What Counts as a Sublease Under French Commercial Lease Law

A sublease is not defined in French statute. It has two essential elements: a transfer of the right to occupy the premises from the tenant to a third party, and a consideration paid by that third party. The consideration need not be a fixed monetary rent — courts have accepted that any benefit the tenant derives from the third party's occupation can constitute the requisite consideration, including even the mere benefit of having the premises remain open and operating during the tenant's absence. The concept of consideration is interpreted broadly.

The consequence of this broad definition is that the landlord can potentially characterise many arrangements as subleases: a profit-sharing arrangement with a manager, a distribution or concession agreement that includes use of premises, a collaboration agreement that allows a third-party professional to use the space. Courts will look at the substance of the arrangement — particularly whether there is a transfer of occupation and a genuine counterpart — rather than the label the parties use. A party who believes it has set up a commercial collaboration rather than a sublease, but who has transferred practical occupation and receives a counterpart linked to the third party's use, may find a court disagrees.

The burden of proving that an arrangement constitutes a sublease falls on the person alleging it — in practice, usually the landlord seeking to rely on the subletting prohibition. The landlord must demonstrate that the third party was actually occupying the premises and that some form of consideration was flowing to the tenant from that occupation.

The Statutory Prohibition on Subletting a French Commercial Lease

Article L 145-31, alinéa 1 of the Code de commerce states the rule plainly: unless the lease provides otherwise or the landlord agrees, all subletting, whether total or partial, is prohibited. This reversal of the Civil Code default — which allows subletting in the absence of a contrary clause (C. civ. Art. 1717) — reflects the specific commercial rationale of the commercial lease statute: the landlord has a direct interest in who occupies its premises and in the conditions under which the commercial activity is carried out. Unlike a civil lease, the commercial lease statute gives the landlord a right to be informed of and to participate in any subletting.

The prohibition applies regardless of the duration of the sublease. Even short-term subleases not subject to the commercial lease statute in their own right must comply with the Article L 145-31 formalities: the statutory regime for the main lease applies to all subletting of premises covered by that regime, whatever the duration of the sub-arrangement (Cass. 3e Civ. 11-7-1990; 1-3-1995; 6-10-2016).

Two Cumulative Conditions for a Valid Sublease of a French Commercial Lease

For a sublease to be regular, two cumulative conditions must be satisfied: the landlord must have authorised the sublease, and the landlord must have been called to participate in the sublease deed. Both conditions are mandatory. Satisfying one without the other leaves the sublease irregular.

Condition 1: Authorisation
  • Can be given in the main lease (general or specific clause) or by separate subsequent agreement
  • No prescribed form: written, oral, or tacit authorisation is possible
  • Authorisation given for a named sub-tenant requires fresh authorisation for any different sub-tenant
  • Authorisation for a limited period requires renewal if the sublease continues beyond that period
  • General authorisation in the lease still requires the participation formality at each sublease
Condition 2: Participation in the Deed
  • The landlord must be called to participate in the sublease deed by acte extrajudiciaire or registered letter
  • The landlord has 15 days from notification to indicate whether it intends to participate
  • If the landlord fails to respond or declines, the sublease may proceed without the landlord's presence
  • Required for each fresh sublease and for each renewal that constitutes a new contract (not a simple extension)
  • Cannot be waived by a general authorisation clause; any waiver must be clear and express

The participation formality serves a specific purpose beyond informing the landlord of the sublease's existence: it enables the landlord to review the conditions of the sublease — duration, rent, intended use — and, where the sublease rent exceeds the main lease rent, to exercise its right to demand a corresponding increase in the main lease rent.

Disguised Subleases: How French Courts Look Past the Label

Because the sublease prohibition and its formalities trigger only where the occupation arrangement constitutes a true sublease, parties who wish to allow third-party use of premises without triggering the regime have various contractual alternatives: management contracts (contrats de gérance), concession arrangements, co-working or desk-sharing arrangements that fall short of exclusive possession, and service agreements that include access to workspace. Courts analyse these arrangements by substance, not label. An arrangement described as a "service agreement" that in reality gives the third party exclusive use of the premises in exchange for a periodic payment is likely to be requalified as a sublease by any court applying the broad definition.

One recognised exception has been accepted by the Cour de cassation: where the business of the tenant is the provision of accommodation and ancillary services to customers — as in a hotel-residence or serviced apartment operation — each individual occupancy arrangement does not require the landlord to be called to participate, because the subletting is the very object of the activity authorised by the landlord. The initial grant of the lease in these circumstances constitutes the landlord's global authorisation of all the individual sub-arrangements that the operation necessarily involves (Cass. 3e Civ. 15-4-2015 n° 14-15.976).

⚠️
The Convention Trap

Parties regularly attempt to structure what is in substance a sublease as a collaboration agreement, distribution arrangement, or management contract in order to avoid the Article L 145-31 formalities. Courts are not bound by the parties' chosen qualification and will look at the economic reality. The key indicators of a sublease are: exclusive or significant occupation of a defined physical space, a recurring financial counterpart that bears a relationship to the space occupied, and the absence of a genuine service or business relationship beyond the occupation itself. Any arrangement where a third party effectively occupies commercial premises in exchange for a periodic payment should be treated as a potential sublease for the purposes of compliance, regardless of how it is labelled.

The Essentials of Subletting Under French Commercial Lease Law
Default rule reversed: the Civil Code allows subletting unless the lease prohibits it (C. civ. Art. 1717); the commercial lease statute reverses this: subletting is prohibited unless the lease authorises it or the landlord subsequently agrees (C. com. Art. L 145-31 al. 1).
Definition of sublease: two elements required — transfer of occupation and a counterpart paid by the occupier; consideration is interpreted broadly: any benefit to the tenant from the third party's occupation can suffice (Cass. 3e Civ. 5-7-1995 n° 93-10.924; 19-5-1999 n° 97-18.057; 26-2-1992 n° 90-19.710).
Two cumulative conditions (C. com. Art. L 145-31 al. 2 and 4): (1) landlord authorisation (in the lease or by subsequent agreement; written, oral, or tacit; specific to named sub-tenant); and (2) landlord participation in the sublease deed (called by acte extrajudiciaire or registered letter; 15-day response period; silence or refusal allows sublease to proceed without landlord's presence). Both conditions are mandatory; satisfying one without the other leaves the sublease irregular.
Scope of formalities: the participation formality must be fulfilled for each new sublease and each renewal constituting a new contract; a simple extension does not require fresh participation. The formalities apply to all subleases regardless of duration, including short-term subleases exempt from the commercial lease statute in their own right (Cass. 3e Civ. 11-7-1990; 1-3-1995; 6-10-2016).
Purpose of the participation formality: enables the landlord to review the conditions of the sublease (duration, rent, intended use) and, where the sublease rent exceeds the main lease rent, to exercise its right to demand a corresponding increase in the main lease rent.
Substance over label: courts requalify arrangements by substance, not by the label chosen by the parties. A "collaboration agreement" that in reality transfers exclusive occupation in exchange for periodic payment will be treated as a sublease. Key indicators: exclusive or significant occupation of a defined physical space, recurring counterpart related to the space occupied, absence of genuine service or business relationship beyond occupation.
Hotel-residence exception (Cass. 3e Civ. 15-4-2015 n° 14-15.976): where subletting is the very object of the authorised activity (hotel-residence, serviced apartments), the individual sub-arrangements do not each require landlord participation; the initial lease grant constitutes global authorisation for all individual occupancy arrangements that the operation necessarily involves.
Note on order public: the Art. L 145-31 formalities are not provisions of ordre public (C. com. Art. L 145-15); the parties may contractually waive them, but any waiver must be clear and express. A general authorisation clause does not by itself waive the participation formality.
Subletting a French Commercial Lease or Reviewing a Sharing Arrangement?

The line between a permitted collaboration arrangement and a prohibited sublease turns on facts that courts examine closely. Our guides and legal contacts are here to help you assess and structure the arrangement correctly.

Book a Consultation

This article is for general information and educational purposes only. It does not constitute legal advice. The legal framework described reflects French law as at 2025. Always seek qualified legal advice before any subletting arrangement.