or relocate unilaterally cannot be a local for commercial lease purposes (Cass. 3e Civ. 24-2-1976 n° 333 ; Cass. 3e Civ. 20-2-1985 n° 83-16.019). Since the 2014 ruling, a qualifying emplacement must be well-defined, form part of a larger commercial ensemble, not be uncertain or subject to change, and the landlord must not have reserved the right to alter its footprint or location.
The decisive criterion for a qualifying local or emplacement under the current case law is not whether the space is enclosed and covered, but whether it is stable and permanent — and whether the landlord is free to move or alter it unilaterally. A space that can be modified or restricted at the landlord's discretion cannot qualify. An open emplacement that is precisely identified, permanent, and non-modifiable may qualify even without four walls and a roof.
What Qualifies and What Does Not: A Survey of the Case Law
The case law on specific types of premises is extensive. The same physical description — a kiosk, a stand, a parking space — can lead to opposite conclusions depending on the degree of stability and definition of the emplacement.
Advertising Walls, Rooftops and Gallery Emplacements
Walls, rooftops and spaces used for advertising display are firmly excluded from the statute, even where they are leased by a specialist advertising company and serve directly as the medium for its commercial activity (CA Douai 4-5-2023 n° 22/00072). The same exclusion applies to art gallery wall-hanging spaces: even where the convention covers a defined area during exhibitions and staff occupy the adjacent bureau year-round, if the lease is in substance a convention over variable, intermittent wall spaces rather than a defined enclosed local, the statute does not apply (Cass. 3e Civ. 20-11-1991 n° 1729).
Baraquements and Temporary Structures
A simple baraquement can constitute a local for commercial lease purposes if it was the object of the lease and was by common agreement of the parties intended for the operation of a fonds de commerce. The Cour de cassation has held that the rigorous standards of solidity and fixity required for constructions built on bare land by the tenant do not apply where an existing structure, however modest, was itself the object of the lease and agreed by both parties to serve as commercial premises (Cass. 3e Civ. 25-1-1977 n° 74-15.293).
Parking Spaces and Unenclosed Areas
A covered, enclosed parking space forming part of a building — where the space is sufficient to store goods, not merely to park vehicles — can qualify as a local within the meaning of Article L 145-1 (Cass. 3e Civ. 22-3-2006 n° 05-12.106). An open parking area demarcated only by painted lines on the ground, with no independent access and no construction, does not qualify (Cass. 3e Civ. 18-3-1992 n° 502). An undefined, non-delimited parking area outside the building housing the tenant's business, used solely for vehicle parking, equally fails the test (Cass. 3e Civ. 1-7-2014 n° 13-17.789).
Shopping Centre Stands: The Three-Condition Test
For a stand or concession within a commercial complex to attract the statute, three conditions must be cumulatively met: part of the tenant's clientele must be its own (not simply the clientele of the surrounding complex); the tenant must have a defined local that is not subject to unilateral modification by the landlord; and the tenant must not be subject to constraints incompatible with the free exercise of its commercial activity.
A jewellery stand in a shopping centre gallery, occupying the same fixed emplacement for fifteen years against a monthly rent of €1,500, with a defined footprint not subject to change at the landlord's discretion, has been held to qualify (CA Versailles 10-4-1996 n° 95-1233). Conversely, an emplacement delimited on the floor of a shopping gallery by lightweight partitions at head height — which the landlord could freely modify or relocate — failed the test (Cass. 3e Civ. 5-7-1995 n° 1533).
For any operator considering a stand, concession or defined emplacement within a French shopping centre or department store, the fundamental question to ask before signing is: does the contract give the landlord the right to relocate or alter the emplacement? If it does, the premises condition is almost certainly not met and the statutory regime will not apply. If the emplacement is fixed, defined, and non-modifiable without the tenant's consent, the premises condition may be met — but the other two conditions (own clientele and absence of incompatible constraints) must also be assessed.
Multiple Principal Premises
Where a fonds de commerce is operated across several separate premises, each qualifies independently for statutory protection if it meets the general conditions of Article L 145-1. Where the several premises are indissociable — meaning the operation of the business depends on them functioning as a unit — it is sufficient for one of them to satisfy the statutory conditions for all of them to attract the statute (Cass. 3e Civ. 22-1-1997 n° 80). The relative commercial importance of the activity carried on in each location is irrelevant to this assessment (Cass. 3e Civ. 22-10-1974 n° 73-12.372).
A sales boutique and a reserve store facing each other across the street, between which clients passed freely to examine and purchase goods, have been treated as a single commercial operation across two principal premises — with the reserve store qualifying independently for renewal (Cass. 3e Civ. 25-10-1972 n° 71-11.575).
Mixed-Use Premises: Commercial and Residential Under One Roof
A single lease covering both commercial premises and a residential dwelling is, in principle, indivisible and commercial for the whole (Cass. com. 5-5-1966 n° 64-11.427 ; Cass. 3e Civ. 5-2-1971 n° 69-12.416). This rule applies regardless of the relative importance of the commercial and residential uses. The commercial character governs the whole (Cass. 3e Civ. 1-10-1997 n° 1361).
The mixed-use rule requires, however, that the commercial use was known to and authorised by the landlord. Where a tenant uses a purely residential lease for commercial purposes without the landlord's knowledge, the lease remains residential (CA Versailles 8-10-1998 n° 96-5399). Similarly, a landlord's authorisation to use one room of a residential lease for professional purposes under Article L 631-7 CCH does not change the juridical nature of the lease or submit it to the commercial lease statute (Cass. 3e Civ. 9-12-2009 n° 08-18.038).
When a lease is concluded over premises that are under construction or not yet built, the parties may choose to submit to the commercial lease statute from the outset by concluding a bail en l'état futur d'achèvement (BEFA), which takes immediate contractual effect with the statute applying from the date of practical completion. Rights of withdrawal or renunciation exercised before practical completion are governed by ordinary contract law, not by the mandatory provisions of the commercial lease statute, even if the parties have already committed to a future commercial lease (Cass. 3e Civ. 8-1-1997 n° 9). After completion, the statute applies in full if the general conditions of Art. L 145-1 are satisfied.
Whether you are acquiring a retail asset, structuring a concession agreement for a shopping centre stand, or advising a business on the scope of its statutory protection, the premises condition is the essential starting point. Our guides and legal contacts provide the tools to navigate the French commercial lease framework with precision.
Speak with a French LawyerThis article is for general information and educational purposes only. It does not constitute legal advice. The legal analysis reflects the provisions of the Code de commerce and the case law cited. French commercial lease law is a complex and evolving area. Always seek qualified legal advice for your specific situation before making any decision with legal consequences.
Key Legal References
Core statutory provision: the commercial lease statute applies to leases of buildings or premises in which a commercial, industrial or artisanal business is operated.
Immovables by nature under civil law: land and buildings.
Stable emplacement: the statute can apply to an emplacement that is stable, permanent, well-defined, and forms part of a larger commercial ensemble, even without enclosure and covering.
Emplacement must be well-defined and not subject to unilateral modification by the landlord: newsstand kiosk in a building entrance hall with fixed closing equipment and storage qualified.
Landlord-modifiable emplacement excluded from statute: any emplacement that the landlord can modify, relocate or restrict at will cannot be a local for commercial lease purposes.
Baraquement qualifies as a local if it was the object of the lease and by common agreement of the parties intended for the operation of a fonds de commerce.
Advertising walls excluded from the commercial lease statute regardless of their commercial importance.
Mobile, prefabricated or easily demountable structures excluded from the statute.
Covered parking space forming part of a building, sufficient to store goods, may qualify as a local within Art. L 145-1.
Open parking area demarcated only by painted lines on the ground, with no construction, does not qualify as a local.
Stand delimited by lightweight partitions at head height which the landlord could freely modify or relocate excluded from the statute.
Multiple indissociable premises: where the operation of the business depends on them functioning as a unit, it is sufficient for one to satisfy the statutory conditions for all to attract the statute.
Mixed-use lease: a single lease covering both commercial and residential space is commercial for the whole, provided the commercial use was known to and authorised by the landlord.
Authorisation to use one room of a residential lease for professional purposes under CCH Art. L 631-7 does not submit the lease to the commercial lease statute.
BEFA: pre-completion withdrawal rights are governed by ordinary contract law, not by the mandatory provisions of the commercial lease statute.
